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Fundamentals of Organizational Structure

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Fundamentals of Organizational Structure Organization Structure Three Components Formal reporting relationships Grouping of people and departments Design of systems ... – PowerPoint PPT presentation

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Title: Fundamentals of Organizational Structure


1
Fundamentals of Organizational Structure
2
Organization Structure
  • Three Components
  • Formal reporting relationships
  • Grouping of people and departments
  • Design of systems to ensure effective
    communication, coordination, and integration

3
Linkages
  • Vertical
  • Control
  • Centralized decision-making
  • How achieved
  • Hierarchical referral
  • Rules and plans
  • Vertical Information Systems

4
Linkages
  • Horizontal
  • Learning
  • Decentralized decision-making
  • How achieved
  • Information systems
  • Direct contact
  • Task forces
  • Integrator
  • Teams

5
Organizational Structure
  • Required Work Activities
  • Reporting Relationships
  • Departmental Grouping Options
  • Functional
  • Divisional
  • Multifocused
  • Horizontal
  • Modular

6
Functional Structure
CEO
Finance
Marketing
Engineering
7
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8
Divisional Structure
  • AKA Product Structure
  • Decentralized decision-making
  • Strengths
  • Weaknesses

9
Divisional Structure
CEO
Product One
Product Two
Product Three
10
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11
Divisional Structure
CEO
Soft Drinks
Aquafina
Gatorade
12
Geographical Structure
  • Designed according to where product will be
    offered

13
Geographic Structure
CEO
United States
Asia
Europe
14
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15
Matrix Structure
  • Combines functional and divisional structure
  • Conditions
  • Need to share scarce resources
  • Two critical outputs
  • In-depth knowledge and new products
  • Complex and uncertain domain
  • Whos in charge?
  • Strengths
  • Weaknesses

16
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17
Horizontal Structure
  • Reengineering
  • Faster and better service for customers
  • Organized around processes and teams
  • Strengths
  • Weaknesses

18
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19
Modular Structure
  • Subcontracts processes
  • Manages them from a central hub
  • Business focuses only on core competency
  • Strengths
  • Weaknesses

20
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21
Hybrid Structure
  • Centralized functional structure for stable
    products other products may have self-contained
    departments
  • Certain departments work through entire
    organization (functional), but processes are
    focused in other areas (horizontal).

22
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23
Applications
  • Have scarce resources and need efficiency?
  • Need inter-functional coordination, innovation,
    and learning?

24
What Causes Problems?
  • Decision-making is delayed
  • Non-responsiveness to environmental changes
  • Too much conflict/ Turf wars
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