Organizing: The process of assigning tasks, allocating resources, creating operational systems, and arranging activities to implement plans.
Nature of structures
Formal:
- Official structure of organization
- Positions, job titles & lines of authority
Informal:
- Lies behind structure
- Unofficial
- Interpersonal networks of support
Types of structures
Functional structure
- People with similar skills or performing similar tasks are grouped together
- Works well for small organizations
Pros
- Efficient resource use
- Tasks can be assigned more accurately to the areas of skill
- Clear career paths
- Good technical problem solving
Cons
- Poor communication between function groups
- Slow response to change
- Decisions concentrated at the top - delay
- Limited general management training for employees
Devisional structure
- Group people with various skills together who are working on the same product or process
- Common in complex organizations
- Avoids problems of functional structures
Pros
- Fast response, good in uncertain environments
- Expertise focused on a specific customers, products or regions
- Improved cross-functional coordination
- Develops management skills
Cons
- Duplication of resources across divisions
- Less technical depth & specialization
- Less management control
- Competition between divisions for resources
- Emphasis on division goals can be detrimental to organization as a whole
Matrix structure
Each team member reports to both their functional and divisional supervisor. This gives the advantage of both divisional and functional structures.
Pros
- Better interfunctional cooperation
- Flexible
- Better customer service
- More accountability
- Improved decision making
- Develops both generalists and specialists
Cons
- Dual chain of command can make things confusing
- Power struggle between managers
- More meetings and discussion required
- Increased cost of having twice as many managers
Team structures
Specialist teams designed to solve problems or complete special projects, may be temporary or permanent.
Pros
- Reduced barriers among departments
- Quick decisions
- Improved morale
Cons
- Conflicting loyalties
- Many meetings required
Network structures
A central core that operates by interacting with contractors and outside suppliers, at “arms length”.
Pros
- Fewer full time employees and less complex internal systems
- Reduced operating costs
Cons
- Control and coordination problems
- Loss of control
- Little culture
Boundaryless organisations
Eliminates internal boundaries amongst groups and external boundaries with the environment. Combination of team and network structures.
Good organisational design
- Fits well with the goals of the company
- Supports the implementation of strategies
- Supports technologies and allows them to be used to their full extent
- Handles change
- Supports and empowers workers to make the most of their potential
Trends in organisational design
- Shorter chains of command
- Less unity
- Wider spans of control
- More delegation
- Decentralization
- Reduced usage of staff