ORGANIZATIONAL STRUCTURE

PRESENTATION BY

KARTAR SINGH

ORGANIZATIONAL STRUCTURE

ORGANIZATIONAL STRUCTURE can be defined as the framework with in which managerial and operating task are performed. It specifies the relationship between people work and resources.

There are two most commonly found forms of organization structures are :

FUNCTIONAL STRUCTURE. DIVISIONAL STRUCTURE.

FUNCTIONAL STRUCTURE

FUCTIONAL STRUCTURE is an organizational design that groups similar or related jobs together.

In FUNCTIONAL STRUCTURE , activities are grouped and departments are created on the basis of specified functions to be performed.

ADVANTAGES SPECIALISATION: A functional structure

leads to occupational specialization since emphasis is placed on specific functions.

EFFICIENCY: It helps in increasing managerial and operational efficiency and this results in increased profit.

PROPER ATTENTION: It ensures that different functions get due attention.

DISADVANTAGES FUNCTIONAL EMPIRES: A functional structure

places less emphasis on overall organizational than the departmental objectives.

PROBLEMS IN COORDINATION: Pursuing departmental interests at the cost organizational interests can also hinder the interaction between two or more departments.

INFLEXIBILITY: It may lead to inflexibility as people with same skills and knowledge base may develop a narrow perspective and thus have difficulty in appreciating others point of view.

DIVISIONAL STRUCTURE

In large diversified organizations, activities and personnel and grouped in to number of divisions on the basis of different products manufactured or geographical areas.

DIVISIONAL STRUCTURE is suitable for those business enterprises where a large variety of products are manufactured using different productive resources.

ADVANTAGES

PRODUCT SPECIALISATION : A Divisional head gains experience in all functions related to a particular product.

GREATER ACCOUNTABILITY: A Divisional head is accountable for profits of all departments, as revenues and costs.

FLEXIBILITY: It promotes flexibility and initiative because each divisional head gains experience in all functions related to a particular product.

DISADVANTAGES CONFLICTS: Conflicts may arise among

different divisions with reference to allocation of funds.

COSTLY: It may lead to increase in cost since there may a duplication of activities across products.

IGNORING OF ORGANISATIONAL INTERESTS : It provides managers with the authority to supervise all activities related to particular division.

DIVISION OF WORK

IN DIVISION OF WORK , work is divided in to small tasks/jobs. A trained specialists who is competent is required to perform each job. Thus , DIVISION OF WORK leads to specialization, According to FAYOL “The intend of DIVISION OF WORK is to produce more and better work for the same effort. Specialization is the most efficient way to use human effort.

EFFECTS

DIVISION OF WORK leads to specialization.

It results in efficient and effective product.

DIVISION OF WORK makes tasks simpler.

ADVERSE EFFECTS

There will be lack of specialization. Efficiency of work will suffer. Waste of time and effort caused by

changes from one work to another.

DEPARTMENTALIZATION

DEPARTMENTALIZATION is the process of synchronization of division of work.

DEPARTMENTALIZATION is also the process of grouping the activities in to departments.

MAJOR TYPES

FUNCTIONAL DEPARTMENTALIZATION:

DEPARTMENTALIZATION by function (work being done).

In a normal company :

Human Resources

It Departments

Accounts Department , etc.

PRODUCT DEPARTMENTALIZATION

DEPARTMENTALIZATION by product.

Apple produces I pad , I phone and Mac books.

All different products produce by same company thus different production departments.

CUSTOMER DEPARTMENTALIZATION

DEPARTMENTALIZATION on the basis of types of customer.

McDonalds have different departments for their vegetarian and non vegetarian customers.

GEOGRAPHICAL DEPARTMENTALIZATION

DEPARTMENTALIZATION by the GEOGRAPHY of the place.

Standard charted bank have 97 total branch in India and over 1700 branches and offices in more than 70 countries.

PROCESS DEPARTMENTALIZATION

DEPARTMENTALIZATION through the customer flow or PROCESS flow.

Acquiring a driving license , one need to first fill the form , validate it , appear for test , submit the result and different PROCESS until its issued . All this PROCESS to be followed have their own departments.

HIERARCHY A HERARCHY describe the structures of the

management of the business , from the top of the company , the managing director , through to the shop floor worker, who reports to their foreman , in a manufacturing business.

A SPAN OF CONTROL

A SPAN OF CONTROL is the number of people who report to one manager in a HIERARCHY. The more people under the control of one manager the wider SPAN OF CONTROL. Less means a narrower SPAN OF CONTROL.

THE ADVANTAGES OF WIDE SPAN OF CONTROL ARE : There are less layers of management to

pass a message through , so the message reaches more employees faster.

It consists costs less money to run a wider SPAN OF CONTROL because a business does not need to employ as many managers.

ADVANTAGES OF NARROW SPAN OF CONTROL : A narrow SPAN OF CONTROL allows a

manager to communicate quickly with the employees under them and control them more easily.

Feedback of ideas from the workers will be more effective.

CHAIN OF COMMAND

CHAIN OF COMMAND is the line on which orders and decisions are passed down from top to bottom of the HIERARCHY. In a HIERARCHY the CHAIN OF COMMAND means that a production manager may be higher up the HIERARCHY , but will not be able to tell a marketing person what to do.

ADVANTAGES IF CHAIN OF COMMAND : Helps create a clear communication line

between the top and bottom of the business , this improves coordination and motivation since employees know what is expected of them and when.

HIERARCHIES create departments and departments teams. There are motivational advantages of working in teams.

DISADVANTAGES OF CHAIN OF COMMAND The formation of departments can mean

that : Departments work for themselves and

do not greater good for the business. Departments do not see the whole

picture in making decisions.

COORDINATION

COORDINATION means synchronizing the efforts by unifying , integrating and harmonizing the activities of different departments and individuals for the achievements of common objectives.

THE BASIC FEATURES OF COORDINATION : Deliberate Action. Group Effort. Continues Activity. Permeates all management functions.

NEED AND CHARACTERISTICS OF COORDINATION :

COORDINATION integrates group effort :

COORDINATION integrates and unifies diverse activities in to purposeful activities.

COORDINATION ensures unity of action :

The purpose of COORDINATION is to secure unity of action in the realization of common purpose.

COORDINATION is a continues process :

COORDINATION is a continues process. It begin at a planning stage and continues till controlling. Top management plans for the entire organization.

NEED FOR COORDINATION The need for COORDINATION arises

whenever and wherever , a group of person work together to achieve common objectives.

Increase in size and complexity of operations.

Specialization. Clash of interest. Difference in attitudes and working style. Independence of units.

TYPES OF COORDINATION Internal COORDINATION . External COORDINATION . Vertical COORDINATION . Horizontal COORDINATION .

TECHNIQUES OF COORDINATION Managers use a variety of techniques

for achieving COORDINATION . The main ones includes , the following :

Sound Planning. Sound and Simple organization. Chain of Command. Effective Communication. Special COORDINATION. Sound Leadership.

PRINCIPLES OF COORDINATION

Principle of direct contact. Early Stage. Reciprocal Relationship. Principle of Continuity. Principle of Self COORDINATION.

THANKYOU