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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 exec utive s 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 other s 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 .


  • 1. S.Chandramouli – MBA Dept
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    • 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.
    • 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
    • continuity
    S.Chandramouli - MBA Dept.
  • 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.
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  • 8. S.Chandramouli - MBA Dept.
  • 9.
    • Authority & responsibility relationships between various positions in the organization by showing who reports to whom.
    • Clear-cut authority relationships
    • Pattern of communication
    • Location of decision centres
    • Proper balancing
    • Stimulation creativity
    • Encouraging growth
    S.Chandramouli - MBA Dept.
  • 10. S.Chandramouli - MBA Dept.
  • 11.  
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    • 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.
  • 13. S.Chandramouli - MBA Dept.
  • 14. Hierarchical S.Chandramouli - MBA Dept.
  • 15. FUNCTIONAL ORGANIZATION S.Chandramouli - MBA Dept.
  • 16. S.Chandramouli - MBA Dept.
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  • 20. 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
  • 21.