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Organization structure & IT
The document discusses different types of organizational structures including functional, divisional, matrix, network, and team structures. It provides details on the key characteristics of each structure and examples of companies that use each type. Functional structures divide the organization by functions while divisional structures divide by product, service, or geography. Matrix structures combine functional and divisional approaches. Network structures are less hierarchical and more decentralized and flexible. Team structures define small businesses and use horizontal and vertical teams.
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Organization structure & IT
- 1. Organization Structure &IT -Harnoor Singh
- 2. The organizational structureof an organization tells you the character of an organization and the values it believes in. Organizational structure is a pattern or arrangement of jobs and groups of jobs within an organization.
- 3. A social unitof people, systematically structured and managed to meet a need or to pursue collective goals on a continuing basis. Definition
- 4. Six key elements •Work specialization • Departmentalization • Chain of command • Span of control • Centralization and decentralization • Formalization
- 5. Types of OrganizationalStructure • Functional • Divisional • Matrix • Network • Team
- 6. Functional • The organizationis divided into segments based on the functions when managing. • Advantage: Successful in large organization that produces high volumes of products at low costs. • Disadvantage: Communication between the functional groups is not effective then, organization may find it difficult to achieve some organizational objectives at the end.
- 7. Divisional • Organizations dividethe functional areas of the organization to divisions. Each division is equipped with its own resources in order to function independently. • Divisions can be defined based on the geographical basis, products/services basis, or any other measurement. • Example: General Electrics. It can have microwave division, turbine division, etc., and these divisions have their own marketing teams, finance teams, etc.
- 8. Matrix • When itcomes to matrix structure, the organization places the employees based on the function and the product. • The matrix structure gives the best of the both worlds of functional and divisional structures. • The company uses teams to complete tasks • The teams are formed based on the functions they belong to and product they are involved in
- 9. Network • The networkstructure is a newer type of organizational structure viewed as less hierarchical (i.e., more "flat"), more decentralized, and more flexible than other structures. • In a network structure, managers coordinate and control relationships that are both internal and external to the firm. • The concept underlying the network structure is the social network—a social structure of interactions. Open communication and reliable partners (both internally and externally) are key components of social networks. • Disadvantage: More fluid structure can lead to more complex relations in the organization.
- 10. Team • Newest organizationalstructures developed in the 20th century is team and the related concept of team development or team building. • In small businesses, the team structure can define the entire organization. Teams can be both horizontal and vertical. • While an organization is constituted as a set of people who synergize individual competencies to achieve newer dimensions, the quality of organizational structure revolves around the competencies of teams in totality • Used by:- Xerox, Motorola, and DaimlerChrysler
- 11. Other Structures • Virtualorganization is defined as being closely coupled upstream with its suppliers and downstream with its customers such that where one begins and the other ends means little to those who manage the business processes within the entire organization. • The virtual organization exists within a network of alliances, using the Internet. This means while the core of the organization can be small but still the company can operate globally be a market leader in its niche. • According to Anderson, because of the unlimited shelf space of the Web, the cost of reaching niche goods is falling dramatically. Although none sell in huge numbers, there are so many niche products that collectively they make a significant profit, and that is what made highly innovative Amazon.com so successful
- 12. Bureaucratic Structures • Bureaucraticstructures maintain strict hierarchies when it comes to people management. There are three types of bureaucratic structures: • 1 - Pre-bureaucratic structures This type of organizations lacks the standards. Usually this type of structure can be observed in small scale, start-up companies. Usually the structure is centralized and there is only one key decision maker. • The communication is done in one-on-one conversations. This type of structures is quite helpful for small organizations due to the fact that the founder has the full control over all the decisions and operations. • 2 - Bureaucratic structures These structures have a certain degree of standardization. When the organizations grow complex and large, bureaucratic structures are required for management. These structures are quite suitable for tall organizations. • 3 - Post-bureaucratic Structures The organizations that follow post- bureaucratic structures still inherit the strict hierarchies, but open to more modern ideas and methodologies. They follow techniques such as total quality management (TQM), culture management, etc.
Editor's Notes
- #5 Summary Organizational structure defines how job tasks are formally divided, grouped, and coordinated. Work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization are components which determine organizational structure. Work specialization or division of labour is the degree to which activities in the organization are subdivided into separate jobs. Work specialization creates efficiency and productivity, but can also result in boredom, fatigue, stress, low productivity, poor quality, increased absenteeism, and high turnover. The trend towards specialization has been altered by the realization that productivity may be increased by enlarging the scope of job activities. Departmentalization is the basis by which jobs are grouped together. Organizations may be departmentalized by function, product, geography, process, or customer. Functional departmentalization groups activities by the functions performed, such as engineering, accounting, or personnel. Organizations using product departmentalization have separate departments or divisions devoted to a product or product line. Many sales and retail operations are departmentalized by geography or territory. In process departmentalization, each department specializes in a specific phase of the production process. Finally, customer departmentalization organizes along customer markets. Many large organizations use all of the forms of departmentalization. The chain of command is an unbroken line of authority that extends from the top of the organization to the lowest level and clarifies who reports to whom. The concept of chain of command is related to the concepts of authority and unity-of-command. Authority refers to the right of a manager to give orders and expect them to be obeyed. The unity-of-command principle states that a person should have only one supervisor to whom he or she is directly responsible. Span of control refers to the number of employees that can be directed by one manager. Narrow spans of control allow for close control, while wider spans of control reduce costs, speed up decision making, increase flexibility, and empower employees. The ideal span of control will depend upon the situation. Centralization is the degree to which decision making is concentrated at a single point in the organization. In a centralized organization, top management makes the key decisions with little or no input from lower-level personnel. In contrast, decentralized organizations allow lower-level personnel or provide input or actually make decisions. The recent trend has been towards decentralization. Finally, formalization refers to the degree to which jobs within the organization are standardized. If a job is highly formalized, individual employees have a minimum amount of discretion over what is to be done, when it is to be done, or how it is to be done. The degree of formalization can vary widely between organizations and within organizations.
- #7 Advantage: The low cost can be achieved by such companies due to the efficiencies within functional groups.
- #8 . In that sense, each division can be considered as a micro-company with the main organization
- #10 Proponents argue that the network structure is more agile than other structures. Because it is decentralized, a network organization has fewer tiers, a wider span of control, and a bottom-up flow of decision making and ideas.
- #12 A special form of boundary less organization is virtual. Hedberg, Dahlgren, Hansson, and Olve (1999) consider the virtual organization as not physically existing as such, but enabled by software to exist.