Derived fromDerived from

The term The term “Organisation“Organisation” is derived from the word ” is derived from the word

““Organism”, Organism”, means means

A structure of body divided into parts that A structure of body divided into parts that are held together by a fabric of are held together by a fabric of relationship as one organic wholerelationship as one organic whole..

Organisation suggests the structure within which Organisation suggests the structure within which people associate for the attainment of an objective.people associate for the attainment of an objective.

In an enterprise, many managers and In an enterprise, many managers and employees work together for achieving employees work together for achieving common objectives.common objectives.

It is the organisation structure which binds It is the organisation structure which binds them together and brings proper adjustment them together and brings proper adjustment and coordination in their work.and coordination in their work.

The division of work and authority; and the The division of work and authority; and the establishment of relationship among establishment of relationship among individuals or groups are possible due to the individuals or groups are possible due to the organisation structure.organisation structure.

Organisation Organisation InvolvesInvolves Identifying the activities required to achieveIdentifying the activities required to achieve organisational organisational

objectives.objectives. Grouping up of these activities into Grouping up of these activities into workable units workable units

(Departmentation)(Departmentation) Assigning duties and responsibilities to subordinates Assigning duties and responsibilities to subordinates

in order to achieve the tasks assigned.in order to achieve the tasks assigned. Delegating authority Delegating authority if necessaryif necessary Establishing superior–subordinate relationship. Establishing superior–subordinate relationship. Providing a system of co-ordination for integrating Providing a system of co-ordination for integrating

the activities of individuals and departments.the activities of individuals and departments.

Organization: DefinitionOrganization: Definition

According to Louis A. Allen,According to Louis A. Allen, Organisation Organisation is is "the process of identification and grouping "the process of identification and grouping

the work to be performed, defining and the work to be performed, defining and delegating responsibility and authority and delegating responsibility and authority and establishing relationships for the purpose of establishing relationships for the purpose of

enabling people to work most effectively enabling people to work most effectively together in accomplishing objectives"together in accomplishing objectives"..

James Mooney definesJames Mooney defines organisation as  organisation as "the "the form of every human association for form of every human association for attainment of a common purpose"attainment of a common purpose"..

employees' responsibilitiesemployees' responsibilities

In an organization of any size or complexity, In an organization of any size or complexity, employees' responsibilitiesemployees' responsibilities are defined by are defined by what they do and who they report to what they do and who they report to

and and for managers, who reports to them. for managers, who reports to them.

Over time these definitions are Over time these definitions are assignedassigned to to positionspositions in the organizationin the organization rather than to specific rather than to specific individuals. individuals.

Organisation structure refers to the network of relationships among individuals and

positions in an Organisation

Organizational structure refers to Organizational structure refers to the way that an organization the way that an organization arranges people and jobs so that arranges people and jobs so that its work can be performed and its its work can be performed and its goals can be met.goals can be met.

Organization Structure Suggests Its Organization Structure Suggests Its FrameworkFramework . .

Organisation structure is Organisation structure is defineddefined as as ""The logical arrangement of The logical arrangement of task and the network of task and the network of relationships and roles among the relationships and roles among the various positions established to various positions established to carry out the activities necessary carry out the activities necessary to achieve the predetermined to achieve the predetermined objectives of business"objectives of business"..

Internal Organisation structureInternal Organisation structure

constitutes the arteries and veins constitutes the arteries and veins through which the blood of work through which the blood of work flows in the body of Organisation.flows in the body of Organisation.

FACTORSFACTORS

The best organizational structure for any The best organizational structure for any organization depends on many factors organization depends on many factors including including

the work it doesthe work it does its size in terms of employeesits size in terms of employees revenue, and revenue, and the geographic dispersion of its facilitiesthe geographic dispersion of its facilities the range of its businesses (the degree to the range of its businesses (the degree to

which it is diversified across markets).which it is diversified across markets).

WHYWHY When a work group is very small and face-to-When a work group is very small and face-to-

face communication is frequent, face communication is frequent, formal formal structurestructure may be unnecessary, may be unnecessary,

BUTBUT In a larger organization decisions have to be In a larger organization decisions have to be

made about the delegation of various tasks. made about the delegation of various tasks.

Thus, Thus, procedures are established procedures are established that assign that assign responsibilities for various functions. It is these responsibilities for various functions. It is these decisions that determine the organizational decisions that determine the organizational structure.structure.

ImportanceImportance

1. 1. Ensures optimum utilisation of human Ensures optimum utilisation of human resourcesresources..

Every enterprise appoints employees for the Every enterprise appoints employees for the conduct of various business activities and conduct of various business activities and operations. They are operations. They are given the work according given the work according to their qualifications and experienceto their qualifications and experience. . Organisation ensures that every individual is Organisation ensures that every individual is placed on the job for which he is placed on the job for which he is best suited.best suited.

2. 2. Facilitates Co-OrdinationFacilitates Co-Ordination Organisation involves division of work and departmentation. Organisation involves division of work and departmentation.

This naturally suggests the need of proper coordination This naturally suggests the need of proper coordination among the departments and efforts of people working in an among the departments and efforts of people working in an Organisation. Due to coordination one clear-cut direction is Organisation. Due to coordination one clear-cut direction is given to people/ departments and efforts will not be wasted given to people/ departments and efforts will not be wasted or misdirected. Coordination also brings integration in the or misdirected. Coordination also brings integration in the basic functions of management. The principle of basic functions of management. The principle of coordination is important as it facilitates achievement of coordination is important as it facilitates achievement of overall objectives of a business Organisation. It also brings overall objectives of a business Organisation. It also brings unity of action in the Organisation. Coordination will not be unity of action in the Organisation. Coordination will not be available automatically. For this, working relationships need available automatically. For this, working relationships need to be established within the Organisation.to be established within the Organisation.

It acts as a means of bringing co-ordination and integration It acts as a means of bringing co-ordination and integration

among the activities of individuals and departments of the among the activities of individuals and departments of the enterprise. It establish a clear-cut relationships between enterprise. It establish a clear-cut relationships between operating departments and bring proper balance in their operating departments and bring proper balance in their activities. activities.

3. 3. Division of Work and Specialization:Division of Work and Specialization:     Division of work leads to specialization. Every Division of work leads to specialization. Every

department of an Organisation should be given department of an Organisation should be given specialized functions. This will raise the overall specialized functions. This will raise the overall efficiency and quality of work of an Organisation. efficiency and quality of work of an Organisation. At the same time, specialization and At the same time, specialization and departmentation should not have any adverse effect departmentation should not have any adverse effect on the total integrated system.on the total integrated system.

Coordination must be established among the Coordination must be established among the departments and activities. Specialization is departments and activities. Specialization is necessary for raising the efficiency of the whole necessary for raising the efficiency of the whole Organisation structure. The functions given to each Organisation structure. The functions given to each department should be preferably only of one department should be preferably only of one category. Employees should be assigned duties to category. Employees should be assigned duties to different departments as per their qualifications, different departments as per their qualifications, qualities and so on.qualities and so on.

4. 4. Ensures growth, expansion and diversificationEnsures growth, expansion and diversification

    Sound Organisation structure facilitates Sound Organisation structure facilitates expansion/diversification of an enterprise. expansion/diversification of an enterprise. Organisation structure has Organisation structure has in-built capacity to absorb in-built capacity to absorb additional activities and also effective control on additional activities and also effective control on themthem. A business enterprise brings diversification in . A business enterprise brings diversification in its activities within the framework of its Organisation its activities within the framework of its Organisation

5. 5. Stimulates creativityStimulates creativity: : 

Organisation provides training and self-development Organisation provides training and self-development facilities to managers and subordinates through facilities to managers and subordinates through delegation and departmentation. It also encourages delegation and departmentation. It also encourages initiative and creative thinking on the part of initiative and creative thinking on the part of managers and others managers and others

6. 6. Facilitates administration:Facilitates administration:  

Effective administration of business will not be Effective administration of business will not be possible without the possible without the support of sound organisation support of sound organisation structurestructure. .

Delegation, departmentation and decentralisationDelegation, departmentation and decentralisation are are the the toolstools for for effective administration.effective administration.

7. 7. Determines optimum use of technology:Determines optimum use of technology:  

Sound Organisation structure provides opportunities Sound Organisation structure provides opportunities to make optimum use of technology. It facilitates to make optimum use of technology. It facilitates proper maintenance of equipment and also meets high proper maintenance of equipment and also meets high cost of installation. cost of installation.

8. 8. Determines individual responsibility:Determines individual responsibility:

Responsibility is an obligation to perform Responsibility is an obligation to perform an assigned work. In a sound Organisation, an assigned work. In a sound Organisation, the manager finds it easy to pinpoint the manager finds it easy to pinpoint individual responsibility when the work is individual responsibility when the work is spoilt/spoiledspoilt/spoiled..

..

9. 9. Delegation of Authority: Delegation of Authority:

Delegation should go to the lower levels of Delegation should go to the lower levels of management. Every one should be given authority management. Every one should be given authority which is adequate to accomplish the task assigned to which is adequate to accomplish the task assigned to him. Delegation is useful for getting the things done him. Delegation is useful for getting the things done through others. A successful manager normally does through others. A successful manager normally does not perform the jobs by himself. He delegates the not perform the jobs by himself. He delegates the authority and responsibility to his subordinates. He authority and responsibility to his subordinates. He also motivates his subordinates and see that they take also motivates his subordinates and see that they take initiative, work efficiently and contribute for initiative, work efficiently and contribute for achieving organizational objectives.achieving organizational objectives.

10. 10. Efficient administration, direction Efficient administration, direction and and control.control.

11.11. It avoids wastage of raw materials It avoids wastage of raw materials and and human efforts.human efforts.

12. 12. Efficient conduct of business Efficient conduct of business activitiesactivities

WHY WHY – Different Types Of Organisation Structure – Different Types Of Organisation Structure Needed ?Needed ?

“ “Necessity Is The Mother Of Invention”Necessity Is The Mother Of Invention” The diverse and complex nature of the current The diverse and complex nature of the current

business environment has led to the business environment has led to the emergence of several types of organizational emergence of several types of organizational structuresstructures. .

Organizational designs are believed to be Organizational designs are believed to be better adapted to the needs of the emerging better adapted to the needs of the emerging business environment. business environment.

Each structure has unique qualities to help Each structure has unique qualities to help businesses handle their particular businesses handle their particular environment. environment.

Classification of Internal Classification of Internal Organisation structures/ Organisation structures/

Types Of Organisation StructureTypes Of Organisation Structure

Internal Organisation structures can be broadly Internal Organisation structures can be broadly classifiedclassified into the following types/forms: into the following types/forms:

1. Line Organisation structure.1. Line Organisation structure.2. Functional Organisation structure.2. Functional Organisation structure.3. Line and staff Organisation structure.3. Line and staff Organisation structure.4. Product Organisation structure.4. Product Organisation structure.5. Committee and 5. Committee and Matrix Organisation

structure.structure.

Line / Line / Military/ScalarMilitary/Scalar Organisation Organisation StructureStructure

Line Organisation (also called Line Organisation (also called Military/Scalar Organisation) is the Military/Scalar Organisation) is the oldestoldest and the and the simplest simplest form of form of internal Organisation structure. internal Organisation structure.

In the In the line Organisationline Organisation,,

The line of authority moves directly from the The line of authority moves directly from the top level to the top level to the lowest level in a step-by-step mannerlowest level in a step-by-step manner. It is . It is straight and straight and vertical.vertical.

The top-level management takes all major decisions and The top-level management takes all major decisions and issues directions for actual execution. issues directions for actual execution.

For exampleFor example, The general manager issues order to various , The general manager issues order to various departmental managers. Thereafter, the departmental departmental managers. Thereafter, the departmental manager issues instructions to works manager. The works manager issues instructions to works manager. The works manager will issue instructions to foreman. In this manner, manager will issue instructions to foreman. In this manner, the orders and instructions will be issued to the workers the orders and instructions will be issued to the workers working at the lowest level. working at the lowest level.

Thus, Thus, authority moves downwardauthority moves downward and also step-by-step. The and also step-by-step. The responsibilityresponsibility, on the other hand, , on the other hand, moves in the upwardmoves in the upward direction.direction.

Advantages of Line Organisation Advantages of Line Organisation StructureStructure

Simplicity:Simplicity: Line Organisation structure is easy to  Line Organisation structure is easy to understand and follow by superiors and understand and follow by superiors and subordinates. It is simple and clear as regards subordinates. It is simple and clear as regards authority and accountability.authority and accountability.

Prompt decisionsPrompt decisions: Line Organisation facilitates : Line Organisation facilitates prompt decision-making at all levels as the prompt decision-making at all levels as the authority given is clear and complete.authority given is clear and complete.

Discipline:Discipline: It brings discipline in the Organisation  It brings discipline in the Organisation due to due to unity of commandunity of command, , delegation of authoritydelegation of authority and and direct accountability.direct accountability.

EconomicalEconomical:: Line Organisation is  Line Organisation is economical as experts are not appointed.economical as experts are not appointed.

Attraction to talented personsAttraction to talented persons: Line : Line Organisation brings out talented workers and Organisation brings out talented workers and develops in them quality of leadership. It develops in them quality of leadership. It offers opportunities of self-development to offers opportunities of self-development to employees.employees.

