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Learning Objective 1
Understand the relationship between organizational structure and culture
Types of organization and associated structures Organizational culture Diagnosing behavioral problems Perception Significance and nature of individual differences Individual Behaviour at work
Organizational structure
Business organizations are characterized by division of labor
Provide
opportunities
for
monitoring
organizational
performance Ensure accountability of individuals Guarantee co-ordination between the different parts of the enterprise Provide an efficient and effective means of organizational communication Create job satisfaction, including opportunities for progression Adapt to changing circumstances brought about by external and internal developments
Organization chart
Designates the formal pattern of role relationships, and the
Line relationships
Staff relationships Functional relationships Lateral relationships
Line relationship
Staff relationship
They are created when senior personnel appoint assistants who normally have no authority over staff but act as extensions to superiors
Functional Relationships
Are those between specialists (or advisors) and line managers and their subordinates. E.g.. when a specialist provides a common service throughout the organization but has no authority over the users of the service.
Lateral Relationships
Exists between individuals holding equivalent positions. E.g. HODs, section leaders, MDs etc.
Classification of organizations
By function
Associated particularly with departmental structures Individuals responsible for a particular service or product are grouped together Based on geographical criteria By particular skill or method of operation E.g. children, the disabled, the elderly etc.
By product
By location
By common process
By client group
Functional Organization
Managing Director
Production Manager
Marketing Manager
Finance Manger
Sales
Marketing Research
Advertising
Advantages: Simple in nature Development of function Provide a recognized path for career progress
Disadvantages:
Organization by Product
Managing Director
Product A
Product B
Product C
Product D
Product E
Production Manager
Marketing
R&D
Finance
In case of division of work and the grouping of activities is dictated by the product or service such that each group is responsible for a particular part of the output.
Disadvantages:
Group Functions (E.g. Finance) Commercial division (board) Components Davison (board)
A divisional structure is formed when an organization is split up into a number of self-contained business units, each of which operates as a profit center. Such a division may occur on the basis of a product or a market or combination of the two, with
Advantages:
Allows each part to function semi independently in producing and marketing its products Allows the organization to produce products according to local needs. Disadvantages: Conflict of interest between the central and divisional units Tends to become too costly
Matrix Structure
Head of Business School
Head of Marketing
Head of Economics
Head of HRM
Head of Finance
Project Teams:
A project team is a temporary organization that is established to
Disadvantages May involve duplication of resources Give rise to logistical and scheduling problems
Virtual Organization
Organizational Culture