Semester 2 Assgn. 2, Bureaucratic vs Matrix Structure

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[T YPE THE COMPANY ADDRESS ] ASSIGNMENT 2 MANAGEMENT & ORGANIZATION BUREAUCRATIC VS MATRIX STRUCTURE ZAHID NAZIR Roll No. AB523655 MBA Executive 2 nd Semester , Spring 2009 ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD C OMMONWEALTH OF L EARNING E XECUTIVE MBA P ROGRAMME

Transcript of Semester 2 Assgn. 2, Bureaucratic vs Matrix Structure

Page 1: Semester 2 Assgn. 2, Bureaucratic vs Matrix Structure

[ T Y P E T H E C O M P A N Y A D D R E S S ]

ASSIGNMENT 2

MANAGEMENT &

ORGANIZATION

BUREAUCRATIC

VS

MATRIX STRUCTURE

ZAHID NAZIR

Roll No. AB523655

MBA Executive

2nd Semester , Spring 2009

A L L A M A I Q B A L O P E N U N I V E R S I T Y , I S L A M A B A D

C O M M O N W E A L T H O F L E A R N I N G E X E C U T I V E M B A P R O G R A M M E

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Zahid Nazir

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ORGANIZATIONAL STRUCTURE

Introduction

Organization is two or more people who work together to achieve

organizational goals and objectives efficiently and effectively. Also it can

identify as nonrandom arrangement of components or parts interconnected in

a manner as to constitute a system identifiable as a unit. In an organization,

they use organizational structures for their works. We can identify there are

three traditional organizational design such as simple, functional, divisional.

Organizations face more strength and weakness in these structures. Nowadays

they try to ignore that weakness and develop these organizational designs as

Team structure, Matrix structure, Project structure, Boundaryless structure and

Learning structure.

Using those contemporary organizational designs organizations gain there are

many advantages. Employees are more involved and empowered, Reduce

barriers among functional areas, fluid and flexible design that can respond to

environmental changes, faster decision making, highly flexible and responsive,

draws on talent wherever it’s found, organization can cope with environmental

changes and employees feel free to make decisions are advantages. So,

contemporary organizational designs are better than traditional organizational

structures to the organizations.

“Organizational structure is the formal framework by which job tasks are

divided, grouped, and coordinated”. When managers develop or change and

organization’s structure, they are engaged in organizational design, a process

that involves decisions about six key elements:

Stephen P.Robbins & Mary Coulter

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• Work Specialization

• Departmentalization

• Chain of Command

• Span of Control

• Centralization and Decentralization

• Formalization

Organizational design is engaged when managers develop or change an

organization's structure. Organizational Design is a process that involves

decisions about the following six key elements:

i). WORK SPECIALIZATION

Describes the degree to which tasks in an organization are divided into

separate jobs. The main idea of this organizational design is that an

entire job is not done by one individual. It is broken down into steps, and

a different person completes each step. Individual employees specialize

in doing part of an activity rather than the entire activity.

ii). DEPARTMENTALIZATION

It is the basis by which jobs are grouped together. For instance every

organization has its own specific way of classifying and grouping work

activities.

There are five common forms of departmentalization:

a). Functional Departmentalization. As shown in the Figure, it groups jobs

by functions performed. It can be used in all kinds of organizations; it

depends on the goals each of them wants to achieve.

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Figure

Different aspects on this type of departmentalization:

Positive Aspects

• Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations

• Coordination within functional area

• In-depth specialization

b). Product Departmentalization

manager is responsible of an area within the organization depending of

his/her specialization

Different aspects on this type of departmentalization:

Positive Aspects

• Allows specialization in particular products and services

• Managers can become experts in their industry

• Closer to customers

Manager

Engineering

4

Figure - Functional Departmentalization

Different aspects on this type of departmentalization:

Positive Aspects Negative Aspects

Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations Coordination within functional area

depth specialization

• Poor communication across functional areas

• Limited view of organizational goal

Product Departmentalization. It groups jobs by product line. Each

manager is responsible of an area within the organization depending of

his/her specialization.

