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Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
Pm wk 5   organisational structure
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Pm wk 5 organisational structure

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  • 1. Malaysian Institute of Aviation Technology 1 Principle of Management Week 5 Organizational Structure & Design.
  • 2. Malaysian Institute of Aviation Technology 2 Organisational Structure and Designs. Organisational Design Decisions. Common and contemporary organisational designs
  • 3. Malaysian Institute of Aviation Technology 3 • Table of contents; – Defining organisational structure and design. – Organisational Design Decision. – Common and contemporary organisational design. – Case application- A laboratory in organisational designs. – Summary. – Motivating your self. – Reading assignment (Group Discussion and presentation).
  • 4. Malaysian Institute of Aviation Technology 4 The process of creating an organisation’s structure DefinitionDefinition Organising Purpose Divides work to be done into specific jobs and departments Coordinates diverse organisational tasks Coordinates diverse organisational tasks Clusters jobs into units Establishes relationship among individuals, groups and departments Establishes formal lines of authority Allocates and deploys organisational resources Assigns tasks and responsibilities associated with individual jobs
  • 5. Malaysian Institute of Aviation Technology 5 Organisational structure The formal framework by which job tasks are divided, grouped and coordinated Organisational Design The developing or changing of organisation’s structure 6 key elements of Organisational Designs • Work specialisation • Departmentalisation • Chain of command • Span of control • Centralisation and decentralisation • Formalisation
  • 6. Malaysian Institute of Aviation Technology 6 Work specialisation: The degree to which tasks in an organisation are divided into separate jobs, also known as division of labour. Departmentalisation: The basis by which jobs are grouped together. Functional Departmentalisation: Grouping jobs by functions performed. Product Departmentalisation: Grouping jobs by product line. Geographic Departmentalisation: Grouping jobs on the basis of territory or geography
  • 7. Malaysian Institute of Aviation Technology 7 Process Departmentalisation: Grouping jobs on the basis of product or customer flow. Customer Departmentalisation: Grouping jobs on the basis of common customers. Cross Functional Team: A group of individuals who are experts in various specialties (job functions) and who work together.
  • 8. Malaysian Institute of Aviation Technology 8 Chain of Command: A continuous line of authority that extends from the upper levels of the organisation to the lowest levels and clarifies who reports to whom. Authority: The rights inherent in a managerial position to tell people what to do and to expect them to do it. Responsibility: The obligation to perform any assigned duties. Unity of command: The management principle that each person should report to only one manager.
  • 9. Malaysian Institute of Aviation Technology 9 Span of Control: The number of employees a manager can efficiently and effectively manage.
  • 10. Malaysian Institute of Aviation Technology 10 Centralisation: The degree to which decision making is concentrated at a single point in the organisation. Decentralisation: The degree to which lower level employees provide input or actually make decision.
  • 11. Malaysian Institute of Aviation Technology 11 Factors that Influence the amount of Centralisation and Decentralisation: • More centralisation – Environment is stable. – Lower level managers are not capable or experienced at making decisions as upper level managers. – Lower level managers do not want to have a say in decisions. – Decisions are significant. – Organisation is facing a crisis or the risk of company failures. – Company is large. – Effective implementation of company strategies depends on managers retaining a say over what happens. • More Decentralisation. – Environment is complex, uncertain. – Lower level managers are capable and experienced at making decisions. – Lower level managers want a voice in decisions. – Decisions are relatively minor. – Corporate culture is open to allowing managers to have a say in what happens. – Company is geographically dispersed. – Effective implementation of company strategies depends on managers having involvement and the flexibility to make decisions.
  • 12. Malaysian Institute of Aviation Technology 12 Formalisation: The degree to which jobs within the organisation are standardised and the extent to which employee behaviour is guided by rules and procedures. Formalisation: The degree to which jobs within the organisation are standardised and the extent to which employee behaviour is guided by rules and procedures.
  • 13. Malaysian Institute of Aviation Technology 13 • Mechanistic Organisation: – An organisational design that is rigid and tightly controlled. • Organic Organisation: – An organisational design that is highly adaptive and flexible. • Mechanistic: • High specialisation. • Rigid depatmentalisation. • Clear chain of command. • Narrow spans of control. • Centralisation. • High formalisation. • Organic. • Cross functional teams. • Cross hierarchical teams. • Free flow of information. • Wide spans of control. • Decentralisation. • Low formalisation. Organization design decisions (con’t)
  • 14. Malaysian Institute of Aviation Technology 14 Organisational Design Decisions Contingency Factors • Strategy & Structure • Size and structure • Technology and structure • Environmental uncertainty and structure depends on certain...
  • 15. Malaysian Institute of Aviation Technology 15 • Traditional Organisational Designs. – Simple structure. • An organisational design with low Departmentalisation, wide spans of control, centralised authority and little Formalisation. – Functional structure. • An organisational structure that groups similar or related occupational specialties together. – Divisional structure. • An organisational structure made up of separate, semi autonomous units or divisions. Common organization designs
  • 16. Malaysian Institute of Aviation Technology 16 Strength and Weaknesses Traditional Organisational Designs. Strengths. • Simple structure: – Fast, flexible, inexpensive to maintain. – Clear accountability. • Functional structure: – Cost saving advantages from specialisation (economies of scale, minimal duplication of people and equipments) – Employees are grouped with others who have similar tasks. • Divisional structure: – Focuses on results. Divisional managers are responsible for what happens to their products and services. Weaknesses. • Simple Structure: – Not appropriate as organisation grows. – Reliance on one person is risky. • Functional structure: – Pursuit of functional goals can cause managers to lose sight of what’s best for overall organisation. – Functional specialists become insulated and have little understanding of what other units are doing. • Divisional structure: – Duplication of activitis and resources increases costs and reduces efficiency.
  • 17. Malaysian Institute of Aviation Technology 17 • Contemporary Organisational Designs. – Team based structure: • An organisational structure in which the entire organisation is made of work groups or teams. – Project structure: • An organisational structure in which employees are permanently assigned to project. – Matrix Structure: • An organisational structure that assigns specialists from different functional departments to work on one or more project.
  • 18. Malaysian Institute of Aviation Technology 18 • Contemporary Organisational Designs (con’t). – Autonomous internal units: • Separate decentralised business units, each with its own products, clients, competitors and profit goals. – Boundary less organisation: • An organisation whose design is not defined by, or limited to, the horizontal, vertical or external boundaries imposed by a predefined structure. • To minimise or eliminate these boundaries managers might use virtual, network or modular organization structure – Learning Organisation: • An organisational that has developed the capacity to continuously adapt and change because all members take an active role in identifying and resolving work related issues.
  • 19. Malaysian Institute of Aviation Technology 19 Learning Organisation Organisation Design: • Boundary less. • Teams. • Empowerment. Leadership: • Shared vision. • Collaboration. Organisational culture: • Strong mutual relationship. • Sense of community. • Caring. • Trust. Information sharing: • Open. • Timely. • Accurate. Characteristics of a learning organization
  • 20. Malaysian Institute of Aviation Technology END THANK YOU 20
  • 21. Malaysian Institute of Aviation Technology 21 • Reading Assignment. • Article : TOYO Australia Team Based Organisation. • Prepare for discussion on the 18th March 2009 class.

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