A Presentation On

Organizational Structure:

Departmentation

Departmentation by simple numbers:

Definition:

Grouping of activities based on numbers.

Reasons of the decline of departmentation:

1. Technology has advanced

2. Groups composed of specialized personnel are more efficient.

3. It is used only at the lowest level of the organization structure.

Departmentation by Time:

Grouping of activities based on the basis of time.

Advantages: Disadvantages:

Services can be rendered

efficiently.

It is useful to a continuing

cycle.

It ensures the fullest uses of

equipment.

Lacking of supervision.

Creating problems in coordination.

Increase the cost of the product.

Departmentation by enterprise function:

Grouping activities in accordance with the function of an enterprise.

Advantages: Disadvantages:

1. Logical reflection of function.

.

2. Maintains power and

prestige of major functions

3. Follows principle of occupational

specialization.

1. Reduces coordination between

functions. .

2.Responsibility of profits is at top

level.

3. Slow adaptation to changes in

environment.

Departmentation by enterprise function:

Department by Geography:

Grouping of activity based on geography.

Advantages: Disadvantages:

Places responsibility at a lower

level.

Emphasis on local market.

Improve coordination in region.

Better face to face communication

.

Requires more persons with general

manager abilities.

Duplication of service.

Problem of top management control .

Department by Geography:

Customer Departmentation:Grouping of activity based on customer.

Advantages: Disadvantages:

.

Concentrates on customer.

Develops expertness in

customer area.

Difficult to cope up with

competitive customer demand .

Requires managers and staff

expert in customer problem

Customer groups may not

always defined.

Customer Departmentation:

Group of activities around a

process or type of equipment used.

Department by Process and Equipment:

The grouping of activities around product or product line.

Department by Product:

Advantages: Disadvantages:

.Achieves economic advantage.

Uses specialized technology.

Utilizes special skills.

Simplifies training.

Coordination of department is

difficult.

Responsibility is at top.

Unsuitable for developing

general manager.

Department by Product:

Matrix Organization:

Matrix organization normally is the combining of functional and project or

product patterns of departmentation in the same organization structure.

Mainly applied in:

1. Constructions;

2. Aerospace;

3. Marketing;

4. Installation of an electronic data processing system;

5. Management consulting firms etc.

Matrix Organization:

Matrix Organization:

Advantages: Disadvantages:

1. Is oriented toward end results;

2. Professional identification is

maintained;

3. Pinpoints product- profit

responsibility.

1.Conflict in organization authority

exists;

2.Possibility of disunity of

command exists;

3. Requires manage effective in

human relations.

Matrix Organization:

1. A state of conflict exists between functional and project managers, as both complete for limited

resources (for example, financial and human). Moreover, members of the project team may

encounter role ambiguity;

2. Role conflict, role ambiguity, and role overload may result in stress for the functional and

project managers as well as for the team members;

3. An imbalance of authority and power, as well as horizontal and vertical influence of the project

and functional managers, can also lead to problems in matrix organizations

4. Because of the potential conflicts, managers may want to protect themselves against blame by

putting everything in writing, which increases administration costs.

5. Matrix organization requires many time-consuming meetings.

Problems with matrix management:

Guidelines for making Matrix Management Effective:

1. Define the objectives of the project or task;

2. Clarify the role, authority, and responsibilities of managers and team members.;

3. Ensure that influence is based on knowledge and information, rather than on rank;

4. Balance the power of functional and project managers;

5. Select an experienced manager for the project who can provide leadership;

6. Undertake organization and team development;

7. Reward project managers and team members fairly etc.

Strategic business units are distinct little businesses set up as units in a large company to

ensure that a certain product or product line is promoted and handled as though it were an

independent business.

Strategic Business Units:

1. Have its own mission, distinct from the mission of other SBUs;

2. Have definable groups of competitors;

3. Prepare its own integrative plans, fairly distinct from those of other SBUs;

4. Manage its resources in key areas;

5. Have proper size-neither too large nor too small etc.

Specific criteria to become SBUs:

Strategic Business Units: