a complete organisation structure

1.  Organizations are working in the Open system.
 Relatively static environments and others face
dynamic environment.
 As the environmental complexity increases, the
organization structure is less formalized and less
centralized.
 Structural design is an important tool that
managers employ to eliminate or minimize the
impact of environmental uncertaininity.

2. 20 industrial firms in the U.K, to find out
the specific links between environment
and organization . These 20 firms were
operating in both ,stable and dynamic
environments. The general findings
states that successful firms in stable
environments were MECHANISTIC in
structure ,whereas successful firms in
dynamic environment tended to be more
ORGANIC or FLEXIBLE structures.

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aanndd ccoommpplleexx,, oorrggaanniizzaattiioonnss ffiinndd tthhaatt
ccoommppeettiittiivvee ssuurrvviivvaall ffoorrcceess tthheemm ttoo
bbeeccoommee mmoorree eennttrreepprreenneeuurriiaall.. TThhiiss,,
iinn ttuurrnn,, mmeeaannss tthheeyy mmuusstt ffiinndd wwaayyss ttoo
mmoovvee tthhee ccoommppaannyy ttoowwaarrddss mmoorree
oorrggaanniicc ssttrruuccttuurreess..

4. • Operating SSttyylleess –– mmuusstt bbee uunniiffoorrmm aanndd
rreessttrriicctteedd
• RReelluuccttaanntt aaddaappttaattiioonn –– wwiitthh iinnssiisstteennccee oonn
hhoollddiinngg ffaasstt ttoo ttrriieedd--aanndd--ttrruuee mmaannaaggeemmeenntt
pprriinncciipplleess ddeessppiittee cchhaannggeess iinn bbuussiinneessss
ccoonnddiittiioonnss
• TTiigghhtt ccoonnttrrooll –– tthhrroouugghh ssoopphhiissttiiccaatteedd ccoonnttrrooll
ssyysstteemmss

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eennvviirroonnmmeenntt
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mmoorree aapppprroopprriiaattee
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eeffffeeccttiivvee

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vvaarryy ffrreeeellyy
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cchhaannggiinngg cciirrccuummssttaanncceess
• LLoooossee,, iinnffoorrmmaall ccoonnttrrooll –– wwiitthh eemmpphhaassiiss oonn
nnoorrmm ooff ccooooppeerraattiioonn

7. More hostile eexxtteerrnnaall eennvviirroonnmmeenntt
MMaannaaggeemmeenntt ssttyyllee mmuusstt bbee mmoorree
eennttrreepprreenneeuurriiaall
OOrrggaanniicc ssttrruuccttuurree iiss nneeeeddeedd ttoo ffaacciilliittaattee
eennttrreepprreenneeuurrsshhiipp

8. Mechanistic Structures Organic Structures
1. Operate in dynamic
environments ,characterized, by
faster rates of changes and
greater uncertainty.
2. A more realistic divisional type
of division of work,where tasks
are not clearly defined in
advance but are adjusted and
redefined through employee
interaction.
3. Less hierarchy of authority and
control.
4. Decentralized
5. Lateral communication.
1. Operate in stable environment,
characterized by slow
technological and market
changes.
2. A functional division of work
where tasks are broken down into
specialized ,separate tasks.
3. Strict hierarchy of authority and
controls .Many rules and
procedures.
4. Most decisions are made at the top
5. Communication is vertical

9.  Formal Vs Informal Organization
 Formal Organization :
 It is deliberately designed.
 It refers to the structure of well-Defined jobs , each bearing a
definite authority, responsibility .
 The structure is built on 4 Pillars.( Division of labor, scalar process, structure
and span of control)
 Is designed by the Top Management.
 Concentrates on the performance of the job.
 Coordination among members is maintained through processes
and procedures.

10. Refer to the natural grouping of people on the basis of
some similarity in an organization.
 Some sort of pattern of relationship is developed.
 It is a natural outcome at the workplace.
 Membership is voluntary.
 Behavior Is coordinated by group norms .

