Post on 01-Jan-2016
Organisations - structure, functions and culture
Objectives Be able to describe the ways in which
organisations may be structured Know the characteristics of tall and
flat organisational structures Understand
centralisation/decentralisation Have an overview of organisational
functional areas Know the importance of information
systems in organisations
First - a definition!
“the structure of an organisation can be defined simply as the sum total of the ways in which it divides its labour into distinct tasks and then achieves coordination between them”
(Mintzberg, 1979)
Purpose of Organisational Structure To allocate tasks and responsibilities
(DISINTEGRATION) To identify and clarify roles and levels
of responsibility To coordinate activities and roles once
allocated (INTEGRATION) To facilitate and regulate information
flows and decision making processes To serve, in some measure, as a means
of resolving differences
Issues!
Task differentiation - how much? Tight or loose control? Mechanistic Vs organic? Central or devolved authority? Prescriptive job definition? Span of control? Communication flows/decision
making? External (environmental) factors?
Basic factors involved
Purpose and goals Tasks People Technology Culture External environment
Functional Specialisation
Professional expertise enhanced
Usually effective in practice
Traditional form of departmentalisation
Readily accepted by employees
Sub-optimality Problems adapting
to change (geographical, product diversification)
Narrow functional experience less suitable as training for general managers
Advantages Disadvantages
Geographical Specialisation
Faster decisionmaking
Uses local knowledge Speedier reaction
time Some operating
costs lower (storage, transport)
All round experience good training for managers
Loss of control by “head office”
Problems co-ordinating local activities
Duplication of effort
Advantages Disadvantages
Product Specialisation
Develops expertise in products/services
Responsibilities clearly identified
Diversification and technological change easier to handle
Sub optimality again!
Possible co-ordination problems
Loss of control by senior management
Advantages Disadvantages
Project CManager
Matrix Structure (1)Chief Exec
Production Finance ResearchMarketing
Project AManagerProject BManager
Vertical flows - functional authority
Hori
zon
tal flow
s -
Pro
ject
auth
ori
ty
Matrix Structure (2)
Can help motivation
Helps direct effort
Can result in “division of authority/responsibility” conflicts
Resource allocation problems
Resentment of “functional heads”
One man, One boss?!Tries to combine stability & efficiency of “functional” division withflexibility and directness of “project based” division
Factors influencing span of control
Narrow span Wider Span
Complex work Simple work
Uncertain environment Stable environment
Less able subordinates Able subordinates
More risk/danger Less risk/danger
Less able manager Able manager
“Tall” Vs “Flat” structures Size of organisation Complexity & nature of operations Production methods Technology Management style Amount of delegation Spans of control Ability of managers & personnel
“Tall” Vs “Flat” structures
Larger size Many levels Narrow span of
control Long chain of
command More formality,
specialisation & standardisation
Smaller size (usually)
Fewer levels Broad span of
control Short chain of
command
Decentralisation advantages
Improvement of local decision making Improvement of strategic decision
making Increased flexibility Reduced communication problems Increase motivation of local
management Better training for junior management
Decentralisation disadvantages
Possible sub-optimal decision making
More co-ordination problems Control and monitoring
problems Needs intelligent & well
motivated junior managers
Don’t decentralise!
Decisions about technologies, markets & products
Decisions about diversification and contraction
Decisions about corporate finance Decisions about corporate
personnel policy and key appointments
(Drucker)
The “Flexible Firm”
Core versus peripheral activities Functional flexibility for core
activities Polyvalence/multiskilling One man, one job? Numerical flexibility for peripheral
activities Outsourcing “Hire & fire”
Business Functions
Marketing Production Finance Personnel Administration
Marketing
What does the customer need? Product design Production levels Storage, distribution and delivery Market Research Advertising Selling
Production
Making or assembling product from raw materials or components
Types of production One-off Small batch Large batch Continuous process
Finance (1)
Financial accounting “keeping the books” provision of info for taxation
authorities production of statutory and
traditionally required documents
Finance (2)
Management accounting Provision of information for
decisionmaking Budgets
statements of resources available for a given period
expenditure monitoring and control Financing
Amounts and methods of raising funds
Personnel(1)
Recruitment Deployment Training Selection for
promotion/advancement
Personnel(2)
Wages/salaries & benefits grievances and discipline Termination of employment
retirement redundancy dismissal death!
Administration
Creating and operating rules, procedures and regulations
Implementing decisions and directives
Creating and maintaining channels and media for communication
Implementing changes in organisational policy
Effects on Info. Systems IS must be tailored to suit needs Consider information flow requirements Consider control issues Consider culture Consider degree of centralisation Consider empowerment/delegation
issues Consider available technology!
Further Reading
Bott et al sections 2.3, 3, 4, 8 Butel L et al (2002), Business
Functions, an Active Learning Approach, Blackwell, Oxford Sections 1.1 and 4
Learnmanagement link