Quick communication, high efficiency, Quick communication, high efficiency, flexibility and high employee moraleflexibility and high employee morale are  are some more advantages of line Organisation some more advantages of line Organisation structure.structure.

Limitations/Disadvantage of Line Limitations/Disadvantage of Line Organisation StructureOrganisation Structure

Heavy burden on line executives:Heavy burden on line executives: The line  The line executives are given too many duties and executives are given too many duties and responsibilities. Even the quality of the decisions of responsibilities. Even the quality of the decisions of executives may suffer due to heavy burden of duties executives may suffer due to heavy burden of duties and responsibilities. and responsibilities.

Non-availability of services of expertsNon-availability of services of experts: There is : There is absence of skilled experts in line organisation. Expert absence of skilled experts in line organisation. Expert assistance is not available promptly when needed by assistance is not available promptly when needed by line executives.line executives.

3. Favoritism & Nepotism3. Favoritism & Nepotism

Forms of nepotism :Forms of nepotism : Relative Nepotism; Friend Nepotism ; a real morale killer Relative Nepotism; Friend Nepotism ; a real morale killer

because it is so blatantly unfair to the "not-so-good because it is so blatantly unfair to the "not-so-good friends" of the boss.friends" of the boss.

FavoritismFavoritism

Preferential treatment - Preferential treatment - when someone appears to when someone appears to be treated better than others be treated better than others not necessarily due to not necessarily due to superior work superior work performance;discriminationperformance;discrimination; reduces morale, violates ; reduces morale, violates corporate culture; increases corporate culture; increases employee turnover, and employee turnover, and slows down career slows down career advancement (self-advancement (self-development); demotivates development); demotivates workforce;  upset co-workforce;  upset co-workers ; unfair workers ; unfair

NepotismNepotism Showing of favoritism Showing of favoritism

toward toward relatives and relatives and friends, friends, based upon that based upon that relationshiprelationship, rather than on , rather than on an objective evaluation of an objective evaluation of ability, ability, meritocracy or  or suitability. (giving much suitability. (giving much higher standard than the higher standard than the rest of the team)rest of the team)

Loss of productivity; a real Loss of productivity; a real morale killer morale killer

Disruption of the workforce Disruption of the workforce Risk of lawsuitsRisk of lawsuits

Forms of nepotismForms of nepotism

Connection Nepotism Connection Nepotism Relative Nepotism Relative Nepotism Friend Nepotism Friend Nepotism Referral Nepotism  Referral Nepotism  Contribution Nepotism etcContribution Nepotism etc

Leadership of departmental executive is autocratic Leadership of departmental executive is autocratic ((self assured i.e. bossy way of ordering othersself assured i.e. bossy way of ordering others) due ) due to heavy concentration of powers. He may favour to heavy concentration of powers. He may favour some employees at the cost of others.some employees at the cost of others.

Too much dependence on limited executives:Too much dependence on limited executives: In the  In the line organisation, all powers are concentrated in the line organisation, all powers are concentrated in the hands of a few executives. Naturally, the success hands of a few executives. Naturally, the success and stability of the entire organisation depends on and stability of the entire organisation depends on their personal skill, initiative and interest. Special their personal skill, initiative and interest. Special difficulties arise when one executive is to be difficulties arise when one executive is to be transferred/replaced/promoted.transferred/replaced/promoted.

RigidityRigidity: There is rigidity (: There is rigidity (stiff / resisting flexibilitystiff / resisting flexibility) ) in the working of line organisation. in the working of line organisation.

limited freedom to employeeslimited freedom to employees

II.II. Functional Organisation StructureFunctional Organisation Structure

Functional Organisation suggested by  Functional Organisation suggested by 

F. W. Taylor F. W. Taylor says that “the job of management is says that “the job of management is divided according to specialization.” divided according to specialization.”

As a result, functional departments are created.As a result, functional departments are created. Employees within the functional structure are Employees within the functional structure are

differentiated to perform a specialized set of tasksdifferentiated to perform a specialized set of tasks. . For instance, the For instance, the marketing departmentmarketing department would be would be staffed only with staffed only with marketers responsible for the marketers responsible for the marketingmarketing of the company's products. of the company's products.

Functional departmentalisation

Advantages• Efficiencies from putting together similar specialties and peoplewith common skills, knowledge, and orientations• Coordination within functional area• In-depth specialization• Disadvantages• Poor communication across functional areas• Limited view of organisational goals

Geographical Departmentalisation

Functional Organisation Structure Functional Organisation Structure Includes Includes

The functional structure of the organisation The functional structure of the organisation should should includeinclude the the names of all key managers and staffnames of all key managers and staff. .

This information is needed to This information is needed to identify responsibilities identify responsibilities and dependenciesand dependencies which will be useful in the early which will be useful in the early stages of the emergency. An example of a functional stages of the emergency. An example of a functional organisation chart is as follows.organisation chart is as follows.

This specialization This specialization leads to operational efficienciesleads to operational efficiencies where employees become where employees become specialists within their own specialists within their own realm of expertiserealm of expertise. . 

In the In the functional foremanshipfunctional foremanship, there will , there will be be eight specialists/functional headseight specialists/functional heads

called bosses. Out of eight bosses, called bosses. Out of eight bosses, fourfour bosses will be at the bosses will be at the planning levelplanning level and and the remaining four will be at the the remaining four will be at the shop shop

floor level.floor level.

Foremen At Planning Level (Planning Dept.)Foremen At Planning Level (Planning Dept.)

Time and Cost ClerkTime and Cost Clerk: He is concerned with : He is concerned with preparing standard time preparing standard time for the completion of certain piece of workfor the completion of certain piece of work and and compiling the cost of compiling the cost of that work.that work.

Instruction Card ClerkInstruction Card Clerk: He lays down the exact method of doing the : He lays down the exact method of doing the work. He specifies the tools to be used for conducting the production work. He specifies the tools to be used for conducting the production and also gives other instructions on the instruction cards prepared by and also gives other instructions on the instruction cards prepared by him.him.

Route ClerkRoute Clerk: The route clerk lays down the exact route through : The route clerk lays down the exact route through which each and every piece of work should move through various which each and every piece of work should move through various stages till completion. He decides the production schedule and the stages till completion. He decides the production schedule and the sequence of steps by which the production process is to move.sequence of steps by which the production process is to move.

Shop DisciplinarianShop Disciplinarian: He is concerned with the discipline, : He is concerned with the discipline, insubordination, violation of rules of discipline and absenteeism. All insubordination, violation of rules of discipline and absenteeism. All cases relating to these matters will be managed by the shop cases relating to these matters will be managed by the shop disciplinarian.disciplinarian.

