Presented by: Deepak Agrawal (08MTHYD023) <ul><li>Organizational Structure </li></ul>
Is it related to your behavior??? <ul><li>How you form a group.. </li></ul><ul><li>How you sit in a group.. </li></ul><ul>...
FLOW of Presentation <ul><li>Elements that define organization’s structure </li></ul><ul><li>Different Organizational Desi...
Defining Organizational Structure <ul><li>Organizational Structure </li></ul><ul><ul><li>defines how job tasks are formall...
Organizational Structure (1) <ul><li>Work Specialization </li></ul><ul><ul><li>The degree to which tasks in the organizati...
Organizational Structure (2) <ul><li>Functional  </li></ul><ul><ul><li>Grouping jobs by functions performed </li></ul></ul...
2.1- Functional Departmentalization <ul><li>Advantages </li></ul><ul><ul><li>Efficiencies from putting together similar sp...
2.2- Product Departmentalization + Allows specialization in particular products and services + Managers can become experts...
2.3- Geographical Departmentalization <ul><li>Advantages </li></ul><ul><ul><li>More effective and efficient handling of sp...
2.4- Process Departmentalization + More efficient flow of work activities – Can only be used with certain types of product...
2.5- Customer Departmentalization + Customers’ needs and problems can be met by specialists - Duplication of functions - L...
Organization Structure (3) <ul><li>Chain of Command </li></ul><ul><ul><li>The continuous line of authority that extends fr...
Organization Structure (4) <ul><li>Span of Control </li></ul><ul><ul><li>The number of employees who can be effectively an...
4.1- Span of Control <ul><li>Width of span is affected by: </li></ul><ul><ul><li>Skills and abilities of the manager </li>...
Organization Structure (5) <ul><li>Centralization </li></ul><ul><ul><li>The degree to which decision-making is  concentrat...
Organization Structure (6) <ul><li>Formalization </li></ul><ul><ul><li>The degree to which jobs within the organization ar...
DIFFERENT ORGANIZATIONAL DESIGNS <ul><li>Part-2 </li></ul>Organizational Structure
Traditional Structures <ul><ul><li>Simple structure </li></ul></ul><ul><ul><ul><li>Low departmentalization, Wide spans of ...
Traditional Structures <ul><ul><li>The Bureaucracy </li></ul></ul><ul><ul><ul><li>High departmentalization by function,  N...
Traditional Structures <ul><ul><li>The Matrix structure </li></ul></ul><ul><ul><ul><li>Departmentalized by both functions ...
New Design Options <ul><ul><li>Team structures </li></ul></ul><ul><ul><ul><li>The entire organization is made up of work g...
New Design Options <ul><ul><li>Virtual Organization </li></ul></ul><ul><ul><ul><li>A small core organization that outsourc...
New Design Options <ul><ul><li>Boundaryless Organization (Concept) </li></ul></ul><ul><ul><ul><li>It behaves more like an ...
ORGANIZATION DESIGN DECISIONS <ul><li>Part-3 </li></ul>Organizational Structure
<ul><ul><li>A rigid and tightly controlled structure </li></ul></ul><ul><ul><ul><li>High specialization </li></ul></ul></u...
Contingency Factors Organizational Structure Innovation Cost-minimization Imitation Strategy Larger Smaller Routine Non-ro...
Organization Structure and Employee Behavior Organizational Structure Determinants Associated with Moderated by Individual...
THANK YOU FOR YOUR PATIENCE…
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7 Organizational Structure Deepak Agrawal

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7 Organizational Structure Deepak Agrawal

  1. 1. Presented by: Deepak Agrawal (08MTHYD023) <ul><li>Organizational Structure </li></ul>
  2. 2. Is it related to your behavior??? <ul><li>How you form a group.. </li></ul><ul><li>How you sit in a group.. </li></ul><ul><li>How you react at any situation.. </li></ul><ul><li>How you respect position.. </li></ul><ul><li>How much freedom you have.. </li></ul><ul><li>How much authority and responsibilities you have.. </li></ul><ul><li>How much power you have.. </li></ul>Organizational Structure If Yes Then obviously Organization structure also lead to individual(employee) behavior….
