ADAPTING ORGANIZATIONS TO TODAYS

MARKET
Week 9

Prepared by Management Department

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man@unimedia.ac.id

Organization Structure

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Structuring an Organization Comprises:

Division of Labor Team Tasks Assigning Responsibility/ Authority

Accountability Allocating Resources Establishing Procedures

Fayols Principles of Organization

Unity of Command
Hierarchy of Authority Division of Labor

Degree of Centralization
Clear Communication Channels

Subordination of Order Individual Interest to the General Interest Equity

Authority

Esprit de Corps

Webers Organizational Principles Job Descriptions Written Rules Procedures, Regulations, Policies Staffing/Promotions Based on Qualifications

Centralization (No Delegation)

Advantages
Greater Top-Management Control

Disadvantages
Less Responsiveness to Customers

More Efficiency Less Empowerment Simpler Distribution System Interorganizational Conflict Stronger Brand/Corporate Image Lower Morale Away from Headquarters

Decentralization (Delegate Authority)

Advantages
Better Adaptation to Customer Wants More Empowerment of Workers Faster Decision Making Higher Morale

Disadvantages
Less Efficiency Complex Distribution System

Less Top-Management Control Weakened Corporate Image

Organizational Structures

Tall Organizations
Many Layers of Management High Cost of Management Narrow Span of Control

Flat Organizations
Current Trend

Creation of Teams Broad Span of Control

Span of Control - Narrow

Advantages
More Control by Top Management More Chances for Advancement Greater Specialization

Disadvantages
Less Empowerment

Closer Supervision

Higher Costs Delayed Decision Making Less Responsiveness to Customers

Span of Control - Broad

Advantages
Reduced Costs

Disadvantages
Fewer Chances for Advancement Overworked Managers Loss of Control

More Responsiveness to Customers Faster Decision Making More Empowerment

Less Management Expertise

Departmentalization by Function

Advantages
Skill Development Economies of Scale Good Coordination

Disadvantages
Lack of Communication Employees Identify with Department Slow Response to External Demands Narrow Specialists Groupthink

Departmentalization

By

Product (ex. Publisher)

Function (ex. Manufacturer) By Customer Group (ex. Pharmaceutical) By Geographic Location By Process (ex. Leather manufacturer)
By

Line Organizations

Advantages
Clear Authority & Responsibility Easy to Understand

Disadvantages
Inflexible Few Specialists for Advice Long Line of Communication Difficult to Handle Complex Decisions

One Supervisor Per Employee

Line/Staff Organizations

Line Personnel
Formal Authority Make Policy Decisions

Staff Personnel
Advise Line Personnel Assist Line Personnel

Matrix Organizations

Advantages
Flexibility Cooperation & Teamwork Creativity More Efficient Use of Resources

Disadvantages
Complex Confusion in Loyalty Requires Good Interpersonal Skills & Cooperation Not Permanent

Networking

Real Time Transparency Virtual Corporations

A Virtual Corporation

Accounting Firm

Production Firm

Distribution Firm

Core Firm
Legal Firm Design Firm Advertising Agency

Adapting to Change Empowerment

Restructuring for

Focusing on the Customer

Creating a

Change-Oriented Organizational Culture

The Informal Organization

Inverted Organization Structure

Empowered frontline workers

Support Personnel
Top Mgmt.

thank you
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