Organization structure and communication

1. Organization structureand communication Section 4

2. Organizing • the process of establishing relationships among functions, personnel and physical factors. • the process of creating a structure for the organization that will enable its people to work together effectively

3. Organization structure • The structure or patterned relationships among people to accomplish planned activities for the achievement of set goals

4. Organization chart • a diagram of the functions, departments, or positions of an organization and how they are related • shows an organization’s structural skeleton with formal lines of authority

6. Types of organization structure

7. Line organization • direct flow of authority • direct vertical relationships connecting the position at each level • subordinates receive instructions from only one supervisor • suitable for small firms

9. Line-and staff organization • combines the direct flow of authority with staff departments that support • lines functions : directly affect the principal work flow in an organization • staff functions : support activities that provide service to line departments

10. two basic types of staff positions: • personal or general staff • specialist staff • employees receive daily supervision from a line manager and specialized advice from staff

11. commonly used in medium and large sized firms • staff managers also have line authority over subordinates in their own departments • staff authority : the authority that supports, assists and advises holders of line authority

14. Classification by departmentalization

15. Functional organization • A form of departmentalization in which everyone engaged in one functional activity is grouped together into one unit • used mainly by smaller firms • it brings together in one department all engaged in one activity

17. Product/market organization • A type of organization structure where a company is composed of divisions that bring together all those involved with a certain type of product or market. • Also known as divisional organization

18. A division resembles a separate business • each division is accountable for profit or loss • but not an independent entity • 3 types: division by product, division by geography/territory, and division by customer

20. Division by product • Jobs and activities relating to a single product or service are grouped under a division • different divisions for different products of the same company • is logical when each product requires different manufacturing technology and marketing methods

22. Division by geography/territory • Grouping together jobs and activities located in the same place • focus attention on unique characteristics and requirements of particular regions • logical when a plant must be located as close as possible to sources of raw materials or markets

24. Division by customer • Grouping together that serve specific customers or clients • sells most of its products to a particular customer • suitable for organizations with highly diversified lines of products

26. Matrix organization • An organization structure in which specialists from different parts of the organization are brought together to work on special projects • each employee will report to both a function or divisional manager and to a project or group manager

27. A project structure is added to another more traditional structure • a project manager is selected to head the total effort • the project manager is responsible for organizing and coordinating all activities

28. Project members receive instructions from the project manager but maintain membership in their permanent departments • the project group will be disbanded and its members will return to their respective departments

30. Committee organization • in which authority and responsibilities are jointly held by a group of individuals • most large organizations make widespread use of committees within the main organizational structure • committee may be permanent or ad hoc.

31. Advantages and disadvantages of different forms of organizational structure • Line • line and staff • functional • product/market • matrix • committee

32. Factors affecting organization structure • Strategic choices • top management’s philosophy, products and services range, and geographic areas served • functional structure => if only need to respond to pressures from customers • divisional structure => if chooses a wide range of product and.or geographic areas to be served

33. Technology • technology becomes complex =>from traditional to divisional structure • matrix is desirable with advanced technology

34. Environment • complex environment => specialized staff are needed • complex/dynamic environment =>divisional organization structure

35. Size • smaller firms => functional structure • an organization grows => product/market structure • major operations throughout the world =>matrix or divisional structure

36. Principles of successful organization structure • should have objectives • clear lines of authority and accompanying responsibility • min. no. of levels • unity of command => only one supervisor • flexible structure to permit changes

37. Contemporary Organization Design • to examine the firm and its situation => to design a form of organization structure to meet its needs • 2 alternatives : • downsizing • reengineering

38. Meaning of Reengineering • periodically assess all aspects of business • radical redesign of organizational processes to achieve major improvements in costs, quality and speed • reduction of cycle time • forgets the old way of doing things and attempt to build the best system from scratch

39. Role of Information Technology • Reengineering are often accompanied by the use of advanced computer system • technology removes limits to the way employees perform their work • reengineering does not result in any particular organizational form • flattening the structure by reducing no. of managers

40. may require workers to develop a broader range of skills • a long term process requiring major shifts and significant changes in organizational structure

41. Downsizing • the act of reducing the no. of employees • as organization grows, additional management layers will be added • current trend => to reduce the size of corporate staff and middle management to reduce costs

42. Reasons of downsizing • Declining economic conditions, shifts in demand, …. • Advancement in technology

43. Advantages of downsizing • reduction of salaries • to cope with economic recession • to cut expenses by increasing employees’ efficiency • faster decision making, smoother communication and increase in productivity

44. Disadvantages • costs associated with the elimination of jobs • costs associated with training remaining employees • morale will be affected • may result in lower quality

45. Problems raising from downsizing • Financial • less no. of employee • morale

46. Less no. of employees • staff learn to be more flexible to cope with various job demands • automation • job re-design • emphasis on the quality of staff (to keep good staff with attractive incentive programme and better training) • maintain staff morale

47. Methods to maintain morale • more generous compensation • communication and explanation to all staff • help laid off worker to look for other jobs

48. Delegation

49. definition • the act of assigning formal authority and responsibility for completion of specific activities to a subordinate

50. Responsibility • the obligation of a subordinate to perform assigned duties Authority • the power to act and make decisions Accountability • liability of subordinates to accomplish duties