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organization topic for MCA Class jan 2010

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  • i was unable to understand some of the organizational sturctures,,,but as i was declared tht this ppt will b discussed once again so no big issues
    But the concept of orgainization was represented very well in class
    or i should say in an organized manner
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  • I am unable 2 understand the following:-
    cognitive differentation, reciprocal interdependence,nd rules ,goals nd values chart...!!!!!
    Are you sure you want to  Yes  No
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  1. 1. Organizational Structure and Design
  2. 2. LEARNING OBJECTIVES <ul><li>Explain the concepts of organizational structure and design. </li></ul><ul><li>Explain the concepts of differentiation and integration and their role in organizational structure and design. </li></ul>
  3. 3. LEARNING OBJECTIVES <ul><li>Describe mechanisms used to achieve differentiation and integration and balance these two structural dimensions. </li></ul><ul><li>Identify the various structures used by organizations and describe their strengths and weaknesses. </li></ul>
  4. 4. LEARNING OBJECTIVES <ul><li>List the environmental factors that influence organizational structure. </li></ul><ul><li>Determine the appropriate organizational structure for a firm given a set of internal and external factors. </li></ul>
  5. 5. PRINCIPLES OF ORGANIZATIONAL STRUCTURE <ul><li>Organizational structure </li></ul><ul><ul><li>The sum of ways an organization divides its labor into distinct, coordinated tasks </li></ul></ul><ul><li>Organizational design </li></ul><ul><ul><li>Assessing the organization’s strategy and environmental demands </li></ul></ul><ul><ul><li>Determining the appropriate organizational structure </li></ul></ul>
  6. 6. PRINCIPLES OF ORGANIZATIONAL STRUCTURE <ul><li>Organizational charts </li></ul><ul><ul><li>Illustration of relationships </li></ul></ul><ul><ul><ul><li>Units </li></ul></ul></ul><ul><ul><ul><li>Lines of authority among supervisors and subordinates </li></ul></ul></ul><ul><ul><li>Illustrated by use of labeled boxes and connecting lines </li></ul></ul>
  7. 7. SUNCOR ENERGY ORGANIZATIONAL STRUCTURE Suncor Energy Organizational Structure Executive Vice President Oil Sands Executive Vice President Marketing and Refining Senior Vice President Major Projects Executive Vice President Natural Gas and Alternative Energy CEO
  8. 8. DIFFERENTIATION <ul><li>Differentiation </li></ul><ul><ul><li>Division of tasks into subtasks that are performed by individuals with specialized skills </li></ul></ul><ul><ul><li>Task differentiation </li></ul></ul><ul><ul><li>Cognitive differentiation </li></ul></ul>
  9. 9. INTEGRATION <ul><li>Integration </li></ul><ul><ul><li>Facilitation of cooperation and interaction of various parts of the organization </li></ul></ul><ul><ul><li>Interdependence </li></ul></ul><ul><ul><ul><li>Pooled </li></ul></ul></ul><ul><ul><ul><li>Sequential </li></ul></ul></ul><ul><ul><ul><li>Reciprocal </li></ul></ul></ul>
  10. 10. APPROPRIATENESS OF RULES, GOALS, VALUES Level of Appropriateness Level of Interdependence Level of Uncertainty Appropriateness of Rules, Goals, Values High Low Low High
  11. 11. FORMALIZATION <ul><li>Formalization </li></ul><ul><ul><li>the official and defined structures and systems in decision making, communication, and control in an organization </li></ul></ul><ul><ul><ul><li>Line of authority </li></ul></ul></ul><ul><ul><ul><li>Unity of command </li></ul></ul></ul><ul><ul><ul><li>Span of control </li></ul></ul></ul>
  12. 12. FACTORS THAT INFLUENCE THE SPAN OF CONTROL <ul><li>Job complexity —Jobs that are complicated require more managerial input and involvement and thus the span of control tends to be narrower. </li></ul><ul><li>Job similarity —If one manages a group of employees performing similar jobs, the span of control can be considerably wider than if the jobs of subordinates are substantially different. </li></ul><ul><li>Geographic proximity of supervised employees —Because employees who work in one location are more easily supervised than employees in dispersed locations, physical proximity to employees tends to allow a wider span of control. </li></ul><ul><li>Amount of coordination —A narrower span of control is advisable in firms where management expends much time coordinating tasks performed by subordinates. </li></ul>Factors that Influence the Span of Control
