1 ORGANISATIONAL STRUCTRUE

Driven by global competition and facilitated by information technology, the organizations are modifying the traditional organizational charts and trying out new designs to achieve organizational objectives more effectively. Organizational structure(1) refers to the division of labor (how tasks are formally divided) as well as patterns of coordination, communication, work flow and formal power that direct organizational activities. This(2) reflects the organizational culture and power relationships. Bases of organization structure (1) Work specialization : It is believed that work can be formed more efficiently if employees are allowed to specialize. Work specialization or division of labour describes the degrees to which tasks are subdivided into separate jobs. Work is subdivided into specialized jobs because doing so potentially increases work efficiency, as the performer performs the same repeatedly. This also helps in matching people with specific aptitude and skills to the jobs for which they are best suited. (2) Departmentalization : This establishes a common system of grouping the employees and their activities together. It is the fundamental strategy to coordinate organizational activities because it influences the organizational behavior in the following way : It establishes the common supervision system and formal work teams and typically determines to share the resources as well as the interdependencies among employees and subunits. It creates common measures of performance It encourages informal coordination among people and subunits.

There are five types of organizational structure : (a) Simple structure when companies employ few people and typically often only one distinct product or service with minimal hierarchy. This operates effectively for small organizations but difficult top operate in complex conditions.

2 (b) Functional structure organizes employees around specific knowledge or other resources. This creating the structure on separate functional arrangements like production, marketing, finance, personnel, etc. Advantages of this type are (a) it fosters professional identity and clarify career path, (b)it permits greater specialization, to promote expertise in each area; (c)it facilitate direct supervision, and (d0 it creates, common pools of talents and economy of scale. Limitations are (a) emphasis on subunits goal over the organizational goals, (b)differentiation among work units, and (c) higher dysfunctional conflict. Together these need formal controls and coordination for avoiding its limitations. (c) Divisional structure groups employees around geographic areas, clients or outputs (products/ services). This can be called as strategic business units (SBU), as they are more autonomous than functionals structure

3 Types of divisional structures (a)Geographic structure CEO

European operations

Asia pacific operations

Vs operations CEO

Latin American operations

(b)Product/ service structure

Mines

Corporate affairs

Smelter plant

Captive power plant

Part.

(c)Client structure

CEO

Business Enterprise

Consumer affairs

Knoweldge workers

Software developers

Divisional structure is a building block because it accommodates growth easily. Related products/ clients can be accommodates to existing divisions with little adjustments/ learnings.

But sometimes the structures duplicate and under utilize the resources. Sharing of knowledge becomes difficult. (d) Matrix structure over lays two organizational structures to leverage the benefits of both types, the divisionalized structure and a functional structure.

4 A simple matrix structure President Engineering Marketing Personnel Finance

CEO

Manager project - I Manager pro.II Manager pro.III This is referred as a multiple command system that attempts to combine advantage of both systems avoiding the limitations. Employees have two bosses here two chains of commands : one is functional and another is divisional. The advantages of this type of structure are : (a) efficient means to bring together the diverse specified skills required to solve a complex problem. (b) Reduces problem of coordination (c) Increases effective interaction (d) Gives cost-saving flexibility by avoiding duplication. The disadvantages are : (a) it team members lack the attitude of cooperation (b) problem comes when one project ends the other begins, i.e. problem of rearrangement. (c) If hierarchies are not clearly explained. Now-a-days organizations are neither pure functional or departmental or divisional or matrix organizations but a mixed type. This is because of easier communication system due to development of IT. Boundary liens are least visible. (e) Net work structure is an alliance of several organizations for the purpose of creating a product or serving a client. All satellite connected plants

5 beehived around the core firm which provides one or two competencies (designing new product/ new marketing strategy).

PR at USA Product Development German Call centre India

Core firm

Accounting US

Assembly Mexico

Manufacturing Hongkong

A common database with IT connected plants around binds this type of organization. This also helps in outsourcing activities but connect them though its own core competencies. The advantages of network organizations are (a) they offer flexibility to realign their structure with changing environmental requirements, (b) they offer efficiency because the core firm becomes globally competitive due to computer based information system. But the disadvantage of the system that they expose their core firm (competency) to market forces. The degree of control is not same as in other organizations. However, the structure of organization depends on (a) organizational size large organizations differ in their structure than smaller ones. Standardized work processes, coordinating system, communication, emerging computer technologies, authority system, etc. decide the structure. (b) Technology the process, system and skill of people influence the structure.

6 (c) External environment factors outside the organization, like external stakeholders, customers, competitors, etc. influence the organizational structure. (3) Chain of command : An unbroken line of authority that extends from top to bottom that clarifies the reporting system in the organization. The authority system in the organization explains the right to give direction and expect those to be object The unity-of-command helps in establishing an unbroken line of authority. It states that a person should have only one superior to whom he/ she is directly responsible. Btu this system has become gradually redundant due to It revolution, multiple boss system. (4) Span of control : The number of subordinates a manager can efficiently and effectively direct. It determines the number of hierarchies to be created in an organization. But supervision should not be a constraint rather it should be guidance, empowerment based. This depends on degree of decentralization / centralization of authority system.