  3. 3. FLOW of Presentation <ul><li>Elements that define organization’s structure </li></ul><ul><li>Different Organizational Designs </li></ul><ul><ul><li>Three traditional organizational designs </li></ul></ul><ul><ul><ul><li>Simple, Bureaucracy, Matrix structure </li></ul></ul></ul><ul><ul><li>Some new design options </li></ul></ul><ul><ul><ul><li>Team Structure, Virtual Organization, Boundaryless organization </li></ul></ul></ul><ul><li>Contrast Mechanistic and organic structure </li></ul><ul><li>Influencing factors </li></ul><ul><ul><li>Strategy, Organization size, Technology, Environment </li></ul></ul><ul><li>Organizational Design and Employee Behavior </li></ul>Organizational Structure
  4. 4. Defining Organizational Structure <ul><li>Organizational Structure </li></ul><ul><ul><li>defines how job tasks are formally divided, grouped, and coordinated. </li></ul></ul><ul><li>Organizational Design </li></ul><ul><ul><li>A process involving decisions about six key elements: </li></ul></ul><ul><ul><ul><li>Work specialization </li></ul></ul></ul><ul><ul><ul><li>Departmentalization </li></ul></ul></ul><ul><ul><ul><li>Chain of command </li></ul></ul></ul><ul><ul><ul><li>Span of control </li></ul></ul></ul><ul><ul><ul><li>Centralization and decentralization </li></ul></ul></ul><ul><ul><ul><li>Formalization </li></ul></ul></ul>Organizational Structure
  5. 5. Organizational Structure (1) <ul><li>Work Specialization </li></ul><ul><ul><li>The degree to which tasks in the organization are sub-divided into separate </li></ul></ul><ul><ul><li>jobs with each step </li></ul></ul><ul><ul><li>completed by a </li></ul></ul><ul><ul><li>different person. </li></ul></ul><ul><ul><li>Overspecialization can result in human diseconomies from boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnover. </li></ul></ul>Organizational Structure Productivity Work Specialization Low High High Impact from economies of specialization Impact from human diseconomies
  6. 6. Organizational Structure (2) <ul><li>Functional </li></ul><ul><ul><li>Grouping jobs by functions performed </li></ul></ul><ul><li>Product </li></ul><ul><ul><li>Grouping jobs by product line </li></ul></ul><ul><li>Geographical </li></ul><ul><ul><li>Grouping jobs on the basis of territory or geography </li></ul></ul><ul><li>Process </li></ul><ul><ul><li>Grouping jobs on the basis of product or customer flow </li></ul></ul><ul><li>Customer </li></ul><ul><ul><li>Grouping jobs by type of customer and needs </li></ul></ul>Organizational Structure <ul><li>Departmentalization by Type </li></ul>
  7. 7. 2.1- Functional Departmentalization <ul><li>Advantages </li></ul><ul><ul><li>Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations </li></ul></ul><ul><ul><li>Coordination within functional area </li></ul></ul><ul><ul><li>In-depth specialization </li></ul></ul><ul><li>Disadvantages </li></ul><ul><ul><li>Poor communication across functional areas </li></ul></ul><ul><ul><li>Limited view of organizational goals </li></ul></ul>Organizational Structure
  8. 8. 2.2- Product Departmentalization + Allows specialization in particular products and services + Managers can become experts in their industry + Closer to customers – Duplication of functions – Limited view of organizational goals Organizational Structure
  9. 9. 2.3- Geographical Departmentalization <ul><li>Advantages </li></ul><ul><ul><li>More effective and efficient handling of specific regional issues that arise </li></ul></ul><ul><ul><li>Serve needs of unique geographic markets better </li></ul></ul><ul><li>Disadvantages </li></ul><ul><ul><li>Duplication of functions </li></ul></ul><ul><ul><li>Can feel isolated from other organizational areas </li></ul></ul>Organizational Structure
  10. 10. 2.4- Process Departmentalization + More efficient flow of work activities – Can only be used with certain types of products Organizational Structure
  11. 11. 2.5- Customer Departmentalization + Customers’ needs and problems can be met by specialists - Duplication of functions - Limited view of organizational goals Organizational Structure
  12. 12. Organization Structure (3) <ul><li>Chain of Command </li></ul><ul><ul><li>The continuous line of authority that extends from upper levels of an organization to the lowest levels of the organization and clarifies who reports to whom. </li></ul></ul><ul><li>Authority </li></ul><ul><ul><li>The rights inherent in a managerial position to tell people what to do and to expect them to do it. </li></ul></ul><ul><li>Unity of Command </li></ul><ul><ul><li>The concept that a person should have one boss and should report only to that person. </li></ul></ul>Organizational Structure
