13-12-2011

ORGANIZATIONAL STRUCTURES

Presented byAnusha Adhikar

Vidya Dhamija BBA 1 Semester

DEFINING ORGANIZATIONAL STRUCTURE

It defines authority, responsibility, and unity of command.

Organization structure helps to achieve organizational goals by grouping jobs, defining relationship between positions as well as who takes the responsibility in organization.

It describes each of the five forms of departmentalization

The formal arrangement of jobs within an organization.

FORMS OF DEPARTMENTALIZATION

Functional structureDivisional structureHybrid structureMatrix structureVirtual structure

FUNCTIONAL STRUCTURE

FUNCTIONAL STRUCTUREGrouping activities on the basis of the

functions of an organization is called functional departmentation.

The decision making is centralized at the top of the organization.

It is widely and easily used by those organizations which deals with one product.

ADVANTAGES

Specialisation – each department focuses on its own work.

Accountability – someone is responsible for the section.

Clarity – know your and others’ roles.

Co-ordination.

Closed communication could lead to lack of focus.

Departments can become resistant to change.

Gap between top and bottom level.

ADVANTAGES AND DISADVANTAGES

DISADVANTAGES

DIVISIONAL STRUCTURE It is suitable for medium sized to big

companies, expanding geographically or on customer base.

PRODUCT

CUSTOMER

GEOPRAPHI-CAL

DIVISIONAL

PRODUCT STRUCTURE

PRODUCT STRUCTUREIt is suitable for extremely large, complex

and multi-product organization .In this division requires the organization’s

work to be divided on the basis of its product.

Each division is responsible for its own performance and profitability.

It is based on output of the organization.With the divisional structure, each product

department has its own functional specialties.

ADVANTAGES

Clear focus on market segment helps meet customers’ needs.

Positive competition between divisions.

Better control as each division can act as separate profit centre.

Performance can be compared and analyzed

Co-ordination at high level is reduced.

Duplication of functions (e.g. different sales force for each division).

Negative effects of competition.

Lack of central control over each separate division.

Problem in decision-making and control.

ADVANTAGES AND DISADVANTAGES

DISADVANTAGES

GEOGRAPHIC DIVISION

Corporate office

Northern division

Eastern division

South west division

Canadian division

International division

GEOGRAPHIC DIVISIONS

It is common organization that operates over wide geographical area such as banking, insurance, transportation firms.

In this activities are grouped area-wise into zones, divisions, sections and branches on the basis of the distinct needs, tastes and facilities in a country.

ADVANTAGES

Serves local needs better.

Positive competition.

More effective communication between firm and local customers.

Conflicts between local and central management.

Duplication of activities and functions at different region.

ADVANTAGES AND DISADVANTAGES

DISADVANTAGES

CUSTOMER DIVISION

CUSTOMER DIVISIONS

The activities are grouped according to the customers the organization serves.

With this division, each department contains individuals who perform the necessary functions for a specific type of customer.

ADVANTAGES

Customers’ needs and problems can be met by specialists.

Beneficial for organization that serves diff. type of customer.

Limited view of organizational goals

Special treatment is required from various customer department .

Special facilities and manpower for certain customer group may be under employed.

ADVANTAGES AND DISADVANTAGES

DISADVANTAGES

HYBRID STRUCTURE

HYBRID STRUCTUREIt is form of departmentalization that adopts

both functional and divisional structure at the same level of management.

This structure is adopted to derive the benefits of economies of scale, and efficiency in resource utilization while the divisional structure is created to focus on product and services.

This structure have greater staff authority when compared to the divisional structure.

ADVANTAGES

Achieve a specific competency and economics of scale in functional areas with a focus on product , service and market.

Facilitates adaptability and flexibility in handling diverse product and services.

Develop large staff in the corporate level .

In case , it require co-ordination between a division and a corporate functional department may be slow to respond .

ADVANTAGES AND DISADVANTAGES

DISADVANTAGES

MATRIX STRUCTURE

MATRIX STRUCTUREMatrix organization is also referred to as a

grid organization or project or product management organization.

It can be termed both functional and divisional at the same time.

It has two chains of command- horizontal and vertical

ADVANTAGES

It facilitates decentralization

Of decisions.Brings horizontal co-

ordination.Effective use of human

resources.Individual become

specialist in two areas(function and product).

Administration cost are higher.

Individual reports to two bosses so they are unclear .

Individual engrossed with maintaining good relations.

ADVANTAGES AND DISADVANTAGES

DISADVANTAGES

VIRTUAL STRUCTURE

An organization that consists of a small core of full-time employees and that temporarily hires specialists to work on opportunities that arise.

Thank you