Different aspects on this type of departmentalization:

Positive Aspects Negative Aspects

Allows specialization in particular products and services Managers can become experts in their industry Closer to customers

• Duplication of functions • Limited view of

organizational goals

Plant Manager

Manager

Accounting

Manager

ManufacturingManager HR

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Negative Aspects

Poor communication across functional areas

organizational goals

. It groups jobs by product line. Each

manager is responsible of an area within the organization depending of

Aspects

Duplication of functions

organizational goals

Manager HRManager

Purchasing

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c). Geographical Departmentalization

territory or geography.

Figure: Geographical Departmentalization

Different aspects on this type of departmentalization:

Positive Aspects

• More effective and efficient handling of

Sales Director

Punjab Region

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Figure : Product Departmentalization

Departmentalization. It groups jobs on the basis of

territory or geography.

Figure: Geographical Departmentalization

Different aspects on this type of departmentalization:

Positive Aspects Negative Aspects

More effective and efficient handling of

• Duplication of functions • Can feel isolated from

Vice President

for Sales

Sales Director

Sindh Region

Sales Director

NWFP Region

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. It groups jobs on the basis of

Negative Aspects

Duplication of functions Can feel isolated from

Sales Director

Balochistan

Region

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specific regional issues that arise

• Serve needs of unique geographic markets better

d). Process Departmentalization

customer flow.

Figure: Process Departmentalization

Different aspects on this type of departmentalization:

Positive Aspects

• More efficient flow of work activities

e). Customer Departmentalization

customers.

Different aspects on this type of departmentalization:

Positive Aspects

• Customers' needs and problems can be met by specialists

Engineering

Manager

Production

Manager

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specific regional issues that arise Serve needs of unique geographic markets

other organizational areas

Process Departmentalization. It groups on the basis of product or

Figure: Process Departmentalization

Different aspects on this type of departmentalization:

Positive Aspects Negative Aspects

More efficient flow of work activities

• Can only be used with certain types of products

Customer Departmentalization. It groups jobs on the basis of common

Different aspects on this type of departmentalization:

Positive Aspects Negative Aspects

Customers' needs and problems can be met by

• Duplication of functions • Limited view of

organizational goals

Site Director

Production

Manager

Quality

Manager

Logistics

Manager

Procurement

Manager

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other organizational

. It groups on the basis of product or

Negative Aspects

Can only be used with certain types of products

groups jobs on the basis of common

Duplication of functions

Procurement

Manager

Finance

Manager

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Figure: Customer Departmentalization

iii). CHAIN OF COMMAND

It is defined as a continuous line of authority that extends from upper

organizational levels to the lowest levels and clarifies who reports to

whom. There are three important concepts attached to this theory:

• Authority: Refers to the rights inherent in a

tell people what to do and to expect them to do it.

• Responsibility

• Unity of command

should report to only one manager.

iv). SPAN OF CONTRO

It is important to a large degree because it determines the number of

levels and managers an organization has. Also, determines the number

of employees a manager can efficiently and effectively manage.

Manager

Accounts

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Figure: Customer Departmentalization

CHAIN OF COMMAND

It is defined as a continuous line of authority that extends from upper

organizational levels to the lowest levels and clarifies who reports to

whom. There are three important concepts attached to this theory:

: Refers to the rights inherent in a managerial position to

tell people what to do and to expect them to do it.

Responsibility: The obligation to perform any assigned duties.

Unity of command: The management principle that each person

should report to only one manager.

SPAN OF CONTROL

It is important to a large degree because it determines the number of

levels and managers an organization has. Also, determines the number

of employees a manager can efficiently and effectively manage.

