What is organization?• Basically, an organization in itssimplest form ,is a person or group ofpeople intentionally organized toaccomplish an overall, common goal orset of goals.
What is a structure?ACC. TO KAST ANDROSENZWEIG,“STRUCTURE IS THEESTABLISHED PATTERN OFRELATIONSHIPS AMONG THECOMPONENT PARTS OF THEORGANIZATION.”
What is Organizationalstructure?• Organizational structure determinesthe manner and extent towhich roles, power,and responsibilities are delegated,controlled, and coordinated, andhow information flows between levelsof management.• An structure depends entirely onthe organizations objectives andthe strategy chosen to achieve them.
Types of organisation›TRADITIONALSTRUCTURE1.LINE STRUCTURE2.FUNCTIONALSTRUCTURE3.LINE & STAFFSTRUCTURE› MODERNSTRUCTURE1. PROJECT STRUCTURE2.MATRIX STRUCTURE
Line StructureLine Structure is the OLDEST and SIMPLESTform of INTERNAL ORGANIZATIONSTRUCTURE. It was first developed by theROMAN ARMY and the latter adopted byARMIES all over the world. Factory owners alsoused LINE ORGANIZATION in its purest formin the NINETEENTH CENTURY IN ENGLAND.In LINE ORGANIZATION, top management hascomplete control and the CHAIN of COMMANDis clear and simple. MANAGEMENT has completecontrol.
Advantages SIMPLICITY DISCIPLINE ECONOMICAL STRICT CONTROLS FLEXIBILITY HIGH MORAL
Line and Staff OrganizationACCORDING TO LOUIS ALLEN,“LINE REFERS TO THOSEPOSITIONS AND ELEMENTS OF AN ORGANIZATION,WHICH HAVE THE RESPOSIBILITY AND AUTHORITY ANDARE ACCOUNTABLE FOR ACCOMPLISHMENT OF PRIMARYOBJECTIVES. STAFF ELEMENTS ARE THOSE WHICHHAVE RESPONSIBILITY AND AUTHORITY FORPROVIDING ADVICE AND SERVICE TO THE LINE INATTAINMENT OF OBJECTIVES.”
Advantages LESS BURDEN ON EXECUTIVES SERVICES OF EXPERTS AVAILABLE LIMITED TENSION ON LINE MANAGERS BENEFITS OF SPECIALIZATION TRAINING OPPURTUNITIES TO EMPLOYEES FLEXIBILITY
Limitations DELAY IN DECISION-MAKING BUCK PASSING AMONG EXECUTIVES CONFLICTS BETWEEN LINE AND STAFF EXECUTIVES COSTLY ORGANIZATION COMPLICATED IN OPERATION DISCIPLINE IS AFFECTED
Reasons for conflicts between lineand staffARGUMENTS OF LINEEXECUTIVES AGAINSTSTAFF DILUTION OF AUTHORITY LACKS PRACTICAL KNOWLEDGE LACKS HUMAN SKILLS DOMINATION OF STAFFMANAGERS STRESS ON PAPERWORKARGUMENTS OF STAFFEXECUTIVES AGAINSTLINE RESISTANCE TO NEW PLANSAND IDEAS INADEQUATE SUPPORT FROMLINE EXECUTIVES LIMITED COOPOERATION FROMLINE EXECUTIVES SUPPLY OF INADEQUATEINFORMATION
Solutions for resolving theconflicts RELATIONSHIP SHOULD BE NOTED IN WRITING CLEAR UNDERSTANDING OF STAFF ROLE FREQUENT MEETINGS SELECTION OF COMPETENT STAFF STAFF SHOULD BE TREATED AS TEAM MEMBERS OFTHE GROUP QUICK SETTLEMENT OF CONFLICTS
Project StructureTHE TERM PROJECT REFERS TO A UNIQUE ANDCOMPLEX CLUSTER OF ACTIVITIES TO BE COMPLETEDWITHIN FIXED TIME AND COST. THEY ARE DISSOLVEDONCE THE GOAL IS ACHIEVED. EG- THE GOAL MAY BETO CONSTRUCT A NEW RAILWAY BRIDGE.SPECIALISTS FROM DIFFERENT FUNCTIONALDEPARTMENTS ARE BROUGHT TOGETHER TO WORK INHARMONY. THE FUNCTIONAL DEPARTMENT MAY BEPRODUCTION, ENGINEERING, QUALITY CONTROL,PRODUCT ANALYSIS, ETC. WHEN THE PROJECT ISCOMPLETED, THESE SPECIALISTS RETURN TO THERESPECTED DEPARTMENTS
Usesa) OBJECTIVESb) TIME-BOUNDc) UNRELATED WITH DAILY ADMINISTRATIVE WORKd) IN NEED OF SPECIALISED SKILLSe) ITS TEMPORARY
Limitations CONFLICTS IN APPROACH LACKS CLARIFY OF ROLES CONFLICTS BETWEEN DEPARTMENTS UNCERATIN FUTURE LACKS CLEARITY OF COMMANDS
Functional organizationalstructure• Employees are grouped togetheraccording to their similar tasks, skillsor activities. Functional structuresare suitable for SMEs with high levelof specialization.The decision making is centralized atthe top of the organization.
Benefits of functionalorganizational structure• Efficient use of resources;• In-depth skill development;• Clear career paths;• Strategic decisions are made onthe top of the organization.
Disadvantages offunctional design• Slow decision making• Less innovative.• Performance responsibility is unclear;• Limited management training.• Poor coordination across functions.
Matrix Organization• Matrix Organization was introduced in USA in the early1960s. It was used to solve management problems in theAerospace industry.• Matrix Organization is a combination of two or moreorganization structures. For example, FunctionalOrganization and Project Organization.• The organization is divided into different functions, e.g.Purchase, Production, R & D, etc. Each function has aFunctional (Departmental) Manager, e.g. PurchaseManager, Production Manager, etc.• The organization is also divided on the basis of projectse.g. Project A, Project B, etc. Each project has aProject Manager e.g. Project A Manager, Project BManager, etc.
• The employees has to work, under two authority(bosses). The authority of functional manager flowsdownwards while the authority of project manager flowsacross (sideward). So the authority flows downwards andacross. Therefore, it is called “MATRIXORGANISATION”.
Matrix design• It implements functional and divisional structuressimultaneously in each department.• The worker in each department is being supervised by twobosses at the same time.• It is suitable for the following situations:- Environmental pressure exists for a dual focus;- Large amount of information needs to be processed;- Innovations are performed- Organization is working on several projects together.- Efficiency is needed in the use of resources.
Strengths of matrixdesign• Provides flexibility;• Encourages resource efficiency;• Enhances skill development;• Increase motivation and commitment;• Helps top management in planningprocess.
Weaknesses of matrixdesign• Creates dual authority confusion;• Is time consuming;• Generates high implementation cost;• Requires interpersonal skill training;• Spawns power struggle.