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The organizational system @ bec doms bagalkot mba
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The Organizational System
What is Structure?
The degree of complexity, formalization and centralization in the organization.
Complexity is the degree of vertical, horizontal and spatial differentiation in an organization
Formalization is the degree to which jobs within the organization are standardized.
Centralization is the degree to which decision making in concentrated at a single point in the organization
Classical View of Structure
Division of Labour – Specialization; breaking jobs down into simple and repetitions tasks
Unity of Command – a subordinate should have only one superior to whom he or she is directly responsible.
Responsibility - an obligation to perform Line Authority – authority to direct the work of a
subordinate
Classical View of Structure……
Chain of Command – the superior-subordinate authority chain that extends from the top of the organization to the lowest echelon
Staff Authority – positions that support, assist and advise line managers
Span of Control – the number of subordinates a manger can efficiently and effectively divert
Departmentation: grouping of activities on some common basis
Plant Manager
Manger Engineering
Manager Accounts
Manger Manufacturing
MangerPersonal
ManagerPurchase
Departmentation by Function
President
VP (Fuels)VP
(Lubricants & Waxes)VP
(chemicals)
Marketing
Planning
Supply & distribution
Manufacturing
Departmentalization by Product
Manager
Loans FEX SA TDR
Departmentalization by Customer
VP (Sales)
Sales ManagerWestern Region
Sales ManagerSouthern Region
Sales ManagerNorthern Region
Sales ManagerEastern Region
Departmentalization by Geography
Departmentalization by Process
Plant Manager
Cast DepartmentManager
Press Department
Manager
Tube Department
Manager
Finishing Department
Manager
Inspection, packing
& Shipping
Dept Manager
The coming of the New Organization
Rapid and unexpected change Increasing diversity Change in managerial behaviour Adoption to computer technology
The Mechanistic Structure
The Mechanistic Structure……
High horizontal differentiation Rigid hierarchical relationships Fixed duties High formalization Formalized communication channels Centralized decision authority
The Organic Structure
The Organic Structure…..
Low horizontal differentiation Collaboration (both horizontal and vertical) Adaptable duties Low formalization Informal communication Decentralized decision authority
Why do Structures Differ?
Strategy Strategy Structural Option
Innovation Organic: loose structures; low division of labour, low formalization, decentralized.
Cost minimization
Mechanistic: tight control; extensive division of labour, high formalization, high centralization.
Initiation Mechanistic and Organic: mix of loose and tight properties; tight controls for current activities, loose controls for newer undertakings.
Why do Structures Differ?.....
Size Increase in the number of employees results in
High complexity High formalization decentralization
Why do Structures Differ?....
Technology Unit Production
Mass Production
Process Production
Structural characteristics
Low vertical differentiation
Low horizontal differentiation
Low formalization
Moderate vertical differentiation
High horizontal differentiation
High formalization
High vertical differentiation
Low horizontal differentiation
Low formalization
Most effective structure
Organic Mechanistic Organic
Technology…
Non routine
Routine
Craft
Engineering
1 2
3 4
Well-defined
Ill-defined
Task variability
Few Exceptions Many Exceptions
Problem Analyzabilit
y
Technology…A B C D Input Output
A. Long-linked Technology
Client A Client BTransformational
Process
B. Mediating Technology
Resources A B C D
Transformational Process
Feedback
Output
C. Intensive Technology
Why do Structures Differ?.....Environment
Abundant
Scarce
Complex simple
Stable
Dynamic
Three Dimensional Model of the Environment
Why do Structures Differ?...
Power control An organization structure is the result of power
struggle by internal constituencies who are seeking to further their interests
Mintzberg`s five design configurations
The operating core: Employees who perform the basic work related to the production of products and services
The strategic apex: Top level managers who are charged with the overall responsibility of the organization
The middle level: Managers who connect the operating core to the strategic apex
The technosturcture: Analysts who have the responsibility for effecting certain forms of standardization in the organization
The support staff: People who fill the staff units, who provide indirect services for the organization
Basic Elements
Basic Subunits SubunitExample positions from a manufacturing firm.
Strategic Apex: Board of Directors, Chief Executive Officer
Techno structure: Strategic Planning, Personnel Training, Operations Research, Systems Analysis and Design
Support Staff: Legal Counsel, Public Relations, Payroll, Mailroom Clerks, Cafeteria Workers
Middle Line: VP Operations, VP Marketing, Plant Managers Sales Managers
Operating Core: Purchasing Agents, Machine Operators, Assemblers, Sales Persons, Shippers
The Simple Structure
Low complexity Low formalization Centralized authority
The Machine Bureaucracy
High in complexity, formalization and centralization
Key part is technostructure
The Professional Bureaucracy
High in complexity, formalization Low centralization
The Divisional Structure
A set of autonomous units coordinated by central headquarters
The Adhocracy
A structure characterized as low in complexity, formalization centralization
The Matrix Structure Under
graduate
Master’s Ph.D. Research Executive programs
Community service programs
Accounting
Administrative Studies
Economics
Finance
Marketing
Academic departments
Programs
Matrix Structure for a College of Business Administration