Director of

Sales

Manager

Retail

Accounts

Manager

Wholesale

Accounts

Manager

Government

Accounts

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It is defined as a continuous line of authority that extends from upper

organizational levels to the lowest levels and clarifies who reports to

whom. There are three important concepts attached to this theory:

managerial position to

tell people what to do and to expect them to do it.

: The obligation to perform any assigned duties.

: The management principle that each person

It is important to a large degree because it determines the number of

levels and managers an organization has. Also, determines the number

of employees a manager can efficiently and effectively manage.

Manager

Government

Accounts

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v). CENTRALIZATION AND DECENTRALIZATION

More Centralization More Decentralization

• Environment is stable • Lower-level managers are not as

capable or experienced at making decisions as upper-level managers.

• Lower-level managers do not want to have say in decisions

• Decisions are significant. • Organization is facing a crisis or

the risk of company failure. • Company is large. • Effective implementation of

company strategies depends on managers retaining say over what happens.

• Environment is complex, uncertain.

• Lower-level managers are capable and experienced at making decisions.

• Lower-level managers want a voice in decisions.

• Decisions are relatively minor. • Corporate culture is open to

allowing managers to have a say in what happens.

• Company is geographically dispersed.

• Effective implementation of company strategies depends on managers having involvement and flexibility to make decisions

vi). FORMALIZATION

It refers to the degree to which jobs within the organization are

standardized and the extent to which employee behavior is guided by

rules and procedures.

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TYPES OF ORGANIZATIONAL STRUCTURES

In making organizational design decisions, managers have some common

structural designs from which to choose. Most commonly we consider about

two organizational designs. These are:

� Traditional organizational structure

� Contemporary organizational structure.

TRADITIONAL ORGANIZATIONAL STRUCTURE

When we consider the traditional organizational design, especially there are

three major types of structures. They are can be listed out:

• Simple structure

• Functional structure

• Divisional structure

Disadvantages

• Lack of flexibility to changing mission needs/rapidly changing world

• Internal and external communication barriers (ideas are not

communicated)

• Slow/Poor in responding to customer requirements

• Failure to get things done

• Customers/Vendors have a hard time dealing with the organization

(multiple/unknown contacts)

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Due to above reasons they need to move in creative ways to structure and

organize works and to make their

of customers, employees and other organizational constituents.

In this century, there are more favorable concepts that have being generated,

especially due to global village concept most of organizations have to

their organizational structures in order to achieve their overall objectives

through making employees’ job satisfaction. Therefore the contemporary

structure is used by organizations.

SIMPLE STRUCTURE

A simple structure is defined as a design with

spans of control, centralized authority, and little formalization. This type of

design is very common in small start up businesses. For example in a business

with few employees the owner tends to be the manager and controls a

functions of the business. Often employees work in all parts of the business

and don’t just focus on one job creating little if any departmentalization. In this

type of design there are usually no standardized policies and procedures. When

the company begins to expand then the structure tends to become more

complex and grows out of the simple structure.

Sales

Person

Sales

Person

10

Due to above reasons they need to move in creative ways to structure and

organize works and to make their organizations more responsive to the needs

customers, employees and other organizational constituents.

In this century, there are more favorable concepts that have being generated,

especially due to global village concept most of organizations have to

their organizational structures in order to achieve their overall objectives

through making employees’ job satisfaction. Therefore the contemporary

structure is used by organizations.

A simple structure is defined as a design with low departmentalization, wide

spans of control, centralized authority, and little formalization. This type of

design is very common in small start up businesses. For example in a business

with few employees the owner tends to be the manager and controls a

functions of the business. Often employees work in all parts of the business

and don’t just focus on one job creating little if any departmentalization. In this

type of design there are usually no standardized policies and procedures. When

mpany begins to expand then the structure tends to become more

complex and grows out of the simple structure.

