This document discusses different types of organizational structures including departmentation by numbers, time, enterprise function, geography, product, process and equipment. It also discusses matrix organizations, problems with matrix management, and guidelines to make matrix management effective. Finally, it defines strategic business units as distinct units within a large company that promote products like independent businesses.

1. A Presentation On
Organizational Structure:
Departmentation

3. Departmentation by simple numbers:
Definition:
Grouping of activities based on numbers.
 Reasons of the decline of departmentation:
1. Technology has advanced
2. Groups composed of specialized personnel are more efficient.
3. It is used only at the lowest level of the organization structure.

4. Departmentation by Time:
Grouping of activities based on the basis of time.
Advantages: Disadvantages:
 Services can be rendered
efficiently.
It is useful to a continuing
cycle.
It ensures the fullest uses of
equipment.
 Lacking of supervision.
 Creating problems in coordination.
 Increase the cost of the product.

5. Departmentation by enterprise function:
Grouping activities in accordance with the
function of an enterprise.
Advantages: Disadvantages:
1. Logical reflection of function.
.
2. Maintains power and
prestige of major functions
3. Follows principle of occupational
specialization.
1. Reduces coordination between
functions. .
2.Responsibility of profits is at top
level.
3. Slow adaptation to changes in
environment.

6. Departmentation by enterprise function:

7. Department by Geography:
Grouping of activity based on geography.
Advantages: Disadvantages:
Places responsibility at a lower
level.
Emphasis on local market.
Improve coordination in region.
Better face to face communication
.
Requires more persons with general
manager abilities.
Duplication of service.
Problem of top management control .

8. Department by Geography:

9. Customer Departmentation:
Grouping of activity based on customer.
Advantages: Disadvantages:
.
Concentrates on customer.
Develops expertness in
customer area.
Difficult to cope up with
competitive customer demand .
Requires managers and staff
expert in customer problem
 Customer groups may not
always defined.

10. Customer Departmentation:

11. Group of activities around a
process or type of equipment used.
Department by Process and Equipment:

12. The grouping of activities around product or product line.
Department by Product:
Advantages: Disadvantages:
.Achieves economic advantage.
 Uses specialized technology.
Utilizes special skills.
Simplifies training.
Coordination of department is
difficult.
Responsibility is at top.
 Unsuitable for developing
general manager.

13. Department by Product:

14. Matrix Organization:
Matrix organization normally is the combining of functional and project or
product patterns of departmentation in the same organization structure.
Mainly applied in:
1. Constructions;
2. Aerospace;
3. Marketing;
4. Installation of an electronic data processing system;
5. Management consulting firms etc.

15. Matrix Organization:

16. Matrix Organization:

17. Advantages: Disadvantages:
1. Is oriented toward end results;
2. Professional identification is
maintained;
3. Pinpoints product- profit
responsibility.
1.Conflict in organization authority
exists;
2.Possibility of disunity of
command exists;
3. Requires manage effective in
human relations.
Matrix Organization:

18. 1. A state of conflict exists between functional and project managers, as both complete for limited
resources (for example, financial and human). Moreover, members of the project team may
encounter role ambiguity;
2. Role conflict, role ambiguity, and role overload may result in stress for the functional and
project managers as well as for the team members;
3. An imbalance of authority and power, as well as horizontal and vertical influence of the project
and functional managers, can also lead to problems in matrix organizations
4. Because of the potential conflicts, managers may want to protect themselves against blame by
putting everything in writing, which increases administration costs.
5. Matrix organization requires many time-consuming meetings.
Problems with matrix management:

19. Guidelines for making Matrix Management Effective:
1. Define the objectives of the project or task;
2. Clarify the role, authority, and responsibilities of managers and team members.;
3. Ensure that influence is based on knowledge and information, rather than on rank;
4. Balance the power of functional and project managers;
5. Select an experienced manager for the project who can provide leadership;
6. Undertake organization and team development;
7. Reward project managers and team members fairly etc.

20. Strategic business units are distinct little businesses set up as units in a large company to
ensure that a certain product or product line is promoted and handled as though it were an
independent business.
Strategic Business Units:
1. Have its own mission, distinct from the mission of other SBUs;
2. Have definable groups of competitors;
3. Prepare its own integrative plans, fairly distinct from those of other SBUs;
4. Manage its resources in key areas;
5. Have proper size-neither too large nor too small etc.
Specific criteria to become SBUs:

21. Strategic Business Units: