Organisation

Organisation

• ”Organization is a structural relationship by which an enterprise is bound together and the framework in which individual effort is coordinated.”

Koontz and O’Donnell

Organising

• Process of determining the activities to be performed,

• arranging these activities to administrative units as well as

• assigning managerial authority and responsibilities to people employed in the organization..

Importance of organizing

• Focus on, and facilitate the attaining of objectives..

• Arrangement of positions and jobs within the hierarchy..

• Define responsibilities and line of authority of

all levels..

• Creating relationships that will minimize

friction..

Organizing and organization structure

• Organizing

• The process of arranging people and other resources to work together to

accomplish a goal.

• Organization structure

• The system of tasks, workflows, reporting relationships, and

communication channels that link together diverse individuals and groups.

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Why Have a Structure?

• A clear structure makes it easier to see which part of the business

does what

• An organisational structure is the way in which a business is arranged

to carry out its activities

Management Structure and Design

• The choice of structure impacts the organisations culture – their ethos

and beliefs

• If businesses are looking to change their direction they often look at

restructuring

Organisational structure

• Includes:

• The routes through which communication pass through the

business

• Who has authority and power and responsibility within the

business

• The roles and titles of people within the business

• The people whom individual employees are accountable for

and those for whom they are responsible

Key terms

• Hierarchy – the number of layers of levels within an organisation

• Subordinate – a worker

• Span of control – the number of subordinates who directly report into

a manager

• Chain of command – the line of communication and authority from the

top to the bottom of the hierarchy

Formal structures

• The structure of the organization in its official state.

• An organization chart is a diagram describing reporting relationships and the formal arrangement of work positions within an organization.

• An organization chart identifies the following aspects of formal structure:• The division of work.

• Supervisory relationships.

• Communication channels.

• Major subunits.

• Levels of management.

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Informal structures

• A “shadow” organization made up of the unofficial, but

often critical, working relationships between

organization members.

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Functional structures

• People with similar skills and performing similar tasks are grouped together into formal work units.

• Members work in their functional areas of expertise.

• Are not limited to businesses.

• Work well for small organizations producing few products or services.

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Functional structures in a business, branch bank, and community hospital.

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Divisional structures

• Group together people who work on the same product or process, serve similar customers, and/or are located in the same area or geographical region.

• Common in complex organizations.

• Avoid problems associated with functional structures.

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Divisional structures based on product, geography, customer, and process.

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Types of divisional structures and how they group

job and activities:

• Product structures focus on a single product or service.

• Geographical structures focus on the same location or

geographical region.

• Customer structures focus on the same customers or

clients.

• Process structures focus on the same processes.

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Matrix structure

• Combines functional and divisional structures to gain

advantages and minimize disadvantages of each.

• Used in:

• Manufacturing

• Service industries

• Professional fields

• Non-profit sector

• Multi-national corporations

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Matrix structure in a small multiproject business firm.

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Team structures

• Extensively use permanent and temporary teams to solve

problems, complete special projects, and accomplish day-to-day

tasks.

• Often use cross-functional teams.

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How a team structure uses cross-functional

teams for improved lateral relations.

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Network structures

• A central core that is linked through networks of relationships

with outside contractors and suppliers of essential services.

• Own only core components and use strategic alliances or

outsourcing to provide other components.

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A network structure for a Web-based retail business.

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Spans of control in “flat” versus “tall” structures.

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Entrepreneurial Structure

• Often found where businesses operate in competitive markets and especially where rapid decisions are needed

• Have a few core workers at the centre of the organisation and peripheral workers surrounding them

• Depends on how good the core workers are at managing and making decisions

• Can be difficult for larger organisations