Simple Structure

Owner

Dept. Store

Sales

Person

Sales

Person

Sales

Person

Zahid Nazir

Roll No. 523655

Due to above reasons they need to move in creative ways to structure and

organizations more responsive to the needs

customers, employees and other organizational constituents.

In this century, there are more favorable concepts that have being generated,

especially due to global village concept most of organizations have to revise

their organizational structures in order to achieve their overall objectives

through making employees’ job satisfaction. Therefore the contemporary

low departmentalization, wide

spans of control, centralized authority, and little formalization. This type of

design is very common in small start up businesses. For example in a business

with few employees the owner tends to be the manager and controls all of the

functions of the business. Often employees work in all parts of the business

and don’t just focus on one job creating little if any departmentalization. In this

type of design there are usually no standardized policies and procedures. When

mpany begins to expand then the structure tends to become more

Sales

Person

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FUNCTIONAL STRUCTURE

The functional organization, shown in Figure

rests with the functional heads; the structure is sectioned by departmental

groups. Staff members are divided to groups (e.g. financial, planning, public

relations, engineering, legal etc) according to their specialized

Some of these groups can be further subdivided into smaller functional groups.

For example, the Engineering Department may be further subdivided into

Mechanical Engineering and Electrical Engineering Units.

The main advantage of this organiz

group has complete control over its segment of the project, enforcing in this

way the application of standards across projects.

The disadvantages of the functional organization are that of speed, flexibility

and communication when attempting cross

functional organization the work is divided between the departments, any

query or request must be passed among department heads for approval,

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STRUCTURE

The functional organization, shown in Figure, is a structure in where authority

rests with the functional heads; the structure is sectioned by departmental

groups. Staff members are divided to groups (e.g. financial, planning, public

relations, engineering, legal etc) according to their specialized

Some of these groups can be further subdivided into smaller functional groups.

For example, the Engineering Department may be further subdivided into

Mechanical Engineering and Electrical Engineering Units.

The main advantage of this organizational structure is that each functional

group has complete control over its segment of the project, enforcing in this

way the application of standards across projects.

The disadvantages of the functional organization are that of speed, flexibility

ommunication when attempting cross–functional projects. Since in a

functional organization the work is divided between the departments, any

query or request must be passed among department heads for approval,

Zahid Nazir

Roll No. 523655

is a structure in where authority

rests with the functional heads; the structure is sectioned by departmental

groups. Staff members are divided to groups (e.g. financial, planning, public

relations, engineering, legal etc) according to their specialized knowledge.

Some of these groups can be further subdivided into smaller functional groups.

For example, the Engineering Department may be further subdivided into

ational structure is that each functional

group has complete control over its segment of the project, enforcing in this

The disadvantages of the functional organization are that of speed, flexibility

functional projects. Since in a

functional organization the work is divided between the departments, any

query or request must be passed among department heads for approval,

Page 12: Semester 2 Assgn. 2, Bureaucratic vs Matrix Structure

causing in this way delays. In addition, the re

project is shared among the functional managers (head of the departments)

and this may cause lack of ultimate responsibility for project management.

DIVISIONAL STRUCTUR

A divisional structure is made up of separate, semi

divisions. Within one corporation there may be many different divisions and

each division has its own goals to accomplish. A manager oversees their

division and is completely responsible for the success or failure of the

division. This gets managers to focus more on results knowing that they will

be held accountable for them.

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causing in this way delays. In addition, the responsibility of managing the

project is shared among the functional managers (head of the departments)

and this may cause lack of ultimate responsibility for project management.

DIVISIONAL STRUCTURE

A divisional structure is made up of separate, semi-autonomous units or

divisions. Within one corporation there may be many different divisions and

each division has its own goals to accomplish. A manager oversees their

division and is completely responsible for the success or failure of the

ts managers to focus more on results knowing that they will

be held accountable for them.