11. Departmentation is a means of dividing a large
and complex organization into smaller ,flexible
administrative units.

12. A form of departmentalization in which individuals engaged in one
functional activity (Marketing, Finance, HRM) , are grouped into one unit
E x e c . V . P .
F i n a n c e & A d m i n .
S e n i o r V . P .
S t o r e s
S e n i o r V . P .
L o g i s t i c s
S e n i o r V . P .
H u m a n R e s o u r c e
C l a r k J o h n s o n
C E O

13. Advantages:
Clarity
Specialization
Coordination
In-depth skill development
Disadvantages :
Effort Focus
Sub Unit Conflicts
Monotony

14. Departmentation by product is adopted in the case of a multi product
enterprise. The organization is divided into divisions which bring
together those who are involved with a certain type of product.
M a n a g e r
( A u t o m o b ile s )
M a n a g e r
( R e f r ig e r a t o r s )
M a n a g e r
( S p a r e P a r ts )
M a n a g e r
( C o m p u t e r A c c e s s o r ie s )
P r e s id e n t
V ic e P r e s id e n t
( P r o d u c t io n )

15. The resources of one particular unit are deployed on the
product.
All the activities for a single product or purpose are brought
under one manager.
It becomes easy to fix accountability .
Whenever necessary , the autonomous units can be lopped off
with minimal effect on the entire organization.

16. Duplication of Resources.
Competition crops up within the organization
 Autonomy of divisional manager is exercised
within limits.

17. Geographic Departmentation ,facilitates adaptation to territorial
differences. Large companies that distribute products on a
massive scale nationally, often cannot coordinate all regions
from the headquarters.
Each region of the country has distinct needs, tastes and facilities
that demand coordination.
Decisions regarding pricing and marketing may be left to the
territorial managers who are close to customers and know their
needs better.

18. President
Vice President
(Marketing)
Manager
East Zone
Manager
West Zone
Manager
South Zone
Manager
North Zone

19. Strengths:
1. Assess the needs of Local Customers closely and serve them
well.
2. It is easy to pin point responsibility on Zonal Centers.
3. Expertise in a particular area.
4. Results in saving labor & Transportation costs.
Weaknesses:
1. Geographical distance gives rise to the problems of
communication ,coordination and control especially between
the head office and the branches.
2. Duplication of physical facilities may increase the costs of
operations.

20. The most recent approach , where a variety of industries ,
vertically integrated ,hierarchical organizations are giving way to
loosely interconnected groups of companies with permeable
boundaries.
Outsourcing which means farming out certain activities has
become a significant trend. In addition ,partnerships, alliances
,and other complex collaborative forms are now a leading
approach to achieving strategic goals.

21. The virtual network structure means that the firm
subcontracts most of its major functions to separate
companies and coordinates their activities from a small
headquarters organization.
How it Works :
The organization can be viewed as a central hub surrounded by a
network of outside specialists. Rather than being housed under one
roof ,services are outsourced to separate organizations that are
connected electronically to the central office.

22. Company
core
(HUB)
Accounts receivable provided by
a company in the US
Design provided by a company in
Canada
Manufacturing being provided by
a company in Asia.
Distribution being provided by a
company in Europe

23. STRIDA
How do two people run an entire company that sells thousands of high-tech
folding bicycles all over the world?
Steedman Bass and Bill Bennet do it with a virtual network approach that
outsources design ,manufacturing ,customer service, logistics ,accounting ,and
just about everything else to other organizations.
Bass, an avid cyclist ,got into the bicycle business when he and his partner
Bennnet bought the struggling British company strida,which was having trouble
making enough quality bicycles to meet even minimum orders. The partners soon
realized why strida was struggling . The design for the folding bicycle was a
clever engineering idea, but it was a manufacturing nightmare .Bass and Bennet
immediately turned over production engineering and new product development
to an American Bicycle designer, still with the intensions of building bikes at the
Birmingham factory. However, a large order from Italy sent them looking for other
options. Eventually ,they transferred all manufacturing to Ming Cycle company of
Taiwan ,which builds the bikes with parts sourced from parts manufacturers in
Taiwan and China.
Finally, the last piece of the puzzle was to contract with the company in
Birmingham that would take over everything else-from marketing to distribution.
Bass and Bennet concentrate their energies on managing the partnerships that
make the network function smoothly.

24. With a network structure like this ,it is difficult to
answer the question ,” Where is the organization?”.
In traditional terms .The different organizational parts
may be spread all over the world. They are drawn
together contractually and coordinated electronically
,creating new form of organization. Much like
building blocks,parts of the network can be added or
taken way to meet changing need.

25. Some positions in an Organization are primary to the
company’s mission, whereas others are secondary – in
the form of support or indirect contribution.

26. Line Functions
 Line Functions are those that are related directly with the attainment
of the Organizational Objectives . E.g. Producing or selling a product
or service.
 A line Manager has a clear line authority. That exists between superior
and his subordinates.
 The direct relationship between a superior and his subordinates is
created through the enforcement of line relationships .
 It includes the right of the manager to issue instructions to his
immediate subordinates, to supervise and coordinate the tasks
assigned to them.
Production Manager in a Manufacturing enterprise.