2. Foremen At Shop Floor Level2. Foremen At Shop Floor Level

Gang BossGang Boss: He assembles and : He assembles and sets up various machinessets up various machines; ; and tools for a particular piece of work. He is in-charge of and tools for a particular piece of work. He is in-charge of assembling line of production.assembling line of production.

Speed BossSpeed Boss: He is concerned with the : He is concerned with the speeding of machinesspeeding of machines used for production. He keeps proper speed of the machines used for production. He keeps proper speed of the machines and see that workers complete the production work as per and see that workers complete the production work as per the schedule time.the schedule time.

Repair BossRepair Boss: The repair boss looks after the : The repair boss looks after the proper proper maintenancemaintenance of machines, tools and equipments required of machines, tools and equipments required during the production process.during the production process.

InspectorInspector:: The inspector controls  The inspector controls quality of the productsquality of the products by by keeping adequate check/control when the production work keeping adequate check/control when the production work is in progress.is in progress.

The functional Organisation structure is given in the above The functional Organisation structure is given in the above chartchart

Functional organizational structures Functional organizational structures are are best suited for companies best suited for companies

producing producing standardized goods standardized goods and services at large and services at large volumes and low costvolumes and low cost.. Therefore, functional structures are Therefore, functional structures are most effective for companiesmost effective for companies. .

Functional structure works best Functional structure works best when the when the surrounding surrounding environment is stableenvironment is stable, and when , and when customers expect a customers expect a standardized range of standardized range of productsproducts not subject to continuous changenot subject to continuous change..

If the environment becomes If the environment becomes more complex more complex and uncertain,and uncertain, the functional structure the functional structure may not may not be the best suited structure for the companybe the best suited structure for the company, , and the company may need to change their and the company may need to change their structure to be able to cope with new structure to be able to cope with new challenges and uncertainties. challenges and uncertainties.

Advantages of Functional Advantages of Functional Organisation StructureOrganisation Structure

The major potential advantages include:The major potential advantages include: Economies of scale with efficient use of resourcesEconomies of scale with efficient use of resources Task assignments consistent with technical trainingTask assignments consistent with technical training High quality technical problem solvingHigh quality technical problem solving In-depth training and skill development within In-depth training and skill development within

functions.functions. The human resource abilities are constantly nurtured The human resource abilities are constantly nurtured

by concentrated tutoring, leadership, and guidanceby concentrated tutoring, leadership, and guidance Clear cut career paths within functionsClear cut career paths within functions

Provides an easy path for the Provides an easy path for the employees to grow within the employees to grow within the organization organization sideways sideways as well as as well as upwardsupwards in the organizational tree in the organizational tree

Disadvantage Disadvantage of the Functional Structure is that of the Functional Structure is that employees tend to identify themselves with their employees tend to identify themselves with their respective departments respective departments but not so much with the but not so much with the organization as a whole.organization as a whole.

Poor communication and coordinationPoor communication and coordination across across functions (different departments)functions (different departments)

Failure to communicate and extend support across Failure to communicate and extend support across department lines.department lines.

One of the most One of the most serious disadvantages serious disadvantages occurs when members of functional occurs when members of functional departments become overspecialized, departments become overspecialized, developdevelop self-centered, narrow viewpoints, self-centered, narrow viewpoints, and lose the total system perspective.and lose the total system perspective.

Grouping based on functions results in a Grouping based on functions results in a lack of broader view lack of broader view from employees from employees resulting in resulting in narrowed vision narrowed vision of overall of overall organizational objectiveorganizational objective

What is an alternative structure then? What is an alternative structure then?

Organizational structures such as the Organizational structures such as the divisional structure and the  and the matrix structure could could be the solution for companies operating in more be the solution for companies operating in more uncertain and complex environments, and the uncertain and complex environments, and the solution for companies offering a broad range of solution for companies offering a broad range of products to different customer segments. products to different customer segments.

Divisional Organisation StructureDivisional Organisation Structure

Functional structures are useful for Functional structures are useful for relatively relatively big companies.big companies.

Employees within the functional structure are Employees within the functional structure are differentiated differentiated to perform a specialized set of to perform a specialized set of taskstasks. For instance, the . For instance, the marketing department marketing department would be staffed only with would be staffed only with marketers marketers responsible for the marketing of the company's responsible for the marketing of the company's products. products.

i.e.i.e. When a company expands to supply goods or services to When a company expands to supply goods or services to a variety of customersa variety of customers, offers a , offers a

variety of different productsvariety of different products or are engaged in business in or are engaged in business in several different marketsseveral different markets, the , the company could adopt a divisional organizational structure. company could adopt a divisional organizational structure.

The divisional structure is broken down into three areas: The divisional structure is broken down into three areas: product, market, and geographicproduct, market, and geographic. .

Product StructureProduct Structure Product structure groups employees together based upon specific products produced by the Product structure groups employees together based upon specific products produced by the

company. An example of this would be a company that produces three distinct products, company. An example of this would be a company that produces three distinct products, "product a", "product b", and "product c". This company would have a separate division for "product a", "product b", and "product c". This company would have a separate division for each product.each product.

Market StructureMarket Structure Market structure groups employees together based upon specific markets in which the Market structure groups employees together based upon specific markets in which the

company sells. company sells.

Geographic StructureGeographic Structure Geographic structure groups employees together based upon specific geographic location. Geographic structure groups employees together based upon specific geographic location.

The The benefitbenefit of this organizational structure is that companies are able to specialize its of this organizational structure is that companies are able to specialize its activities into activities into self-reliant divisions, each capable of satisfying customer demands and self-reliant divisions, each capable of satisfying customer demands and changes within the business environmentchanges within the business environment..

The The advantageadvantage of the Divisional Structure lies mainly of the Divisional Structure lies mainly in the in the coordination of functions coordination of functions within the separate within the separate divisions. Behind any single product group or market divisions. Behind any single product group or market group or geographic group is group or geographic group is one person who is in one person who is in charge of all the functions charge of all the functions within his division. This within his division. This improves the improves the ability of a company to respond to ability of a company to respond to customer issuescustomer issues, because there is more , because there is more accountabilityaccountability — everyone in a given division reports to a single — everyone in a given division reports to a single individual at the top of the division, rather than to a individual at the top of the division, rather than to a mere supervisor of a department. This arrangement mere supervisor of a department. This arrangement also also helps to develop managerial skills and executive helps to develop managerial skills and executive skills, skills, because people working in a Divisional because people working in a Divisional Structure are Structure are exposed to all of the other functionsexposed to all of the other functions, , unlike as in a straight Functional Structure. unlike as in a straight Functional Structure.

A solid example of Divisional Structure can be A solid example of Divisional Structure can be seen in the seen in the Boeing CompanyBoeing Company. Boeing has . Boeing has three three divisions within its organizationdivisions within its organization: the : the Commercial Airline divisionCommercial Airline division; the ; the Military Military Aircraft divisionAircraft division; and a fledgling new division ; and a fledgling new division or product group called or product group called Private AviationPrivate Aviation. Each . Each of these divisions is a functional organization of these divisions is a functional organization onto itself, each onto itself, each with its own R&D with its own R&D and and Production and Sales and Accounting teamsProduction and Sales and Accounting teams; ; yet, each is only a component of a much larger yet, each is only a component of a much larger organization called Boeing Company. organization called Boeing Company.

Matrix Structure:Matrix Structure:

Other types of organisational structure do not Other types of organisational structure do not emphasize a emphasize a hierarchy.hierarchy.

Hierarchical:Hierarchical:

This structure shows This structure shows people's position in the people's position in the business and the layers of responsibility business and the layers of responsibility that that are associated with that level. The are associated with that level. The Chain of Chain of CommandCommand shows who reports to whom shows who reports to whom within within the hierarchy.the hierarchy.

A hierarchical organisation chart in a typical school. The chart shows A hierarchical organisation chart in a typical school. The chart shows different levels of responsibility at each level.different levels of responsibility at each level.

Matrix StructureMatrix Structure

In a In a matrix structurematrix structure, each individual may have a , each individual may have a specific role or functionspecific role or function and may work within and may work within a functional area but the matrix structure is a functional area but the matrix structure is designed to show that designed to show that every person in the every person in the organisation has an importantorganisation has an important role role to play. It to play. It does not suggest that one person's role is any does not suggest that one person's role is any more important or valuable than another.more important or valuable than another.

This diagram shows how a matrix This diagram shows how a matrix structure might be represented. structure might be represented.

There are five people working on the There are five people working on the main part. Each person has a role to main part. Each person has a role to play and we all rely on each other to play and we all rely on each other to carry out those roles and to support carry out those roles and to support the others in helping them do their the others in helping them do their jobs effectively. jobs effectively.

MATRIX MATRIX

An example of a matrix structure An example of a matrix structure at a software development at a software development company. Business analysts, company. Business analysts, developers, and testers each developers, and testers each report to a functional report to a functional department manager and to a department manager and to a project manager simultaneously.project manager simultaneously.

Matrix Structures Matrix Structures incorporate elements of incorporate elements of both Functional and both Functional and Divisional structuresDivisional structures

Project-based matrix structureProject-based matrix structure

A Matrix structure organisation A Matrix structure organisation contains contains teams of people created from various teams of people created from various sections of the business. sections of the business.

These teams will be created for the These teams will be created for the purposes of a specific project and will be purposes of a specific project and will be led by a project manager. Often the team led by a project manager. Often the team will only exist for the duration of the will only exist for the duration of the project and matrix structures are usually project and matrix structures are usually deployed to develop new products and deployed to develop new products and servicesservices..

The manager of each project has The manager of each project has no staff at all. His job is to no staff at all. His job is to assemble his staff from the assemble his staff from the functional areas of the functional areas of the organization in order to see his organization in order to see his project through from conception to project through from conception to completion. The project manager, completion. The project manager, in other words, must borrow his in other words, must borrow his staffing from each department. staffing from each department.

ADVANTAGESADVANTAGES

Individuals can be chosen according to the Individuals can be chosen according to the needs of theproject.                              needs of theproject.                              

The use of a project team which is The use of a project team which is dynamic and able to view problems in a dynamic and able to view problems in a different way as specialists have been different way as specialists have been brought together in a new environment.brought together in a new environment.

Project managers are directly responsible Project managers are directly responsible for completing the project within a specific for completing the project within a specific deadline and budget.deadline and budget.

Disadvantages Disadvantages The disadvantages of a matrix The disadvantages of a matrix

organization arise from the organization arise from the dual reportingdual reporting structure. structure.

The organization's top management must The organization's top management must take particular care to establish proper take particular care to establish proper procedures for the development of procedures for the development of projects and to keep communication projects and to keep communication channels clear so that potential conflicts channels clear so that potential conflicts do not arise and hinder organizational do not arise and hinder organizational functioning.functioning.

If teams have a lot of independence, difficult If teams have a lot of independence, difficult to monitor.to monitor.

Global Matrix StructureGlobal Matrix Structure

M an ag em en t

fin an c in g

p arts

sp orts u tilit ies

lig h t tru cks

au tos

S tra teg ic B u s in ess u n its N . A m erica L a tin A m erica E u rop e A s ia

E xecu tive C om m ittee

C h a irm an o f th e B oard

Combined Functional and Divisional StructureCombined Functional and Divisional Structure

Chair and CEO Vice Chair and COO

Exec VP, Finance

Exec VP, Fresh Dairy

Exec VP, Water

Exec VP, Biscuits and

Cereal Snacks

Exec VP, Asia-Pacific

Exec VP, Intl Strategy

Line-and-Staff Organization Structure

In a line organization, top management has complete control, and the chain of command is clear and simple.

The line-and-staff organization combines the line organization with staff departments that support and advise line departments.

Most medium and large-sized firms exhibit line-and-staff organizational structures.

Difference?

The distinguishing characteristic between simple line organizations and line-and-staff organizations is the multiple layers of management within line-and-staff organizations.

Advantage & Disadvantage

An advantage of a line-and-staff organization is the availability of technical specialists. Staff experts in specific areas are incorporated into the formal chain of command.

A disadvantage of a line-and-staff organization is conflict between line and staff personnel

LINE-AND-STAFF POSITIONS LINE-POSITIONS A line position is directly

involved in the day-to-day operations of the organization, such as producing or selling a product or service.

Are occupied by line personnel and line managers.

Line personnel carry out the primary activities of a business and are considered essential to the basic functioning of the organization.

STAFF POSITIONS Staff positions serve the

organization by indirectly supporting line functions.

Staff positions consist of staff personnel and staff managers.

Staff personnel use their technical expertise to assist line personnel and aid top management in various business activities

Line managers make the majority of the decisions and direct line personnel to achieve company goals.

Ex. of a line manager is a marketing executive. Although a marketing executive does not actually produce the product or service, he or she directly contributes to the firm's overall objectives through market forecasting and generating product or service demand. Therefore, line positions, whether they are personnel or managers, engage in activities that are functionally and directly related to the principal workflow of an organization

Staff managers provide support, advice, and knowledge to other individuals in the chain of command.

An example of a staff manager is a legal adviser. He or she does not actively engage in profit-making activities, but does provide legal support to those who do. Therefore, staff positions, whether personnel or managers, engage in activities that are supportive to line personnel.

In an organisation, there are three types of authority.

Line Authority is given to line managers for achieving the objectives of the organisation.

Staff Authority is given to staff managers for giving advice and service to the line managers.