Zahid Nazir

Roll No. 523655

sponsibility of managing the

project is shared among the functional managers (head of the departments)

and this may cause lack of ultimate responsibility for project management.

tonomous units or

divisions. Within one corporation there may be many different divisions and

each division has its own goals to accomplish. A manager oversees their

division and is completely responsible for the success or failure of the

ts managers to focus more on results knowing that they will

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CONTEMPORARY ORGANIZATIONAL DESIGNS The flexible structural methods that job tasks are divided, grouped, and

coordinated for response to dynamic environmental factors.

To face highly dynamic and complex environment the contemporary

organizational structure is very important. In response to market place

demands for being lean, flexible and innovative current organization s use

these contemporary structures.

• Team structure

• Matrix structure

• Project structure

• Boundary less organizations

� Network organizations

� Modular organizations

� Virtual organizations

• Learning organizations

TEAM STRUCTURE

In the team base structure, the entire organization is made up of work groups

or teams that perform the organization’s work. In the team base structure,

employee’s empowerment is crucial because there is no line of managerial

authority from top to bottom. Rather, employee teams are free to design work

in the way think is best. However, the teams are also held responsible for all

work activity and performance results in their respective areas.

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In large organizations, the team structure complement what is typically a

functional or divisional structure. This allows the organizations to have

efficiency of a bureaucracy while providing the flexibility that team provide to

improve productivity at the operational level. Examples for team structure

• In marketing field sales force is use this team based structure. Also forces

use this team structure.

• Team based structure usually practice in unbranded products, like

furniture, electric equipments, and cosmetics.

Advantages Easy Integration. Since it is the most popularly used form of team organization

it is easy to integrate. This is so, because every developer is experienced with

such a structure and understands their role within it.

Better Management, More Control. Since the entire team is physically within

the same building, communication is at its peak, since face-to-face

communication is by far the best method in all situations. The physicality of this

team structure typically means it is easier to find and solve issues together. It is

also easier to spawn a team spirit, particularly in crunch periods, which can

spark increased motivation.

Greater productivity, in a team based structure there are various skills and

ability persons give their contribution produce a great output.

Disadvantages Significant Overheads. Of course hiring a full team and owning or renting office

space with all that goes with it (i.e. electricity, computers) a studio is going to

run high overheads. In fact, overheads can amount to a quarter of the budget

on some productions, which is an incredibly high ratio of cost.

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Arising conflicts, team based structure lead to opinion conflicts among team

members.

MATRIX STRUCTURE The matrix structure of contemporary organizational structures assigns

specialist from different functional departments to work on one or more

projects.

In matrix structure one employee should report to two managers. So the

employee faces conflict when they address their superiors. To whom should I

report firstly, and to whom should I obey or directly responsible. Their

functional departments manager and their product or project manager who

share authority. The project managers have authority over the functional

members who are part of their project team in area relative to the project’s

goals. However decisions such as promotions, salary recommendations and

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annual reviews remain the functional manager’s responsibilities. To work

effectively, project and functional managers have to communicate regularly,

coordinate work demands on employees and resolve conflicts together.

Matrix Organizational Structure

11-14

On the other hand the two managers influence to the employee so the

employee should want to their works in correct way. By using matrix structure

can establish high control and greater supervision throughout the project

period. It may helps to increase project performance and effectiveness.

In matrix structure we can easily get high performance because there is skilled,

ability full and experienced employees come from different functional

departments.

This structure is most effective to achieve overall organizational goals. It leads

to increase job satisfaction, experience and knowledge of the employees.

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PROJECT STRUCTURE

An organizational structure in which employees continuously work on projects

is a project structure. In a project structure has no formal departments to

which employee return at the completion of a project. Instead employees take

their specific skills, abilities and experience to other work project.

In addition, all work activities in project structures are performed by teams of

employees who become part of a project team because they have the

appropriate work skills and abilities.

Project structure tends to be fluid and flexible organizational designs. There is

no departmentalization or rigid organizational hierarchy to slow down decision

making or taking actions.

