Organizational behaviour and types of organizational structures

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Organizational behavior - Different types of organizational structures

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Organizational behaviour and types of organizational structures

  1. 1. Study Text – Organizational behavior Learning outcome 1 SAVINDRI SENEVIRATNE 1 Organizational Behavior - Lecture 01 8/12/2013
  2. 2. What is an Organization?  A social unit of people that is structured and managed to meet a need or to pursue collective goals.  All organizations have a management structure that determines relationships between the different activities and the members, and subdivides and assigns roles, responsibilities, and authority to carry out different tasks.  Organizations are open systems, which means they affect and are affected by their environment. 2 Organizational Behavior - Lecture 01 8/12/2013
  3. 3. Therefore… What is an Organization? Definition: 1. Social entity 2. Goal directed 3. Designed as deliberately structured and coordinated activity systems 4. Linked to the external environment 3 Organizational Behavior - Lecture 01 8/12/2013
  4. 4. Importance of Organizations  Bring together resources to achieve desired goals and outcomes  Produce goods and services efficiently  Facilitate innovation  Use modern manufacturing and computer based technology 4 Organizational Behavior - Lecture 01 8/12/2013
  5. 5. Importance of Organizations (Contd…)  Adapt to and influence a changing environment  Create value for owners, customers and employees  Accommodate ongoing challenges of diversity, ethics, and the motivation and coordination of employees 5 Organizational Behavior - Lecture 01 8/12/2013
  6. 6.  An organization has it’s own 1. 2. 3. 4. 5. 6. 6 Environment Goals and Strategies Size Technology Culture Structure Organizational Behavior - Lecture 01 8/12/2013
  7. 7. 7 Organizational Behavior - Lecture 01 8/12/2013
  8. 8.  Different Types of Organizational Structure  An organizational structure is used by businesses to provide an overall hierarchy and reporting structure for each job within the organization, and defines how an organization will operate to meet its goals.  one of several basic types of organizational structure can provide a platform to allow for future growth without making extensive changes to job responsibilities, the management structure or financial budgets for each area. 8 Organizational Behavior - Lecture 01 8/12/2013
  9. 9. Departmental  For business with several distinct departments, an organizational structure that defines each department may work well to allow for future growth.  This is considered the one of the most basic organizational structures, and in most cases, each department has one executive overseeing the operations of that department.  As one or several departments expand, it allows the organization to include additional jobs or promote employees to new supervisory roles within the department, without reorganizing or expanding the entire structure of the organization. 9 Organizational Behavior - Lecture 01 8/12/2013
  10. 10. 10 Functional  If an organization is less departmentalized, such as a small business with fewer than 100 employees, a functional organizational structure may be suitable for the business.  This type of structure arranges the organization based on each employee's roles and responsibilities, providing a hierarchy based on each job description.  As employees take on additional responsibilities and become more knowledgeable of the organization's goals, this allows the organization to promote those employees by increasing their salary or changing the job description with Organizational Behavior - Lecture 01 additional responsibilities, as well as titling the job 8/12/2013 as a senior role.
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  13. 13. 13 Geography  Even small businesses may have satellite offices nationally or internationally with specific goals in each of those geographical areas.  A geographical organizational structure may be suitable for this type of business.  This allows the organization to designate job titles, responsibilities and a hierarchy based on the needs of each location.  This allows for oversight by an executive at each regional location based on local market trends and profitability.  This type of structure allows the organization to quickly increase or discontinue services within a Organizational Behavior - Lecture 01 8/12/2013 specific area without affecting the entire
  14. 14. 14 Business Unit  For small businesses who work in different industries or markets, the organizational structure can be broken down by each business unit.  This type of structure is often based on profitability for each unit.  Like a departmental structure, each business unit is overseen by an executive who directs all operations.  Although all business units may be successful, some may grow faster than others due to industry or market trends.  This allows for restructuring in one business unit that may be growing rapidly or decline without Organizational Behavior - Lecture 01 8/12/2013 affecting other business units in the organization.
  15. 15. Matrix  Matrix structure, is a hybrid of divisional and functional structure.  Typically used in large multinational companies, the matrix structure allows for the benefits of functional and divisional structures to exist in one organization.  This can create power struggles because most areas of the company will have a dual management--a functional manager and a product or divisional manager working at the same level and covering some of the same managerial territory. 15 Organizational Behavior - Lecture 01 8/12/2013
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  18. 18. Divisional Structure  Divisional structure typically is used in larger companies that operate in a wide geographic area or that have separate smaller organizations within the umbrella group to cover different types of products or market areas.  For example, “A” Company was organized divisionally--with a small engine division, a compressor division, a parts division and divisions for each geographic area to handle specific needs. 18 Organizational Behavior - Lecture 01 8/12/2013
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