Functional Authority is given to a line or staff manager to do a specific job. When the job is completed, the authority is taken back.

LINE-AND-STAFF AUTHORITY

LINE AUTHORITY Line authority is the right to carry

out assignments and exact performance from other individuals.

Line authority flows down the chain of command.

line authority gives an individual a certain degree of power relating to the performance of an organizational task

STAFF AUTHORITY Staff authority is the right to

advise or counsel those with line

authority.

For example, line authority gives a production supervisor the right to direct an employee to operate a particular machine.

Therefore, line authority gives an individual a certain degree of power relating to the performance of an organizational task.

For example, human resource department employees help other departments by selecting and developing a qualified workforce.

A quality control manager aids a production manager by determining the acceptable quality level of products or services at a manufacturing company, initiating quality programs.

Therefore, staff authority gives staff personnel the right to offer advice in an effort to improve line operations.

LINE-AND-STAFF CONFLICT

Due to different positions and types of authority within a line-and-staff organization, conflict between line and staff personnel is almost inevitable.

differences in viewpoints is natural. Many reasons for conflict conflict on the part of line and staff personnel

can disrupt an entire organization

How to minimize conflict ?

1. Integrate line and staff personnel into a work team. The success of the work team depends on how well each group can work together in efforts to increase productivity and performance.

2. Ensure that the areas of responsibility and authority of both line and staff personnel are clearly defined.

3. Hold both line and staff personnel accountable for the results of their own activities. i.e. In other words, line personnel should not be entirely responsible for poor performance resulting from staff personnel advice.

Network Organisational StructureNetwork Organisational Structure

Network Organisation StructureNetwork Organisation Structure

Network Organisation Structure

With staff strength of more than 1500 permanent and contractual With staff strength of more than 1500 permanent and contractual employees, the organisation operates through its nationwide employees, the organisation operates through its nationwide network of fully equipped and fully functional zonal offices.network of fully equipped and fully functional zonal offices.

A network-based organization structure A network-based organization structure outsources business functions;outsources business functions;

harnesses volunteer labor;harnesses volunteer labor;

leverages information technology servicesleverages information technology services and and adopts a minimalist model.adopts a minimalist model.

Outsourcing Business FunctionsOutsourcing Business Functions A network-based organization structure outsources A network-based organization structure outsources

a variety of tasks and business functions for the a variety of tasks and business functions for the purposes of cutting costs, maintaining a flexible purposes of cutting costs, maintaining a flexible infrastructure and aiding in the scalability of the infrastructure and aiding in the scalability of the company. company.

For example, outsourcing specific tasks overseas For example, outsourcing specific tasks overseas with lower labor costs may be advantageous for the with lower labor costs may be advantageous for the company both in terms of efficiencies and lowering company both in terms of efficiencies and lowering operating expenses. (Medical Transcription)operating expenses. (Medical Transcription)

Volunteer Labor Volunteer labor may also lower operating expenses

with the added benefit of harnessing social capital and proven talent for future projects. Volunteer labor can be either professional or amateur in terms of scope and quality. User-generated content is a form of volunteer labor defined within a virtual environment, where volunteers may contribute content, perform tasks and/or improve a company's services.

Leveraging(advantage) Information Technology

Network-based organization structures greatly benefit from information technology services by leveraging communication capabilities that may be largely free,

For example: email, chatting services, voice-over Internet protocol (VoIP), a Web presence, community forums and social media. Moreover, information technology services provide an instant means of communicating, ensuring a rapid exchange of vital information.

Adopting a Minimalist Model Outsourcing tasks combined with leveraging

information technologies and volunteer labor allows for network-based organizations to significantly reduce operating expenses to the bare minimum required for operating.

For example, minimalist models employ just enough full-time workers to maintain essential functions necessary for day-to-day operations.

Vertical Organization

Vertical Organization

In a vertical organization, authority for setting objectives rests with a single leader, such as a chief executive, or a small group such as a board of directors.

The visual symbol of a vertical structure is the organization chart that shows the hierarchy of leaders and subordinates.

HorizontalOrganisation

Horizontal structures have more of a team approach.

A horizontal structure gives authority to individuals, teams and work groups with no hierarchical relationship among different groups i.e. A specific hierarchy does not exist.

A horizontal organization would also have a leader or business owner at the top with ultimate responsibility for strategic decisions. Other groups have the authority to make their own decisions.

Organic Organization Structure organic organization     Definition Organizational structure characterized by (1) Flatness: Communications and interactions are horizontal, (2) Low specialization: Knowledge resides wherever it is most useful, and

(3) Decentralization: great deal of formal and informal participation in decision making.

Organic organizations are comparatively more complex and harder to form, but are highly adaptable, flexible, and more suitable where external environment is rapidly changing and is unpredictable.

Also called open organizations.

 Delegation (Assigning work) Delegation means Delegation means assigning of certain responsibilities along assigning of certain responsibilities along

with the necessary authority by a superior to his subordinate with the necessary authority by a superior to his subordinate managersmanagers

Delegation is very essential for getting the work done through Delegation is very essential for getting the work done through others. others.

It is necessary to have brief understanding of three terms connected with the concept and process of delegation.

Authority Responsibility Accountability In Management

Responsibility Responsibility indicates the duty assigned to a

position. The person holding the position has to perform the

duty assigned. Responsibility is often referred to as an

obligation to perform a particular task assigned to a subordinate.

Responsibility is an obligation of individual to perform assigned duties to the best of his ability

under the direction of his executive leader."

Authority

Authority is the right or power assigned to an executive or a manager in order to achieve certain organizational objectives.

"Authority is the right or power to give orders”

Accountability

Every employee/manager is accountable for the job assigned to him. He is supposed to complete the job as per the expectations and inform his superior accordingly.

Accountability means that the subordinate should explain the factors responsible for non-performance or lack of performance

Accountability is the obligation of an individual to report formally to his superior about the work he has done to discharge the responsibility."

Four Stages In Process of Delegation of Authority

Assignment of duties to subordinates. Transfer of authority to perform the

duty. Acceptance of the assignment. Creation of Obligation / Accountability

/ Responsibility.

Objectives of Delegation of Authority

To reduce the excessive burden on the superiors i.e., executives and managers functioning at different levels.

To provide opportunities of growth and self development to junior executives.

To create a team of experienced and matured managers for the Organisation. It acts as a technique of management and human resource development.

To improve individual as well as overall efficiency of the Organisation.

Process of Delegation of Authority

Authority, Responsibility and Accountability are Inter-related

The superior transfers his duties/responsibilities to his subordinate and also give necessary authority for performing the responsibilities assigned. At the same time, the superior is accountable for the performance of his subordinate.

Formal Organisation & Informal Organisation 

Formal Organisation is formed when two or more persons come together. They have a common objective or goal. They are willing to work together to achieve this similar objective.

