Function – employees are grouped according to the function they provide. Key Elements for Proper Organizational Structure. 0000002753 00000 n Divisional Organisational Structure: In this type of structure, the organisation can have different basis on which departments are formed. There are three main types of organization structure. Hierarchical org structure After completing my post graduation I thought to start a website where I can share management related concepts with rest of the people. Hierarchical structures are the most common and have been around the longest. These structures are indicative of: How an organization functions and is managed. 0000001583 00000 n If you enjoy this element of working with people, this factor could be an advantage. Departmentalization by Time. 1. They argued that these factors imposed economic or other constrains on organizations that forced them to choose a certain structure over others. 0000003216 00000 n The hierarchical model is the most popular organizational chart type. With the advice of these specialists, the line managers also become more scientific and tend to develop a sense of objective analysis of business problems. Line Organization (Oldest and Simplest Style) In this type of organization, the line of authority flows directly from top to bottom and the line of responsibility flows from bottom to top in opposite direction. Some of the most common organization structures are: Factors and Employees Role in Organization Culture, Responsibilities of a Sales Manager: The Ultimate Guide, ERP â General Ledger and Accounting Management, Accounts Payable and Receivable, Cost Estimate and Accounting in ERP, How Much Does an ERP System Cost? The authority is embedded in the hierarchical structure and it flows in a direct line from the top of the managerial hierarchy down to different levels of managers and subordinates and further down to the operative levels of workers. This type of departmentalization is used by those organizations that deal differently with different types of customers. For example, the goal of an organization may be to develop a new automobile. trailer – Organization versus Structure – Theories of contingency approach • Internal and external factors • a typology of organizations (Mintzberg) – Types of organizational structures • functional organization (U-form) • divisional organization (M-form, H-form) • matrix organization (matrix-form) • network organization • composite structure examples 0000001268 00000 n Also known as self-contained structures, these departments operate as if these were small organizations under a large organizational umbrella, meeting divisional goals as prescribed by organizational policies and plans. Companies come in different sizes. One of the main disadvantages of the functional design is that it encourages narrow specialization rather than general management skills so that the functional managers are not well prepared for top executive positions. The authority is embedded in the hierarchical structure and it flows in a direct line from the top of the managerial hierarchy down to different levels of managers and subordinates and further down to the operative levels of workers. Greiner sees matrix organization, in which cross-functional teams are used, as a response to growing complexity associated with the organizational growth. Each matrix contains three unique sets of role relationships: (1) the top manager or Chief Executive Officer who is the head and balances the dual chains of command; (2) the managers of functional and project (or product) departments who share subordinates; and (3) the specialists who report to both the respective functional manager and project manager. Also, since line managers are generally occupied with their day-to-day current operations, they do not have the time or the background for future planning and policy formulation. The functional structure is primarily responsible for: 1. 1. For example, the telephone company may have a day shift, on evening shift and a night shift, and for each shift a different department may exist, even though they are all alike in terms of objectives. An example would be the personnel department serving the enterprise by procuring the needed personnel for all departments. These are temporary organizational structures formed for specific projects for a specific period of time and once the goal is achieved, these are dismantled. TYPES OF PROJECT ORGANIZATIONS STRUCTURES Of the several factors to consider when deciding on the design of project organizational structures, especially within an existing organization, the factor that has a significant is the extent of authority and responsibility top management is prepared to delegate to the project manager. On the other hand, it is a rigid form of organization and there is a tendency for line authority to become dictatorial that may be resented by the employees. In this case, the units are formed according to the type of product and it is more useful in multi-line corporations where product expansion and diversification, and manufacturing and marketing characteristics of the product are of primary concern. Organizational structure is partly affected by the firm’s external environment [2-5]. You can sort most types of organizational structures for businesses into one of two general types: hierarchical (sometimes called “mechanistic”) and flat. Similarly, business customers get better attention in the banks than other individuals. They are responsible for accomplishing work on schedule and within the prescribed budget. Hospitals and other public utility companies such as telephone company that work around the clock are generally departmentalized on the basis of time shifts. The decisions are generally decentralized so that the departments guide their own activities. Integrated talent management processes can help you quickly find the best people for … 98 0 obj<>stream © 2020 . The larger the company, therefore, the more detailed its organizational structure will be.To meet organizational needs, different companies embrace different structures as explained below; 3. There are three types of bureaucratic structures: 1 - Pre-bureaucratic structures This type of organizations lacks the standards. 