  13. 13. Organization Structure (4) <ul><li>Span of Control </li></ul><ul><ul><li>The number of employees who can be effectively and efficiently supervised by a manager. </li></ul></ul>Organizational Structure
  14. 14. 4.1- Span of Control <ul><li>Width of span is affected by: </li></ul><ul><ul><li>Skills and abilities of the manager </li></ul></ul><ul><ul><li>Employee characteristics </li></ul></ul><ul><ul><li>Characteristics of the work being done </li></ul></ul><ul><ul><li>Similarity of tasks </li></ul></ul><ul><ul><li>Complexity of tasks </li></ul></ul><ul><ul><li>Physical proximity of subordinates </li></ul></ul><ul><ul><li>Standardization of tasks </li></ul></ul>Organizational Structure
  15. 15. Organization Structure (5) <ul><li>Centralization </li></ul><ul><ul><li>The degree to which decision-making is concentrated at a single point in the organizations. </li></ul></ul><ul><ul><ul><li>Reduced information overload on upper managers. </li></ul></ul></ul><ul><ul><ul><li>Increased motivation and accountability throughout organization. </li></ul></ul></ul><ul><ul><ul><li>Fewer managers; lower bureaucratic costs . </li></ul></ul></ul><ul><li>Decentralization </li></ul><ul><ul><li>Organizations in which decision-making is pushed down to the managers who are closest to the action . </li></ul></ul><ul><ul><ul><li>Easier coordination of organizational activities. </li></ul></ul></ul><ul><ul><ul><li>Exercise of strong leadership in crisis . </li></ul></ul></ul><ul><ul><ul><li>Faster decision making and response. </li></ul></ul></ul>Organizational Structure
  16. 16. Organization Structure (6) <ul><li>Formalization </li></ul><ul><ul><li>The degree to which jobs within the organization are standardized and the extent to which employee behavior is guided by rules and procedures . </li></ul></ul><ul><ul><ul><li>Highly formalized jobs offer little discretion over what is to be done. </li></ul></ul></ul><ul><ul><ul><li>Low formalization means fewer constraints on how employees do their work. </li></ul></ul></ul>Organizational Structure
  17. 17. DIFFERENT ORGANIZATIONAL DESIGNS <ul><li>Part-2 </li></ul>Organizational Structure
  18. 18. Traditional Structures <ul><ul><li>Simple structure </li></ul></ul><ul><ul><ul><li>Low departmentalization, Wide spans of control, Centralized authority, Little formalization </li></ul></ul></ul><ul><ul><ul><ul><li>Flat Organization (2 or 3 vertical levels) </li></ul></ul></ul></ul><ul><ul><li>Strengths </li></ul></ul><ul><ul><ul><li>Simple </li></ul></ul></ul><ul><ul><ul><li>Fast and flexible </li></ul></ul></ul><ul><ul><ul><li>Inexpensive to maintain </li></ul></ul></ul><ul><ul><ul><li>Clear accountability </li></ul></ul></ul><ul><ul><li>Weaknesses </li></ul></ul><ul><ul><ul><li>Information Overload at top </li></ul></ul></ul><ul><ul><ul><li>Slower decision making if large </li></ul></ul></ul><ul><ul><ul><li>Dependency on one figurehead </li></ul></ul></ul>Organizational Structure
  19. 19. Traditional Structures <ul><ul><li>The Bureaucracy </li></ul></ul><ul><ul><ul><li>High departmentalization by function, Narrow span of control , Centralized authority, High formalization </li></ul></ul></ul><ul><ul><li>Strengths </li></ul></ul><ul><ul><ul><li>Efficiency to perform standardized tasks </li></ul></ul></ul><ul><ul><ul><li>Economies of scale </li></ul></ul></ul><ul><ul><ul><li>Minimum duplication of personnel & equipment </li></ul></ul></ul><ul><ul><ul><li>Cost advantage by less talent hunting </li></ul></ul></ul><ul><ul><li>Weaknesses </li></ul></ul><ul><ul><ul><li>Subunit Conflicts (“ Bureaupathologies” ) </li></ul></ul></ul><ul><ul><ul><li>Fails to take environment into account </li></ul></ul></ul><ul><ul><ul><li>Is less effective during change or turbulence, requiring flexibility and action </li></ul></ul></ul><ul><ul><ul><li>Ignores interpersonal relationships </li></ul></ul></ul>Organizational Structure