Ex-: Information Systems build by using project structure, Constructions

Project structure reduces job boredom, because they work different projects,

and less work specialization. Although the matrix structure work well and

continued to be effective structure design choice for many organizations are

using more advance types project structure, in which employees continuously

work on projects. Unlike the matrix structure, a project structure has no formal

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departments to which employees return at the completion of a project.

Instead, employee take there specific skills, abilities and experiences to other

work projects. In addition, all work activities in project structures are

performed by teams of employee who become part of a project team because

they have the appropriate work skills and abilities.

In this types of structures managers serve as facilitators, mentors and coaches.

They “serve the project teams by eliminating or minimizing organizational

obstacles and by ensuring that team has the resources they need to effectively

and efficiently complete their work.

BOUNDARYLESS ORGANIZATIONS

In a boundaryless organization, the boundaries that divide employees such as

hierarchy, job function, and geography as well as those that distance

companies from suppliers and customers are broken down. A boundaryless

organization seeks to remove vertical, horizontal, and external barriers so that

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employees, managers, customers, and suppliers can work together, share

ideas, and identify the best ideas for the organization.

What are the boundaries? Vertical - Boundaries between layers within an organization

Classic Example: Military organization

Problem: Someone in a lower layer has a useful idea; "Chain of command"

Mentality

Horizontal - Boundaries which exist between organization functional units.

Each unit has a singular function.

Problem: Each unit maximize their own goals but not the overall goal of the

Organization

External - Barriers between the organization and the outside world (customers,

suppliers, other government entities, special interest groups, communities).

Customers are the most capable of identifying major problems in the

organization and are interested in solutions.

Problem: Lose sight of the customer needs and supplier requirements Geographic - Barriers among organization units located in different countries

Instead of being organized around functions with many hierarchical levels, the

boundaryless organization is made up of self-managing and cross-functional

teams that are organized around core business processes that are critical for

satisfying customers such as new-product development or materials handling.

The traditional vertical hierarchy is flattened and replaced by layers of teams

making the organization look more horizontal than vertical. Some believe that

the boundaryless organization is the perfect organizational structure for the

21st century.

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Types of boundary less Organizations

Network Organizations

In a network organization, various functions are coordinated as much by

market mechanisms as by managers and formal lines of authority.

Emphasis is placed on who can do what most effectively and

economically rather than on fixed ties dictated by an organizational

chart. All of the assets necessary to produce a finished product or service

are present in the network as a whole, not held in-house by one firm.

Virtual Organizations

The most interesting networks are dynamic or virtual organizations. In a

virtual organization an alliance of independent companies share skills,

costs, and access to one another’s markets. It consists of a network of

continually evolving independent companies. Each partner in a virtual

organization contributes only in its area of core competencies. The key

advantage of network and virtual organizations is their flexibility and

adaptability.

The Modular Organization

A modular organization is an organization that performs a few core

functions and outsources noncore activities to specialists and suppliers.

Services that are often outsourced include the manufacture of parts,

trucking, catering, data processing, and accounting. Thus, modular

organizations are like hubs that are surrounded by networks of suppliers

that can be added or removed as needed. By outsourcing noncore

activities, modular organizations are able to keep unit costs low and

develop new products more rapidly. They work best when they focus on

the right specialty and have good suppliers.

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LEARNING ORGANIZATIONS

The concept of a Learning Organizations doesn’t involve a specific

organizational design. Learning Organizations is an organization that has a

developed the capacity to continuously adopt and change because all

members take an active role in identifying and resolving work related issues. In

a Learning Organizations, employees are practicing knowledge management

continually acquiring and sharing new knowledge and are willing to apply that

knowledge in making decisions or performing works. Some organizational

designs theorists even go so far as to say that an organization’s ability to do

this-that is, to learn and to apply that learning as they perform the organization’s work

may be the only sustainable source of competitive advantage.

