Creating effective organizational design (1)
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This document discusses different types of organizational structures. It begins by defining organizational structure and its purpose of ensuring resources are used effectively. It then outlines traditional structures like simple, functional, and divisional structures, providing their advantages and disadvantages. The document also discusses the matrix structure that combines product groups and geographical units. It notes international operations influence the structure a firm adopts based on strategy, product diversity, and foreign sales dependence. Finally, it introduces boundaryless organizational designs that replace traditional structures, listing barrier-free, modular, and virtual organizations.
Creating effective organizational design (1)
- 2. Traditional Forms of Organizational Structure • Organizational Structure refers to formalized patterns of interactions that link the tasks, technologies, and people of a firm. • Structure are designed to ensure that resources are used most effectively toward accomplishing an organizations mission. • Structure provides managers with a means of balancing two conflicting forces: a need for division of tasks into meaningful groupings and the need to integrate such groupings in order to ensure organizational efficiency and effectiveness. • Structure identifies the executive, managerial, and administrative organization of a firm as well as indicating responsibilities and hierarchical relationships.
- 3. Patterns of growth of large Corporations Strategies leading to new structure Dominant growth path for U.S firms
- 8. Functional Structure Advantages Disadvantages •Pooling of specialists •Differences in functional area enhances coordination and orientation impede control communication and •Centralized decision making coordination. enhances an organizational •Tendency for specialist to perspective across functions. develop short term •Efficient use of managerial perspective and narrow and technical talent. functional orientation. •Functional areas may overburden toplevel decision makers. •Difficult to establish uniform performance standards
- 13. Divisional Structure Advantages Disadvantages •Increases strategic and •Increased cost incurred operational control, through duplication of permitting corporate-level personnel, operations, and executives to address strategic investment. issues. •Dysfunctional Competition •Quick response to among divisions may detract environmental changes. from overall corporate •Increased focus to products performance and markets. •Difficulty in maintaining •Minimized problems uniform corporate image. associated with sharing •Overemphasis on short-term resources across functional performance. areas. •Facilitates development of general managers.
- 14. MATRIX STRUCTURE use to combine products groups and geographical units.
- 15. Matrix Structure Advantage Disadvantages •Increases market responsiveness •Dual reporting relationships can through collaboration and synergies result in uncertainty regarding among professional colleagues. accountability. •Allows more efficient utilization of •Intense power struggles may lead to resources. increased levels of conflict. •Improves flexibility, coordination and •Working relationships maybe more communication. complicated and human resources •Increases professional development duplicated. through a broader range of •Excessive reliance on group responsibility. processes and teamwork may impede timely decision making.
- 16. INTERNATIONAL OPERATIONS: IMPLICATIONS FOR ORGANIZATIONAL STRUCTURE
- 17. 3 major contingencies that seem to influence the structure adopted by firms with international operations. The type of strategy that is driving a firm’s foreign operations Product diversity The extent to which a firm is dependent on foreign sales.
- 18. The primary types of structures to manage a firms international operations: International Division Geographic-area Division Worldwide Functional Worldwide product Division Worldwide Matrix
- 19. Boundaryless Organizational Design Replace the traditional forms of Organizational structure.
- 20. 3 different types of boudaryless Organization Barrier-free Organization Modular Organization Virtual Organization
- 21. Thank you
Editor's Notes
- #20: Does not imply that all internal and external boundaries vanished completely. Although boundaries may continue to exist in some form, they become more open and permeable.