Informal Organisation is a network of personal and social relationships

Formal Formed by Whom? A formal organisation is formed

by the top level management

Rules and Regulations to follow?

The members of a formal organisation have to follow certain rules and regulations. These rules are available in writing (documented). They are made by a formal authority (superiors). If the members follow these rules properly, then they will be rewarded. However, if they do not follow these rules, they will be punished.

Informal

An informal organisation is formed by social forces within the formal organisation.

The members of an informal organisation do not have to follow any rules and regulations.

Any Duties and Responsibilities?

In a formal organisation, the duties, responsibilities, authority and accountability of each member is well-defined.

Is any Objectives or Goals ?

In a formal organisation, the objectives or goals are specific and well-defined. The main objectives of a formal organisation are productivity, growth, and expansion

In an informal organisation, there are no fixed duties, responsibilities, authority, accountability, etc. for the members.

In an informal organisation, the objectives are not specific and well-defined. The main objectives of an informal organisation are friendship, security, common interest, individual and group satisfaction, etc.

How far it is Stable? A formal organisation is

stable. A formal organisation has a

system of co-ordination. It also has a system of authority. It has a clear superior-subordinate relationship. In a formal organisation, the objectives are specific and well-defined. Ex. a company, a school, a college, a bank, etc.

An informal organisation is not stable.

It has no system of co-ordination and authority.

It doesn't have any superior-subordinate relationship nor any specific and well-defined objectives.

They work, travel, and eat together. Therefore, they become good friends and companions. There are many groups of friends in a formal organisation. These groups are called informal organisation.

A formal organisation is shown on the organisation chart.

A formal organisation uses formal channels of communication

In a formal organisation, there exist a superior-subordinate relationship.

The members of the formal organisation get financial benefits and perks like wages or salaries, bonus, traveling allowances, health insurance, etc.

An informal organisation is not shown on the organisation chart.

An informal organisation uses informal channels of communication (i.e. grapevine)

In an informal organisation, there is no such superior-subordinate relationship

The members of informal organisation get social and personal benefits like friend circle, community, groups, etc.

Theory Z - William Ouchi

Ouchi was born and educated in America, but was of Japanese descent.

During the 1970s, William Ouchi, took the Theory X, Theory Y concept one step further: Theory Z.

This is the participative model. He visited Japan and studied their success with team and

participative management and developed this theory.

Ouchi contrasted American types of organizations (Type A) that were rooted in the United States' tradition of individualism with Japanese organizations (Type J) that drew upon the Japanese heritage of collectivism. He argued that an emerging management philosophy, which came to be called Theory Z, would allow organizations to enjoy many of the advantages of both systems. 

i.e.Theory Z is a hybrid management approach combining Japanese management philosophies with U.S. culture

Theory Z management approach could lead to

greater employee job satisfaction, lower rates of absenteeism and

turnover, higher quality products, and better overall financial and other

performance. motivation, and commitment

Theory X Theory Y Theory Z

Workers' Motivation.

Theory X Theory Y Theory Z

Manager assumes

that the only

motivation that

works for employees

is $$money$$.

Manager assumes that employees

are motivated by their needs to fulfill their social, esteem, self-actualization, and

security.

Manager assumes that employees are motivated by a strong sense of

commitment to be a part

of something worthwhile

-- the self-actualization

need. Workers'

attitude toward work.

Manager assumes that the employees dislike work, avoids responsibility, and

seeks only security

from work (the

paycheck!).

Manager believes that employees see work as a natural activity and will seek out opportunities to have

increased responsibility

and understanding of

their tasks.

Manager believes that employees will not only seek out

opportunities for

responsibility, in fact,

they crave opportunities

to advance and learn

more about the

company.

Manager believes

that workers will only

respond to coercion (act),

control, direction

(telling them exactly

what to do), or

threatening

punishment or firing

Manager

believes that workers will

respond best to

favorable working

conditions that do not

pose threats or strong

control.

Manager

believes that employees

should learn the

business through the

various departments,

come up through the

ranks slowly, and that

the company will get the

best benefits from that

employee by making it

possible for him/her to

have "lifetime

employment."

The result will be strong

bonds of loyalty

Managers assume the average worker is gullible and not very bright.

·is indifferent to the organization's needs.

· dislikes work.

· is motivated only by financial incentives.

· must be closely supervised.

Managers assume the average worker:

· feels work is natural.

· can enjoy work.

· is motivated by the desire to do a good job.

· might do a better job if control is minimized.

· has potential for development and advancement.

Managers assume the average worker wants to be involved in

managing a company and building trust among all organizational members

is central to raising productivity.

Japanese Management Japanese Manufacturing Techniques: Nine Hidden Lessons in

Simplicity", Richard Schonberger presented nine "lessons" the world could learn from the Japanese. These lessons included:

Management technology is a highly transportable technology. Just-in-time production exposes problems otherwise hidden by excess

inventories and staff. Quality begins with production, and requires a company-wide "habit of

improvement." Culture is no obstacle; techniques can change behavior. Simplify, and goods will flow like water. Flexibility opens doors. Travel light and make numerous trips More self-improvement, fewer programs, less specialist intervention. Simplicity is the natural state.1. .

U.S. Vs Japaneese Management U.S. With short-term

commitments by employees.

Employment at will (the employer or the employee can terminate the employment relationship at any time)  

Japaneese Long-term employment life-long commitments

to their employees and expect loyalty in return.

stability in the organization and job security among employees

Emphasizes individual decision-making.

Individual accountability and performance appraisal, recognizing individual achievements.

Short-term evaluations of performance and rapid promotion of high achievers

Emphasizes communication, collaboration, and consensus( Involving the willing participation of all parties) in decision making.

Oriented to the group

Slow evaluation and promotion.

Specialized career paths, with employees avoiding jumps from functional area to another.

Concern for employees within the workplace. 

 Non-specialized career paths. (Less specialised).

Concern for employees that goes beyond the workplace.

Quantitative Systems for Operations Management

Increasing quality of managerial decision-making through the application of mathematical and statistical methods.

The systems focuses on understanding the organization as an open system that transforms inputs into outputs. 

 It is too abstract and too complex. Emerges from operations research and management science. It is a mathematical and statistical solution to

problems using optimization models.

Contingency Approach Contingency refers to the immediate (contingent or

touching) circumstances.

The contingency school focuses on applying management principles and processes as dictated by the unique characteristics of each situation.

It emphasizes that there is no one best way to manage and that it depends on various situational factors, such as the external environment, technology, organizational characteristics, characteristics of the manager, and characteristics of the subordinates.

The contingency approach believes that it is impossible to select one way of managing that works best in all situations ( Taylor.)

