Organizational structure & design

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  • Function first followed by product, then country attention usual for extractive industries (mining and oil) or where the firm is transporting products and raw materials from one geographic area to another.
    ADVANTAGES:
    High professional identity
    High external and internal specialization
    Ease of supervision and assessment; tight centralized control
    Limited duplication of resources; relatively lean managerial staff
    DISADVANTAGES:
    Encourages group differences and fiefdoms
    Putting products and marketing in different departments makes it difficult to manage multiple product lines
    Specialist skills may self-perpetuate and drive out new ideas or new ways
    Responsibility is sometimes elusive
    Limited training for developing senior executives who need to be generalists
  • ADVANTAGES:
    Targets inherent differences
    Better accountability for performance
    Clarifies goals
    Moves decision making downward
    Simplifies intraunit coordination
    DISADVANTAGES:
    Duplicates and can be costly
    May lead to suboptimal decisions
    Clarifies opposition
    May induce reliance on bad decisions others make
    Increase interunit competition
  • Advantages
    useful when teams are needed to innovate;
    when information sharing is important.
    Disadvantages
    people report to two or more bosses;
    increases structural complexity;
    can make it harder to work toward common goals.
  • Here’s another type of hybrid; you can see they had the Chair and CEO working at an equal level with the COO, although Chair and Vice Chair tell us who makes the final decision. Then reporting to both are various VPs for functions, areas, and products.
  • Organizational structure & design

    1. 1. S.Chandramouli – MBA Dept
    2. 2. Identifiable group of people contributing their efforts towards the attainment of goals. A Group of people united by a common purpose S.Chandramouli - MBA Dept.
    3. 3.  Consideration of objectives  Division of work and specialization  Definition of jobs  Separation of line and staff functions  Chain of command  Parity of authority & responsibility  Unity of command  span of supervision  Balance of various factors  Communication  Flexibility S.Chandramouli - MBA Dept.
    4. 4. Organization based on Functions • Economic • Political • Integrative • Pattern maintenance Organization based on services • Mutual benefit • Business organization • Service organization Organization based on Authority & Responsibility Formal Informal S.Chandramouli - MBA Dept.
    5. 5. V P M a rketin g V P F in a n ce C ou n try A C o u n try B P ro d u ct 1 P ro d u ct 2 P ro d u ct 3 V P O p era tion s V P R & D V P L e g a l issu es C E O
    6. 6. S.Chandramouli - MBA Dept.
    7. 7. Authority & responsibility relationships between various positions in the organization by showing who reports to whom. 1. Clear-cut authority relationships 2. Pattern of communication 3. Location of decision centres 4. Proper balancing 5. Stimulation creativity 6. Encouraging growth S.Chandramouli - MBA Dept.
    8. 8. S.Chandramouli - MBA Dept.
    9. 9. Diagrammatic presentation of the Organizational structure is what is known as organizational chart Chart that describes administrative and functional structures of an organization S.Chandramouli - MBA Dept.
    10. 10. S.Chandramouli - MBA Dept.
    11. 11. Hierarchical S.Chandramouli - MBA Dept.
    12. 12. FUNCTIONAL ORGANIZATION S.Chandramouli - MBA Dept.
    13. 13. S.Chandramouli - MBA Dept.
    14. 14. A d m in /F in a n c e V P fo r th e A m e ric a s V P E u ro p e V P E . A s ia M a rk e tin g O p e ra tio n s A u s tra lia /N Z In d o n e s ia Is la n d s V P A u s tra la s ia C E O
    15. 15. DIVISIONAL STRUCTURE (BY PRODUCT LINES) FRAGRANCES SKIN CARE PRODUCTS HAIR CARE PRODUCTS OTHER PRODUCTS COSMETICS CORPORATION
    16. 16. M a n a g e m e n t fin a n c in g p a rts s p o rts u tilitie s lig h t tru c k s a u to s S tra te g ic B u s in e s s u n its N . A m e ric a L a tin A m e ric a E u ro p e A s ia E x e c u tiv e C o m m itte e C h a irm a n o f th e B o a rd
    17. 17. Chair and CEO Vice Chair and COO General Secretary Exec VP, Finance Exec VP, Fresh Dairy Exec VP, Water Exec VP, Biscuits and Cereal Snacks Exec VP, Asia-Pacific Exec VP, Intl Strategy

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