structural consideration & type of structure

8/9/2019 Structural Consideration & Type of Structure

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Structural Consideration &

Type of Structure


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What is Organization Structure?

A organization structure is the way how tasks andsub-tasks reuired to i!ple!ent a strategy arearranged"

Organization structure is the for!al syste! of tasksand authority relationship that control how peoplecoordinate their actions and use resources to achie#eorganizational goals"

Structure balances the need for specialization withthe need for integration"


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Type of Structure

Si!ple

$unctional

%i#isional

Strategic usiness 'nit(atri)


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Si!ple Organizational Structure

An organizational for! in which the owner-!anager!akes all !a*or decision directly and !onitors allacti#ities while the staff ser#es as an e)tension of the

!anager+s super#isory authority",n the s!allest business enterprise the si!ple

structure pre#ails"

All strategic and operating decisions are centralized

in the owner-!anager+s do!ain"


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A si!ple structure

Owner-(anager

.!ployees


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Ad#antages

$acilitates control of all the business+s acti#ities"

/apid decision !aking andability to change with

!arket signals"Si!ple and infor!al

!oti#ation 0 reward 0control syste!s

1ery de!anding on theowner-!anager"

,ncreasingly inadeuate as #olu!e e)pands"

%oes not facilitatede#elop!ent of future!anager"

Tends to focus owner-

!anager on day to day!atters and not on futurestrategy"

%isad#antages


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$unctional Organizational Structure

$unctional organization is a type of organizationstructure that uses the principle of specialization

based on function or role it allows decision to be

decentralized since issue are delegated to specializedpersons or units lea#ing the! the responsibility ofi!ple!enting e#aluating or controlling the gi#enprocedures or goals"


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$unctional Structure

Chief .)ecuti#e officer

Staff $unction

$inance0personnel

Line functions

2roduction (arketing .ngineering


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Ad#antages

.fficiency throughspecialization

,!pro#ed de#elop!ent offunctional e)pertise"

%ifferentiates and delegatesday to day operatingdecisions"

/etain centralized control ofstrategic decisions"

2ro!otes narrowspecialization and potentialfunctional ri#alry or conflict"

%ifficulty in functional

coordination and inter-functional decision !aking"

Staff-line conflict"

3i!its internal de#elop!entof general !anagers"

%isad#antages


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%i#isional Organizational Structure

A di#isional structure di#ides the co!pany intodi#ision that bring together those e!ployeesin#ol#ed with a certain type of product or !arket

ser#ice" A type of organizational configuration that groups

together those e!ployees who are responsible for aparticular product type or !arket ser#ice accordingly

to workflow" The di#isional structure of a business ofa business tends to increase fle)ibility and it can also

be broken down further into product !arket andgeographic structure"


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%i#isional Organization Structure

Chief .)ecuti#e Officer

Vice President

Administrative Services

Vice President

Operating Support

4eneral !anager%i#ision A

4eneral !anager%i#ision

4eneral !anager%i#ision C

2roduction0Operation 2roduction0Operation 2roduction0Operation

(arketing (arketing (arketing

Personnel

Accounting/Control

Division Planning

Personnel Personnel

Accounting/Control Accounting/Control

Division Planning Division Planning


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Ad#antages

$orces coordination andnecessary authority down tothe appropriate le#el for rapidresponse"

Sharply focuses accountabilityfor perfor!ance"

/etain functionalspecialization within eachdi#ision

4ood training ground forstrategic !anagers"

$osters potentiallydysfunctional co!petitionfor corporate le#elresources"

2roble! with the e)tent ofauthority gi#en to di#ision!anagers"

2otential for policy

inconsistencies betweendi#isions"

%isad#antages


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Strategic usiness 'nit

A strategic business unit is a profit centre whichfocuses on product offering and !arket seg!entS's typically ha#e a discrete !arketing plananalysis of co!petition and !arketing ca!paigne#en though they !ay be part of a large businessentity"


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S' Organization Structure


Vice President

Administrative Services

Vice President

Operating Support

4roup 1ice 2residentS'5



Divisions Divisions Divisions

A B C A B BC C A


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Ad#antages

,!pro#es coordination between di#ision with si!ilarstrategic concerns andproduct0!arket en#iron!ent"

$acilitates distinct and in-depth business planning atthe corporate and businessle#els"

Channels accountability to

distinct business units"

2laces another layer of!anage!ent between thedi#isional and corporate!anage!ent"

%ysfunctional co!petition forcorporate resources !ayincrease"

The role of the group #icepresident can be difficult to

define"

%isad#antages


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(atri) Organization Structure

An organization structure that facilitates thehorizontal flow of skill and infor!ation" ,t is used!ainly in the !anage!ent of large pro*ects orproduct de#elop!ent processes drawing e!ployeesfro! different functional disciplines for assign!entto a tea! without re!o#ing the! fro! theirrespecti#e positions"


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(atri) Organizational Structure


2ro*ect

(anagerC

2ro*ect(anager

2ro*ect(anager

A

1ice 2resident

.ngineering

1ice 2resident

.ngineering

1ice 2resident

.ngineering

1ice 2resident

.ngineering

Engineering

Staff

Engineering

Staff

Engineering

Staff

Production

Staff

Production

Staff

Production

Staff

Purchasing

Agent

Purchasing

Agent

Purchasing

Agent

Administration

Coordination

Administration

Coordination

Administration

Coordination


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Ad#antages

Acco!!odates a wide #arietyof pro*ect oriented businessacti#ity"

4ood training ground for

strategic !anagers"(a)i!ize efficient use of

functional !anagers"

$osters creati#ity and!ultiple sources of di#ersity"

%ual accountability can createconfusion and contradictorypolicies"

8ecessitates tre!endous

horizontal and #erticalcoordination"

%isad#antages


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Thank You…

structural consideration & type of structure

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