0000005894 00000 n The below image shows a functional org chart with finance, technical, HR and ad… These specialists are basically selected on the basis of task related skills and technical expertise rather than decision-making experience or planning ability. The divisional or departmental organization involves grouping of people or activities with similar characteristics into a single department or unit. (b) Service Capacity: This group provides a service that is useful to the organization as a whole and not just to any specific division or function. Considering how vital an orga… Hierarchical vs flat structures . Completing the project within prescribed technical specifications. Summary HR applications touch upon many processes in an organization. In organization theory, social structure refers to the relations between social … The matrix provides a convenient way for the eight groups to share the skills of the four specialists . Grouping employees and tasks in an organization has a significant impact on organizational behavior and employees. Product Organizational Structure Features: playe Company is organized by specific product type playe Each product has an executive leader who oversees everything related to that product line Advantages: playe Products are organized by category playe There are clear roles, responsibilities and lines of command In such manner, every subordinate knows who to report to. The grouping is done based on a few factors, hence many models derived from this. startxref of organizational structure: functional, product, customer, geographic, divisional, matrix, amorphous, hybrid, and some current ideas that are creating the new, emerging forms—which Matrix organizational design is most useful when there is pressure for shared resources. Four types of common organizational structures are implemented in the real world. There are three types of organizations in terms of project management in a company. Organizational structure vs. organizational design is a clash many companies go through as they grow and expand. If an organization serves different geographical areas, the division may be based upon geographical basis. For example, a company may need eight product groups, yet have the resources only to hire four marketing specialists. If the president and other superiors are benevolent in nature, then the employees tend to consider the organization as a family and tend to be closer to each other that is highly beneficial to the organization. Additionally, a line manager cannot be a specialist in all areas. Describe Each of the Three Major Types of Organizational Structure. For more information, visit the Enterprise Resource Planning homepage. Types of Organizational Structures Functional Structure . The project is clearly defined in terms of objectives to be achieved and the target date for the completion of the project is set. Functional Organizational Structure, one of the most common types of organizational structures, groups individuals by specific functions performed. Such divisions are specially useful for large scale enterprises that are geographically spread out such as banking, insurance, chain department stores or a product that is nationally distributed. Many banks have priority services for customers who deposit a given amount of money with the bank for a given period of time. The functional organization features separate hierarchies for each function creating a larger scale version of functional departments. How flexible or responsive the organization is. 0000002995 00000 n Some good examples of specialists who have been given functional authority in some organizations are in the areas of quality control, safety and labor relations. 0000003292 00000 n 81 18 Departmentalization by Area. Organization Structures It seems that remarkably early in our lives we become familiar with organizational structures. The first and most common is a functional structure. The project managers are generally responsible for overall direction and integration of activities and resources related to the project. An organizational structure defines how activities such as task allocation, coordination, ... Mintzberg's other organization types (for example, the Professional Bureaucracy and the Simple Structure) fall in between these two. Staff specialists are conceptually oriented towards looking ahead and have the time to do strategic planning and analyze the possible effects of expected future events. In the pure line type set-up, all similar activities are performed at any one level. Because of the small size of the company, the line structure is simple and the authority and responsibility are clear-cut, easily assignable and traceable. Discuss the hierarchy of the structure and its relationship to occupational status, length of training, annual income, etc. When the project is completed, these specialists go back to their respective duties. The discipline among employees can be maintained easily and effective control can be easily exercised. xref Organizational Design –a process involving decisions about six key elements: •Work specialization •Departmentalization •Chain of command •Span of control •Centralization and decentralization •Formalization 10 - 4 �j�FF) ��z�%4K���q��:�}���5���ޠ�9�A�P�$��6�yyHf25L��kuj\��Z!7��6�8���#�.���h��T8mk�H����� ;�����Ƃ��XO[A�56^��t�:���Py�l������. (c) Control Capacity: This group includes quality control staff who may have the authority to control the quality and enforce standards. The staff consists of two types: General Staff: This group has a general background that is usually similar to executives and serves as assistants to top management. Other areas of service include research and development, purchasing, statistical analysis, insurance problems and so on. 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