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  1. 1. The Organizational System  Organizational Structure  Organizational Designs
  2. 2. What is Structure? The degree of complexity, formalization and centralization in the organization. Complexity is the degree of vertical, horizontal and spatial differentiation in an organization Formalization is the degree to which jobs within the organization are standardized. Centralization is the degree to which decision making in concentrated at a single point in the organization
  3. 3. Classical View of Structure Division of Labour – Specialization; breaking jobs down into simple and repetitions tasks Unity of Command – a subordinate should have only one superior to whom he or she is directly responsible. Responsibility - an obligation to perform Line Authority – authority to direct the work of a subordinate
  4. 4. Classical View of Structure…… Chain of Command – the superior-subordinate authority chain that extends from the top of the organization to the lowest echelon Staff Authority – positions that support, assist and advise line managers Span of Control – the number of subordinates a manger can efficiently and effectively divert Departmentation: grouping of activities on some common basis
  5. 5. Departmentation by Function Plant Manager Manger Manager Manger Manger ManagerEngineering Accounts Manufacturing Personal Purchase
  6. 6. Departmentalization by Product President VP VPVP (Fuels) (Lubricants & Waxes) (chemicals) Marketing Planning Supply & distribution Manufacturing
  7. 7. Departmentalization by Customer ManagerLoans FEX SA TDR
  8. 8. Departmentalization by Geography VP (Sales) Sales Manager Sales Manager Sales Manager Sales ManagerWestern Region Southern Region Northern Region Eastern Region
  9. 9. Departmentalization by Process Plant Manager Inspectio packing Cast Press Tube Finishing &Department Department Department Department ShippinManager Manager Manager Manager Dept Manage
  10. 10. The coming of the New Organization Rapid and unexpected change Increasing diversity Change in managerial behaviour Adoption to computer technology
  11. 11. The Mechanistic Structure
  12. 12. The Mechanistic Structure…… High horizontal differentiation Rigid hierarchical relationships Fixed duties High formalization Formalized communication channels Centralized decision authority
  13. 13. The Organic Structure
  14. 14. The Organic Structure….. Low horizontal differentiation Collaboration (both horizontal and vertical) Adaptable duties Low formalization Informal communication Decentralized decision authority
  15. 15. Why do Structures Differ? Strategy Strategy Structural Option Innovation Organic: loose structures; low division of labour, low formalization, decentralized. Cost Mechanistic: tight control; extensive minimizatio division of labour, high formalization, n high centralization. Initiation Mechanistic and Organic: mix of loose and tight properties; tight controls for current activities, loose controls for newer undertakings.
  16. 16. Why do Structures Differ?..... Size  Increase in the number of employees results in • High complexity • High formalization • decentralization
  17. 17. Why do Structures Differ?....  Technology Unit Mass Process Production Production ProductionStructural Low vertical Moderate High verticalcharacteristic differentiation vertical differentiation Low horizontal differentiation Lows differentiation High horizontal Low horizontal differentiation formalization differentiation Low High formalization formalizationMost Organic Mechanistic Organiceffective
  18. 18. Technology… Task variability Few Exceptions Many Exceptions Well-defined Routine Engineering Problem 1 2Analyzability 3 4 Craft Non routine Ill-defined
  19. 19. Technology…Input A B C D Output A. Long-linked Technology Transformational Client A Process Client B B. Mediating Technology Resources A B Transformational C Output Process D Feedback C. Intensive Technology
  20. 20. Why do Structures Differ?..... StableEnvironment Abundant simple Complex Scarce Dynamic Three Dimensional Model of the Environment
  21. 21. Why do Structures Differ?... Power control  An organization structure is the result of power struggle by internal constituencies who are seeking to further their interests
  22. 22. Mintzberg`s five design configurations The operating core: Employees who perform the basic work related to the production of products and services The strategic apex: Top level managers who are charged with the overall responsibility of the organization The middle level: Managers who connect the operating core to the strategic apex The technosturcture: Analysts who have the responsibility for effecting certain forms of standardization in the organization The support staff: People who fill the staff units, who provide indirect services for the organization
  23. 23. Basic Elements
  24. 24. Basic Subunits SubunitExamplepositions from a manufacturing firm. Strategic Apex: Board of Directors, Chief Executive Officer Techno structure: Strategic Planning, Personnel Training, Operations Research, Systems Analysis and Design Support Staff: Legal Counsel, Public Relations, Payroll, Mailroom Clerks, Cafeteria Workers Middle Line: VP Operations, VP Marketing, Plant Managers Sales Managers Operating Core: Purchasing Agents, Machine Operators, Assemblers, Sales Persons, Shippers
  25. 25. The Simple Structure Low complexity Low formalization Centralized authority
  26. 26. The Machine Bureaucracy High in complexity, formalization and centralization Key part is technostructure
  27. 27. The Professional Bureaucracy Highin complexity, formalization Low centralization
  28. 28. The Divisional StructureA set of autonomous units coordinated by central headquarters
  29. 29. The AdhocracyA structure characterized as low in complexity, formalization centralization
  30. 30. The Matrix Structure Programs Under Master’ Ph.D. Researc Executive CommunitAcademic graduate s h programs y servicedepartments programsAccountingAdministrative StudiesEconomicsFinanceMarketing Matrix Structure for a College of Business Administration