In a Learning Organization, it is a critical for members to share information and

collaborate on work activities throughout the entire organization, across

different functional specialties and even at different organizational levels. This

can be done by minimizing or eliminating the existing structural and physical

boundaries. In this type of boundaryless environment, employees are free to

work together and collaborate in doing the organizations work the best way

they can and to learn from each other. Because of this need to collaborate,

teams also tend to be an important feature of a learning organization’s

structural design. Employees work in teams on whatever activities need to be

done, and these employee teams are empowered to make decisions about

doing their work or resolving issues.

With these empowered employees and teams, there’s little need for “bosses”

to direct and control. Leadership plays an important role as an organization

moves to become a learning organization. Leaders should facilitate the

creation of a shred vision for the organization’s future and then keeping

organizational members working towards that vision.

Also organizational culture is an important aspect of being a learning

organization. A learning organization’s culture is one in which everyone agrees

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on a shared vision and everyone recognizes the inherent interrelationship

among the organization’s process, activities, functions and external

environment. In learning organizations, employees feel free to openly

communicate, share, experiment, and learn without fear of criticism or

punishment.

Learning can’t take place without information. For a learning organization to

“learn”, information must be shared among members, that is organizational

members must engage in knowledge management.

BUREAUCRATIC STRUCTURE

A structure with highly routine operating tasks achieved through specialization,

very formalized rules and regulations, tasks that are grouped into functional

departments, centralized authority, narrow spans of control, and decision

making that follows the chain of command.

In large organizations and under well defined conditions, organization

structure may be bureaucratic. The essential elements of a bureaucratic

organization are:

• the use of standard methods and procedures for performing work; and

• a high degree of control to ensure standard performance.

Mintzberg (1981) has identified two types of bureaucracies. They are standard

and professional bureaucracy. Standard bureaucracy is based on efficient

performance of standardized routine work. Professional bureaucracy depends

upon efficient performance of standardized but complex work. Thus, it

requires a higher level of specialized skills. The structure of standard

bureaucracy is based on functions, large technical staff and many mid-level

managers. In contrast, professional bureaucracy has few mid-level managers.

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Director

Admin

Accounts

Personnel

Purchase

Research

Livestock

Seeds

Pesticides

Extension

Consumers

Agri-

Processing

Producers

BUREAUCRATIC ORGANIZATIONAL STRUCTURE

Strengths

• Functional economies of scale

• Minimum duplication of personnel and equipment

• Enhanced communication

• Centralized decision making

Weaknesses

• Subunit conflicts with organizational goals

• Obsessive concern with rules and regulations

• Lack of employee discretion to deal with problems

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PRACTICAL STUDY

OF ORGANISATION

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WATEEN TELECOM

COMPANY’S OVERVIEW

Wateen Telecom UK Ltd embarks on providing leading international voice retail

and wholesale communication services to its esteemed customers through its

ability to seamlessly connect and enable smarter, faster, cost-effective and

flexible solutions.

Wateen continues to build on the heritage of its parent company - The Abu

Dhabi Group. We believe in leadership through people. Our technology and

service-delivery strengths stems from our valued employees who have joined

Wateen from all over the world to earn customer trust and loyalty with a

continuing commitment to the deployment of innovative products and

services, reliable, high-quality service and excellent customer care.

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MISSION STATEMENT

• To provide affordable communication services that meets and exceeds customers' requirements

• To deliver high-quality, flexible and innovative solutions that are cost effective and conducive

• To provide complete customer satisfaction on time, every time

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VISION

To introduce Wateen Telecom in the European and North American markets and provide the leading telecommunications international voice services through a world-class cutting-edge network to deliver a broad range of reliable, affordable and quality customer-centric services.