  20. 20. Traditional Structures <ul><ul><li>The Matrix structure </li></ul></ul><ul><ul><ul><li>Departmentalized by both functions and products, No unity of command </li></ul></ul></ul><ul><ul><li>Strengths </li></ul></ul><ul><ul><ul><li>Strength of both function and product departmentalization </li></ul></ul></ul><ul><ul><ul><li>Better and direct communication </li></ul></ul></ul><ul><ul><ul><li>More Flexibility </li></ul></ul></ul><ul><ul><ul><li>Reduce Bureaupathologies </li></ul></ul></ul><ul><ul><ul><li>Maximizes use of employees’ skills </li></ul></ul></ul><ul><ul><li>Weaknesses </li></ul></ul><ul><ul><ul><li>Dual chain of command </li></ul></ul></ul><ul><ul><ul><li>Power struggle </li></ul></ul></ul><ul><ul><ul><li>Role conflict </li></ul></ul></ul><ul><ul><ul><li>Less predictability </li></ul></ul></ul>Organizational Structure  Two-boss employee
  21. 21. New Design Options <ul><ul><li>Team structures </li></ul></ul><ul><ul><ul><li>The entire organization is made up of work groups or self-managed teams. </li></ul></ul></ul><ul><ul><ul><li>Require Generalists as well as specialists employee </li></ul></ul></ul><ul><ul><ul><li>No departmentalization, Decentralized </li></ul></ul></ul><ul><ul><li>Strengths </li></ul></ul><ul><ul><ul><li>Flexibility </li></ul></ul></ul><ul><ul><ul><li>Empowered employees </li></ul></ul></ul><ul><ul><ul><li>Reduced barriers among functional areas (Cross-functional) </li></ul></ul></ul><ul><ul><li>Weaknesses </li></ul></ul><ul><ul><ul><li>No clear chain of command </li></ul></ul></ul><ul><ul><ul><li>Pressure on teams to perform </li></ul></ul></ul>Organizational Structure
  22. 22. New Design Options <ul><ul><li>Virtual Organization </li></ul></ul><ul><ul><ul><li>A small core organization that outsources its major business functions in order to concentrate what it does best. </li></ul></ul></ul><ul><ul><ul><li>Highly centralized, no departmentalization </li></ul></ul></ul><ul><ul><ul><li>Only coordination and controlling relationships </li></ul></ul></ul><ul><ul><li>Strengths </li></ul></ul><ul><ul><ul><li>Choosing best alternatives always </li></ul></ul></ul><ul><ul><ul><li>Best for finite period existence (e.g. Olympics) </li></ul></ul></ul><ul><ul><ul><li>Maximum flexibility </li></ul></ul></ul><ul><ul><li>Weaknesses </li></ul></ul><ul><ul><ul><li>Reduces management’s control over key parts </li></ul></ul></ul>Organizational Structure
  23. 23. New Design Options <ul><ul><li>Boundaryless Organization (Concept) </li></ul></ul><ul><ul><ul><li>It behaves more like an organism encouraging better integration among employees and closer partnerships with Stakeholders. </li></ul></ul></ul><ul><ul><ul><ul><li>No chain of command, limitless spans of control </li></ul></ul></ul></ul><ul><ul><li>Strengths </li></ul></ul><ul><ul><ul><li>Highly flexible and responsive </li></ul></ul></ul><ul><ul><ul><li>Draws on talent wherever it’s found </li></ul></ul></ul><ul><ul><ul><li>Cross hierarchical team, Cross functional team </li></ul></ul></ul><ul><ul><ul><li>No external boundaries </li></ul></ul></ul><ul><ul><li>Weaknesses </li></ul></ul><ul><ul><ul><li>Lack of control </li></ul></ul></ul><ul><ul><ul><li>Communication difficulties </li></ul></ul></ul>Organizational Structure
  24. 24. ORGANIZATION DESIGN DECISIONS <ul><li>Part-3 </li></ul>Organizational Structure
  25. 25. <ul><ul><li>A rigid and tightly controlled structure </li></ul></ul><ul><ul><ul><li>High specialization </li></ul></ul></ul><ul><ul><ul><li>Rigid departmentalization </li></ul></ul></ul><ul><ul><ul><li>Clear chain of command </li></ul></ul></ul><ul><ul><ul><li>Narrow spans of control </li></ul></ul></ul><ul><ul><ul><li>High formalization </li></ul></ul></ul><ul><ul><ul><li>Centralization </li></ul></ul></ul><ul><ul><ul><li>Limited information network (downward) </li></ul></ul></ul>Organizational Design Decisions <ul><ul><li>Highly flexible and adaptable structure </li></ul></ul><ul><ul><ul><li>Cross functional team </li></ul></ul></ul><ul><ul><ul><li>Cross hierarchical team </li></ul></ul></ul><ul><ul><ul><li>Free flow of information </li></ul></ul></ul><ul><ul><ul><li>Wide spans of control </li></ul></ul></ul><ul><ul><ul><li>Less formalization </li></ul></ul></ul><ul><ul><ul><li>Decentralization </li></ul></ul></ul><ul><ul><ul><li>Free flow of information </li></ul></ul></ul>Organizational Structure
  26. 26. Contingency Factors Organizational Structure Innovation Cost-minimization Imitation Strategy Larger Smaller Routine Non-routine Strategy Size Technology Environment Stable Simple Dynamic Complex Structural decisions are influenced by:
  27. 27. Organization Structure and Employee Behavior Organizational Structure Determinants Associated with Moderated by Individual Differences and cultural norms
  28. 28. THANK YOU FOR YOUR PATIENCE…
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