  13. 13. FACTORS THAT INFLUENCE THE SPAN OF CONTROL <ul><li>Abilities of employees —Supervisors who manage employees who are more knowledgeable and capable can have a wider span of control than supervisors managing less knowledgeable and capable employees. The greater the abilities of employees, the less managerial inputs are required and thus a wider span of control is possible. </li></ul><ul><li>Degree of employee empowerment —Because employees who are trusted and empowered to make decisions need less supervision than employees with less autonomy and decision-making discretion, supervisors who empower their employees can have a wider span of control. </li></ul><ul><li>Ability of management —More capable managers can manage more employees than less competent managers. The abilities of managers to educate employees and effectively respond to their questions lessen the need for a narrow span of control. </li></ul>Factors that Influence the Span of Control
  14. 14. FACTORS THAT INFLUENCE THE SPAN OF CONTROL <ul><li>Technology —Communication technology, such as mobile phones, fax, e-mail, workshare software, can allow managers to effectively supervise employees who are not geographically proximate, have complex and different jobs, and require significant coordination. </li></ul>Factors that Influence the Span of Control
  15. 15. EXHIBIT TALL AND FLAT ORGANIZATIONAL STRUCTURES Tall Organizational Structure Levels = 4 Span of Control = 3 Total Employees = 40 Tall and Flat Organization Structures
  16. 16. EXHIBIT TALL AND FLAT ORGANIZATIONAL STRUCTURES Tall Organizational Structure Flat Organizational Structure Tall and Flat Organization Structures Levels = 3 Span of Control = 7 Total Employees = 57
  17. 17. INFORMALIZATION <ul><li>Informal organization </li></ul><ul><ul><li>Unofficial but influential means of </li></ul></ul><ul><ul><ul><li>Communication </li></ul></ul></ul><ul><ul><ul><li>Decision making </li></ul></ul></ul><ul><ul><ul><li>Control </li></ul></ul></ul>
  18. 18. CENTRALIZATION AND DECENTRALIZATION <ul><li>Centralized organizations </li></ul><ul><ul><li>Restrict decision making to fewer individuals, usually at the top of the organization </li></ul></ul><ul><li>Decentralized organizations </li></ul><ul><ul><li>Tend to push decision-making authority down to the lowest level possible </li></ul></ul>
  19. 19. COMBINATIONS OF FORMAL/INFORMAL AND CENTRALIZED/DECENTRALIZED U. S. Military Philips Electronics Club Med Mitsubishi Combinations of Formal/Informal and Centralized/Decentralized Formal Informal Centralized Decentralized
  20. 20. FUNCTIONAL STRUCTURE Functional Structure CEO Vice President Marketing Vice President Sales Vice President Manufacturing Vice President Human Resources Market research Advertising Promotion East region South region West region Purchasing Operations Logistics Recruiting Training Compensation
  21. 21. FUNCTIONAL STRUCTURE <ul><li>Strengths </li></ul><ul><li>Small to medium-sized firms with limited product diversification </li></ul><ul><li>Specialization of functional knowledge </li></ul><ul><li>Less duplication of functional resources </li></ul><ul><li>Facilitates coordination within functional areas </li></ul><ul><li>Weaknesses </li></ul><ul><li>Weak coordination across functional groups </li></ul><ul><li>Restricted view of overall organizational goals </li></ul><ul><li>Limits customer attention </li></ul><ul><li>Slower response to market changes </li></ul><ul><li>Burdens chief executives with decisions </li></ul>
  22. 22. PRODUCT STRUCTURE Product Structure CEO Vice President Product A Vice President Product B Vice President Product C Vice President Product D Marketing Operations Sales Marketing Operations Sales Marketing Operations Sales Marketing Operations Sales
  23. 23. PRODUCT STRUCTURE <ul><li>Strengths </li></ul><ul><li>More focus on products and customers </li></ul><ul><li>Easier to evaluate performance of the product </li></ul><ul><li>Product responsiveness to market changes </li></ul><ul><li>Less burden on the top executive in making operating decisions </li></ul><ul><li>Weaknesses </li></ul><ul><li>Duplication and lack of economies of scale </li></ul><ul><li>Problems for customers purchasing across multiple product groups </li></ul><ul><li>Conflicts between product group and corporate objectives </li></ul><ul><li>Conflict between product groups </li></ul>
  24. 24. DIVISION STRUCTURE Division Structure CEO Vice President Medical systems Vice President Bioscience Vice President Clinical Anesthesia Hypodermic Infusion Labware Cell biology Immunology Vacutainer Diagnostics Consulting
