ORGANISATIONAND MANAGEMENT

M. Ingham

Organisational structure 

• OS is a firm’s– Design: Formal role configuration– Procedures– Governance– Control mechanisms– Authority– Decision-making

Organisation

S

C

D

Organizational design

• Relate units and create organizational contexts propitious to the achievement of organizational objectives and activities– creativity, effectiveness and efficiency

Central dimensions

• Key concepts

– differentiation and integration – specialization and coordination

CENTRAL DIMENSIONS

DIFFERENTIATION

INTEGRATION

SPECIALISATION

COORDINATION

Key Elements

• How to organize the value activities (value chain)– integration or de-integration– network

Organizational design

• Determinants• industry, strategy, technology, production

process,…• size, growth, product range and activities• cultures (national and corporate)• preferences (power) and managerial styles• ...

How do companies grow

Age

Size

ys

large

1 2 3 4 5

creativity

direction

delegation

coordination

collaboration

leadership

autonomy

control

red tape

? ?Evolutions

Revolutions

How companies Grow and Change

Greiner:1998matureyoungsmall

large High-growth Industry

Medium-growth Industry

Low-growth Industry

Evolutions , Revolutions

THE CONTINUUM

SOLAR FUNCTIONAL

SIMPLE SOPHISTICATED

DIVISIONAL

RELATED CONGLOMERATE

HOLDINGMATRIX

PROJECTORGANISATIONAL

DESIGN

STRATEGIC OPTIONS

SPECIALISATION DIVERSIFICATION

INTEGRATION

Types of structures

• “Simple and solar”

• One leader ( founder or small team)) coordinating the activities and functions

• No formal hierarchy and informal communication

Simple- Sun

CEO

Leader-entrepreneur

SALES

PRODUCTION

Functional (Simple and Pure)

• One product line, one distribution channel• Integrated production process• Integrated Flow

RD PROD MARKETING

Functional simple

F in

H r

R D P R O D U C TIO N M A R K E TIN G

C E O

Functional 2

• One dominant line with some secondary products

• Dominant channel • Larger size • Hierarchical with vertical levels

Functional 2

F in \ A c H R

R D

B y p rod u c t

P R O DD O M IN L in e

M A R K E T

C E O

Divisional

• Diversified activities and product lines• Different markets• Different production processes• ...

Divisions (1)

S u p p ort a ctiv it ies

D iv is1

R D P R O D U C T M A R K E T

D IV IS 2 D IV IS 3

C E O

Divisions 2

S u p p ortac tiv it ies

F in , H R ,M IS ,

D IV IS 1 1 D IV IS 1 2

G R O U P 1 G R O U P 2 G R O U P

C E O

MATRIX

RD MAN MKT

Product line 1

BU11

BU 12

Product line2

BU 21

BU 22

…

PROJECT

• “Ad hoc”structure; permanent or not permanent teams– RD, MF, MKT

PROD

MKT

RD

Innovation Project

R&D Manufacturing Marketing

Sequential: linear

Overlapping

R&D

ManMark

NETWORKS

CORE ACTIVITIES

ORGANISATION

THE « ORGANISATIONAL DIAMOND »

Mintzberg,

DIRECTION

PROFICIENCY

INNOVATIONCONCENTRATION

EFFICIENCY COOPERATION

COMPETITION

ORGANISATION: TOWARDS CONFIGURATIONS

Mintzberg,

PROFESSIONAL

ENTREPRENEURIAL

DIVERSIFIED ADHOCRACY

IDEOLOGICAL

POLITICAL

MACHINE

STRATEGY-ORGANISATION

How do companies grow: strategic optionsPRODUCT LINES

PRESENT NEW

MARKETS

PRESENT

NEW

SPECIALISATION EXPANSION

RELATED DIVERSIFICATION

EXPANSION

INTERNATIONALISATION

RELATED DIVERSIFICATION

UNRELATED (CONGLOMERAL)

DIVERSIFICATION

INTEGRATION

How do companies grow: strategic options and organisational design

PRODUCT LINES

PRESENT NEW

MARKETS

PRESENT

NEW

DIVISIONAL (related)

CONGLOMERAL

MULTIDOMESTIC ( PURE)

FUNCTIONAL

FUNCTIONAL II with Geo subsidiaries

SEGM

GEO