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Fundamentals of Organizational Structure - PowerPoint PPT Presentation
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Fundamentals of Organizational Structure. Organization Structure. Three Components Formal reporting relationships Grouping of people and departments Design of systems to ensure effective communication, coordination, and integration. Linkages. Vertical Control Centralized decision-making
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Presentation Transcript
Organization Structure
- Three Components
- Formal reporting relationships
- Grouping of people and departments
- Design of systems to ensure effective communication, coordination, and integration
Linkages
- Vertical
- Control
- Centralized decision-making
- How achieved:
- Hierarchical referral
- Rules and plans
- Vertical Information Systems
Linkages
- Horizontal
- Learning
- Decentralized decision-making
- How achieved:
- Information systems
- Direct contact
- Task forces
- Integrator
- Teams
Organizational Structure
- Required Work Activities
- Reporting Relationships
- Departmental Grouping Options
- Functional
- Divisional
- Multifocused
- Horizontal
- Modular
Divisional Structure
- AKA Product Structure
- Decentralized decision-making
- Strengths
- Weaknesses
Geographical Structure
- Designed according to where product will be offered
Matrix Structure
- Combines functional and divisional structure
- Conditions
- Need to share scarce resources
- Two critical outputs:
- In-depth knowledge and new products
- Complex and uncertain domain
- Who’s in charge?
- Strengths
- Weaknesses
Horizontal Structure
- Reengineering
- Faster and better service for customers
- Organized around processes and teams
- Strengths
- Weaknesses
Modular Structure
- Subcontracts processes
- Manages them from a central hub
- Business focuses only on core competency
- Strengths
- Weaknesses
Hybrid Structure
- Centralized functional structure for stable products; other products may have self-contained departments
- Certain departments work through entire organization (functional), but processes are focused in other areas (horizontal).
Applications
- Have scarce resources and need efficiency?
- Need inter-functional coordination, innovation, and learning?
What Causes Problems?
- Decision-making is delayed
- Non-responsiveness to environmental changes
- Too much conflict/ “Turf wars”