Their approach is to identify the conditions of a task (scientific management school), managerial job (administrative management school) and person (human relations school) as parts of a complete management situation and attempt to integrate them all into a solution which is most appropriate for a specific circumstance.

The manager has to systematically try to identify which technique or approach will be the best solution for a problem which exists in a particular circumstance or context.

The situational or contingency theory asserts that when managers make a decision, they must take into account all aspects of the current situation and act

on those aspects that are key to the situation at hand.

It is important to note that the contingency approach stresses the need for managers to examine the relationship between the internal and external environment of an organization.

DecentralisationDecentralisation

Decentralisation, the authority is distributed to all the Decentralisation, the authority is distributed to all the levels of management.levels of management.

Delegation is very essential for getting the work done Delegation is very essential for getting the work done through others. Therefore, it is used by all through others. Therefore, it is used by all organisations.organisations.

OROR

Decentralisation of authority means Decentralisation of authority means conscious/systematic effort to bring dispersal conscious/systematic effort to bring dispersal (spreading) of decision making power to the lower (spreading) of decision making power to the lower levels of the Organisation.levels of the Organisation.

Delegation takes place from superior to subordinate.

Delegation may be refused by subordinates.

In delegation, the ultimate responsibility lies with the superior.

In delegation the final control lies with the superior. That is, in delegation the superior keeps complete control.

Decentralisation take place from the top level management to the different departments.

Decentralisation is wide because it involves all the department of the organisation.

In decentralisation the controlling is done by the head of departments. The top level management keeps minimum control.

In decentralisation, the ultimate responsibility lies with the head of department (HOD).

Decentralisation is optional. Therefore, it is not used by all organisations. It is only used by large organisations.

After delegation, it is very easy to withdraw (take back) the authority from the subordinate.

After decentralisation, it is very difficult to withdraw the authority from the department

The decentralisation of Coca-ColaThe decentralisation of Coca-Cola

Coca-Cola decentralised its organisational Coca-Cola decentralised its organisational structure by cutting half of the staff at its structure by cutting half of the staff at its

Atlanta headquarters and moving the Atlanta headquarters and moving the regional chieftains closer to their local regional chieftains closer to their local markets. In markets. In

India, decision making has been moved India, decision making has been moved further down to different areas of that further down to different areas of that diverse country.diverse country.

Forces for (Forces for (

de)centralisation de)centralisation de)centralisation de)centralisation

Henry MintzbergHenry Mintzberg

Henry Mintzberg, synthesized organisational Henry Mintzberg, synthesized organisational design literature intodesign literature into five ideal organisational five ideal organisational forms or configurationsforms or configurations that do not exist in the that do not exist in the real world, but provide consultants and real world, but provide consultants and managers a framework to understand and managers a framework to understand and design organisational structures.design organisational structures.

Mintzberg defined organisational structure as "Mintzberg defined organisational structure as " the sum total of the ways in which it divides its labour into distinct tasks and then achieves coordination among themthe sum total of the ways in which it divides its labour into distinct tasks and then achieves coordination among them ". Each configuration contains six ". Each configuration contains six components:components:

operating coreoperating core: the people directly related to the production of services or products;: the people directly related to the production of services or products; strategic apexstrategic apex: serves the needs of those people who control the organisation;: serves the needs of those people who control the organisation; middle linemiddle line: the managers who connect the strategic apex with the operating core;: the managers who connect the strategic apex with the operating core; technostructuretechnostructure: the analysts who design, plan, change or train the operating core;: the analysts who design, plan, change or train the operating core; support staffsupport staff: the specialists who provide support to the organisation outside of the operating core's activities;: the specialists who provide support to the organisation outside of the operating core's activities; ideologyideology: the traditions and beliefs that make the organisation unique.: the traditions and beliefs that make the organisation unique.    The components are linked by four flows:The components are linked by four flows: authority;authority; work material;work material; information;information; decision processes.decision processes.    The organisation's structure depends on the organisation itself, its members, the distribution of power, the environment and the technical system. Design decisions can be grouped into the:The organisation's structure depends on the organisation itself, its members, the distribution of power, the environment and the technical system. Design decisions can be grouped into the: design of positions;design of positions; design of superstructure;design of superstructure; design of lateral linkages;design of lateral linkages; design of decision making system.design of decision making system.    Work constellations are quasi-independent cliques of individuals who work on decisions appropriate to their level in the hierarchy. These groups range from the formal to the informal.Work constellations are quasi-independent cliques of individuals who work on decisions appropriate to their level in the hierarchy. These groups range from the formal to the informal.    Mintzberg used the components, flows, work constellations and coordination mechanisms to define five configurations:Mintzberg used the components, flows, work constellations and coordination mechanisms to define five configurations:    1. 1. Simple StructureSimple Structure Entrepreneurial setting: relies on direct supervision from the strategic apex, the CEO.Entrepreneurial setting: relies on direct supervision from the strategic apex, the CEO.    2. 2. Machine BureaucracyMachine Bureaucracy Large organisations: relies on standardisation of work processes by the techno-structure.Large organisations: relies on standardisation of work processes by the techno-structure.    3. 3. Professional BureaucracyProfessional Bureaucracy The professional services firm: relies on the professionals' standardisation of skills and knowledge in the operating core.The professional services firm: relies on the professionals' standardisation of skills and knowledge in the operating core.    4. 4. Divisionalised FormDivisionalised Form Multi-divisional organisation: relies on standardisation of outputs; middle-line managers run independent divisions.Multi-divisional organisation: relies on standardisation of outputs; middle-line managers run independent divisions.    5. 5. AdhocracyAdhocracy Project organisations: highly organic structure with little formalization; relies on mutual adjustment as the key coordinating mechanism within and between these project teams. In later work Mintzberg added Project organisations: highly organic structure with little formalization; relies on mutual adjustment as the key coordinating mechanism within and between these project teams. In later work Mintzberg added

two more configurations:two more configurations:    6. 6. Missionary FormMissionary Form Coordination occurs based on commonly held ideologies or beliefs: standardisation of norms.Coordination occurs based on commonly held ideologies or beliefs: standardisation of norms.    7. 7. Political FormPolitical Form No coordination form is dominant: control is based on forming alliances.No coordination form is dominant: control is based on forming alliances.    Each configuration represents a force that pulls organisations in different structural directions. For example, operators want to professionalize in their drive to control their work. Therefore, they favour a Each configuration represents a force that pulls organisations in different structural directions. For example, operators want to professionalize in their drive to control their work. Therefore, they favour a

professional bureaucracy based on the standardisation of skills.professional bureaucracy based on the standardisation of skills.    The structure an organisation chooses depends, to a great extent, on the power of each of Minzberg's six components.The structure an organisation chooses depends, to a great extent, on the power of each of Minzberg's six components.