  25. 25. DIVISION STRUCTURE <ul><li>Strengths </li></ul><ul><li>Reduced functional duplication </li></ul><ul><li>Customer focus can increase </li></ul><ul><li>Cross-product coordination is eased </li></ul><ul><li>Cross-regional coordination is often eased </li></ul><ul><li>Weaknesses </li></ul><ul><li>Most appropriate only for diversified, large companies with many products and product families </li></ul><ul><li>May inhibit cross-division coordination </li></ul><ul><li>Coordination difficulties between division and corporate objectives </li></ul>
  26. 26. CUSTOMER STRUCTURE Customer Structure CEO Vice President Retail Vice President Industrial Vice President Military Small Mid-size Domestic International Army Navy
  27. 27. CUSTOMER STRUCTURE <ul><li>Strengths </li></ul><ul><li>In-depth understanding of specific customers </li></ul><ul><li>Responsiveness to changes in customer preferences and needs </li></ul><ul><li>Responsiveness to moves by competitors to better serve customers </li></ul><ul><li>Weaknesses </li></ul><ul><li>Duplication of functional resources in each customer unit </li></ul><ul><li>Coordination between customer units and corporate objectives </li></ul><ul><li>Failure to leverage technology or other strengths in one unit across other units </li></ul>
  28. 28. GEOGRAPHICAL/REGIONAL STRUCTURE Geographical/Regional Structure <ul><li>Strengths: </li></ul><ul><li>Facilitates local responsiveness </li></ul><ul><li>Develops in depth knowledge of specific regions/countries </li></ul><ul><li>Creates accountability by region </li></ul><ul><li>Facilitates cross-functional coordination within regions </li></ul><ul><li>Weaknesses: </li></ul><ul><li>Often creates cross-regional coordination difficulties </li></ul><ul><li>Can inhibit ability to capture global scale economies </li></ul><ul><li>Duplicates resources and functions across regions </li></ul>Chief Executive Officer Vice President North America Vice President Europe Vice President Southeast Asia Vice President Latin America Vice President Africa
  29. 29. MATRIX STRUCTURE Matrix Structure Chief Executive Officer Health Beauty Cleaning Food NA AP EMEA LA
  30. 30. MATRIX STRUCTURE <ul><li>Strengths </li></ul><ul><li>Information flow </li></ul><ul><li>Decision quality </li></ul><ul><li>Suited to a changing and complicated business environment </li></ul><ul><li>Flexible use of human resources </li></ul><ul><li>Weaknesses </li></ul><ul><li>Complexity of performance evaluations </li></ul><ul><li>Inhibited ability to respond to changing conditions </li></ul><ul><li>Diffused accountability </li></ul><ul><li>Conflicts between differing perspectives and objectives </li></ul>
  31. 31. HYBRID STRUCTURES Hybrid Structure CEO Vice President Finance Vice President Human Resources Vice President Operations Vice President Product A Vice President Product B Auditing Accounting Treasury Recruiting Training Compensation Purchasing Manufacturing Logistics Retail Industrial Education Government
  32. 32. HYBRID STRUCTURES: CONTINUED Hybrid Structure CEO Vice President North America Vice President Latin America Asia Pacific Vice President EMEA Marketing Operations Sales Marketing Operations Sales Marketing Operations Sales Marketing Operations Sales
  33. 33. NETWORKED STRUCTURES <ul><li>Formal or informal relationships among units or organizations (along the firm’s value chain) </li></ul><ul><li>Outsourcing </li></ul><ul><li>Value chain as a tool for understanding networked structures </li></ul>
  34. 34. OUTSOURCED STRUCTURE Support Activities Primary Activities Outsourced Structure
  35. 35. OUTSOURCED STRUCTURE Outsourced to EDS Outsourced Structure Primary Activities Support Activities
  36. 36. NETWORK STRUCTURE Network Structure
  37. 37. ORGANIZATIONAL UNCERTAINTY Low uncertainty Moderate uncertainty High uncertainty Moderate Uncertainty Matrix of Organizational Uncertainty Low demands placed on structure to facilitate extent or speed of coordination Low demands placed on structure for broad coordination, high for speed of coordination High demands placed on structure to facilitate extent or speed of coordination, low demand on speed High demands placed on structure to facilitate both extent and speed of coordination Simple Complex Static Dynamic
  38. 38. INTERNATIONAL STRATEGY AND STRUCTURE Low International Product Diversity High International Product Diversity High Foreign Sales Low Foreign Sales Geographic structure Matrix structure Worldwide product division International division International Strategy and Structure