ORGANIZATIONAL STRUCTURE
An organizational structure specifies the different work
tasks and shows how they are formally divided , grouped and coordinated.
Provides a framework for the relationship of authority. Indicates the hierarchy
of authority and dependency relations . It is a means to help management to
achieve the objectives of the organization.
Since the objectives of the organization are derived from
the overall strategy of the organization, it is logical that the organization
structure is closely linked to its strategy. Therefore, if management makes a
significant change in the strategy of the organization, the organizational
structure has to be modified to accommodate and support change . There is
considerable evidence to indicate that the choice of organizational strategy (
Strategy Strategy / Stability and Growth ) is determined by three basic factors
( contingency factors ) : ( i ) the size of the organization, ( ii ) the
technology used by the organization ( for the conversion of the financial
statements, human and physical resources into products and services ) , and (
iii ) the uncertainty of the environment ( external environment ) .
Information technology and globalization have had an
enormous impact on organizational structures . The result has been that the
vertical structures (height ) are being replaced by horizontal structures
(flat) , organizations with mechanistic structures are becoming those with the
organizational structure . New forms of organizational structure that have
emerged are: team work, virtual network structures limit less. The salient
features of these and other organizational structures are briefly described
here to present an overview of the different types of organizational structure
and their suitability in different situations.
VIRTUAL ORGANIZATION ( network structure )
A virtual organization is a small organization , the core
that outsources major business functions . It is highly centralized , with
little or no departmentalization .
The virtual organization creates network relationships with
other organizations / agencies anywhere in the world to the outsourcing of
functions such as manufacturing, distribution , marketing, R & D , etc.
(Figure 1 ) . The network is made through electronic technology.
Therefore, the associations between the virtual organization
and other organizations (companies far ) are based on electronic contracts .
The partners are less permanent , less formal and more opportunistic . Each
partner brings to the virtual organization of their basic skills . Managers of
virtual organizations spend most of their time in coordinating the various
activities through the network. Examples of virtual organizations include Ford
, Harley Davidson , Nike , Rebok , Mobil Corp. , IBM , etc.
The main advantages of a virtual organization are:
1. Through the virtual organization can create " best
of all " organization , as each partner brings its " core competence
" .
Two . A virtual organization allows a person with an
innovative idea and little money to compete successfully with larger companies.
This is possible due to the flexible nature .
The main disadvantages of the virtual structure are:
1. Reduces management control over key parts of its
business, and
Two . The reliability of the partners may be doubtful .
ORGANIZATION borderless
Chairman of General Electric, Jack Welch , coined the term
boundaryless organization . The boundaryless organization seeks to eliminate
vertical and horizontal boundaries within the organization and to break down
external barriers between the company and its customers and suppliers. Once
management eliminates the vertical limits , the structure of the organization
is more like a silo of a pyramid.
To break the vertical limits , management adopts the
following strategies:
i . The hierarchical creation of multidisciplinary teams (
including senior executives , managers , supervisors and operational staff ) ;
ii . Promote participatory decision making and
iii . Using performance appraisal 360 degree ( peers and
others above and below the employee evaluate his / her performance ) .
To reduce barriers to horizontal boundaries , management
adopts the following strategies:
1. Replacing functional departments with cross-functional
teams and the organization of activities around processes ;
Two . Using lateral transfers , and
Three . Rotation of people in and out of the different
functional areas .
The outer limits can be reduced through practices such as
strategic alliances , customer links and telecommuting organization (especially
with network equipment ) .
The main advantages of boundryless organization are:
1. Fosters teamwork among employees;
Two . It ensures rapid communication within the organization
( communication within the organization) and between the organization and
customers and suppliers ( communication between organizations ) , and
Three . You can help competitiveness in the global economy .
The main drawback of this form of organization is that it is
difficult to pinpoint the relationship between superiors and subordinates in
the organization.
Inverted pyramid
Organizations with this type of structure puts customers at
the top and give them the most important role in leading the company. Frontline
employees , such as sales representatives, responsible for help-desk , etc.
that are in direct contact with customers are also given a similar position.
The Executive Director of the organization is in the bottom of the structure
(Figure 2 ) . Thus, in this form of organization , the role of management
changes from one to one support command .
Some of the advantages of the inverted pyramid are:
1. This structure gives preference to clients. Therefore, it
becomes easy for the organization to know "choices , and to develop
appropriate strategies to ensure customer satisfaction and customer
Two . In this form of organization, employees are given more
responsibility and authority that senior management .
A major disadvantage of the inverted pyramid refers to the
formulation of strategies. The first line supervisors are not quite ready to
formulate strategies for the organization . This leaves sufficient reason
within the organization to doubt about their capabilities to appropriate
strategies.
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