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CORPORATE VALUES

Simplicity :Practical and easy-to-use

Satisfaction: Customer satisfaction is foremost

Quality : Premier services; no compromises

Innovation : Always at par with the latest technology

Honesty : Practice what we preach: integrity, ethics and open communication

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WATEEN’S ORGANIZATIONAL STRUCTURE

As shown in Figure , Wateen’s organizational structure can be divided into 2

parts: one is Business Units where the sub-units are separated based on

Product Departmentalization, and the Administrative Units are categorized

based on Functional Departmentalization.

Business Units are the "money-making" departments or divisions that are

directly involved with the products of the company; and the Administrative

Units are the departments that coordinate Wateen’s daily business operation

activities.

Wateen

Telecom

Figure : Wateen’s Organizational Structure Chart

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Within the Business Units, there are 8 sub-units:

• QCT (Wateen CDMA Technologies) develops and suppliers CDMA-based

integrated circuits and system software for wireless voice and data

communications, multimedia functions and global positioning system

product.

• QTL (Wateen Technology Licensing) grants licenses to use Wateen's

intellectual property, including certain patent rights essential to or useful

in the manufacturing, sale and use of CDMA-based products.

• QSI (Wateen Strategic Initiatives) makes strategic investments in

ventures that focus on worldwide adoption of 3G wireless

communications technologies (voice and data) and products serving

consumers, the enterprise and all members of the wireless value chain

such as wireless network operators, device and equipment

manufacturers, and application and content providers.

• QIS (Watee Internet Services) provides technology to support and

accelerate the convergence of wireless data, Internet and voice services.

• QWBS (Wateen Wireless Business Solutions) provides companies

around the globe with industry-leading mobility platforms, applications

and services that accelerate business. These products serve a variety of

industries, including transportation and logistics, third-party logistics,

construction, petroleum, retail, food and beverage, and healthcare.

• QTV (Wateen Technology and Ventures) offers the MediaFLO™ system

enabling wireless multimedia services and supports Wateen’s mission of

enabling and fostering CDMA and wireless Internet markets through

strategic investments in privately-owned startup ventures.

• QGOV (Wateen Government Technologies) provides the Unites States

government with secure wireless communications solutions using CDMA,

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Wimax and other Wateen technologies. Through government funded

R&D, QGOV is creating leading-edge security technology with the

development of the QSec®-2700, a 3G secure phone.

• QCTest™ and Deployment Products. Wateen's focus is the creation of

products that ultimately lower licensee and carrier operator costs while

enabling the quickest deployment of the latest technology.

The Administrative Units consist of the following departments:

• Human Resource Department

• Marketing Department

• Financial Department

• Global Development Department Those departments coordinate the company's business operations worldwide and provide necessary resources to the production operations.

CONCLUSION

At first glance, Wateen seems to employ two types of traditional designs in

its structure. One is Functional Structure that applies to its Administrative

Units in which departmentalization is based on the function of the

departments. The other is Divisional Structure which applies to its Business

Units where each division's teams are responsible for performance and have

strategic and operational authority while the top management acts as an

external overseer to coordinate and control the various divisions.

However, Wateen also demonstrates signs of Contemporary Organizational

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Design. By exhibiting the characteristics of a team structure, a design in

which an organization is made up of teams that work toward a common

goal, Wateen was able to provide expertise in every specific field. Also,

characteristics of a Learning Organization are thrown into the mix. Wateen

was named Organization of the Year by the American Society for Training

and Development in 2000. By receiving this award, Wateen demonstrated

that they are a company that builds on learning and development. This

recognition highlights Wateen's commitment to employee development

and their focus on supporting learning with their overall business objectives.

Although Wateen does show some kind of traditional organizational design

characteristics, their website states: "We encourage teamwork while

reinforcing the importance of individuality to enhance our inclusive

atmosphere and to leverage creativity. Despite our rapid growth, we work

hard to avoid the chains of bureaucracy and retain our entrepreneurial, free-

spirited culture," which indicates that Wateen has evolved into a semi-

contemporary organizational design.

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