27. Production Manager
Foreman A Foreman B Foreman C
Workers Workers Workers

28. Staff positions serve the organization by
indirectly supporting line functions. Staff
personnel use their technical expertise to assist
line personnel .
e.g. Legal adviser is an example of staff manager

29.  Refers to a pattern in which staff specialists advice line
managers to perform their duties .
 Line managers requires the services of specialists which
he himself cannot provide.
 The staff positions or departments are purely advisory in
nature. Indirectly support the line functions.
 They have the right to recommend , but no authority to
enforce their preference on the departments.

30. Secretary Public Relation
General Manager
Officer
Manager-finance Manager-Personnel
Manager- Production
Production - Engineer
Foreman
Workers
Manager- Marketing
Sales Officer
Sales Supervisor
Salesmen

31. e.g The Production Manager in a manufacturing enterprise has line
authority to make decisions on the types volumes of materials needed
for production operations.
Whereas the Purchase Department acts as a staff function by
advising the Production Manager on whom to contact regarding the
same.

32. 1. Poor Human Relations
2. Overlapping authority and responsibility
Line View
1. Dilution and Usurpation of Authority
2. Ivory Tower Theoreticians
3. Steals Credit
Staff View
1. Line does not make proper use of staff
2. Line resists new ideas
3. Line does not give staff enough authority

33. A) Clarity in relationships.
B) Acceptance of staff advice
C) An informed staff
D) Completed staff work ( A careful study of the problem, listing of possible
alternatives and clear recommendations)

34. A Permanent organization designed to achieve specific results by
using teams of specialists from different functional areas in the
organization is a matrix organization.
Maintaining a balance between Technical Expertise and Customer
Requirement.
Breaks the application of the concept Unity Of Command

35. 1. Conflicting Environmental pressures
Maintaining Technical Excellence and also to meet unique customer
requirement.
2. High Information Processing
Are found in organizations which demand responses to rapid change
in markets and technology which face uncertainties that generate
high information processing requirements.
3. The need for better resource use
Matrix form provides an excellent opportunity for extra performers
and possessors of rare skill to contribute to more than one project or
to more than one functional department.

36. The matrix organization is an attempt to combine the advantages of the
pure functional structure and the product organizational structure. This
form is identically suited for companies, such as construction, that are
“project-driven”. The figure below shows a typical Matrix organization.
a matrix organization, each project manager reports directly to the
vice president and the general manager. Since each project represents
a potential profit centre, the power and authority used by the project
manager come directly from the general manager.

37. A matrix organization eliminates this duplication of skills and
responsibilities by identifying functions or common components that are
shared by multiple divisions, projects, or products. An organizational
chart that allocates skills or resources across the sectors or divisional
components as needed portrays the cross-functional nature of this
organizational design. It creates a multi-functional team approach rather
than a group of somewhat redundant functional skill sets.

38. Allow more efficient allocation of specialized skills across the entire business.
By taking advantage of the shared services and skills and not having to
develop and manage those skills themselves, the divisional or product line
organizations can better focus on their core business objectives. This last
point was one of the original driving forces behind the development and
popularization of matrix organizations. Today, matrix organizations are used
to describe more than just the product-based organization shown in these
examples. For example, many IT project managers use smaller matrix-style
structures for project and team organizations to track skills, tasks, and
resources across multiple projects to ensure skills and resources are used
properly

39. FEATURES
1. It is a hybrid structure.
2. In the matrix structure, project managers are assigned a variety of
projects-rather than a single one.
3. The matrix breaks the Unity of command concept.
USAGE
1. INDUSTRIAL PRODUCTS
2. BANKING PRODUCTS
3. ADVERTISING
4. HOSPITALS

40. Board Chairman
PRESIDENT
Cost Centers
Business.
No 1
Business.No 2
Business
No 3
Business
No. 4
Future
Other Services
Mktg Mgr Mfg Mgr T&D Mgr Eval Control
Business
Board
Functional
Professionalism

41. General Manager
Manufacturing Design Marketing
Top Leadership
Products (Outputs)
Outerwear Product
Manager
Managers of Shoe
Manufacture’s Plant
Matrix Bosses
Footwear Product
Manager
Two Boss Manager
Functions (Resources)
Fabrication
Procurement Quality Packaging