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The organisational structure defines the organisations hierarchy of people and departments as well as how information flows within the organization. The organisational structure determines how and when information is distributed as well as who makes what decisions based on the information available. How job tasks are formally divided, grouped and coordinated.
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The Organisational Structure is important because it ensures that there is an efficient operation of a business and it clearly defines its workers and their functions. The organisational structure also helps define the hierarchy and the chain of command.
Structure helps influence behaviour and relationships of jobs and functions Structure defines recurring activities and processes. Structure provides a purposeful and goaloriented behaviour.
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Develop a clear mission statement for the organization. Focus the organisation structure around the mission statement. The mission statement should include the inter-relationship between workers at every level as well as inspiring innovation and ensuring efficiency.
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TYPES OF STRUCTURES
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Functional structure this kind of organisational structure classifies people according to the function they perform in the organization. The organisation chart for a functional based organisation consists of: Vice President, Sales department, Customer Service Department, Engineering or production department, Accounting department and Administrative department.
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Product structure a product structure is based on organizing employees and work on the basis of the different types of products. If the company produces three different types of products, they will have three different divisions for these products.
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Functional Organizations
FIGURE 3.1
Disadvantages
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In-Depth Expertise
Easy Post-Project Transition
Slow
Lack of Ownership
Teams operate as separate units under the leadership of a full-time project manager.
In a projectized organization where projects are the dominant form of business, functional departments are responsible for providing support for its teams.
FIGURE 3.2
Disadvantages
1. 2. 3.
Simple Fast
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Cohesive
Cross-Functional Integration
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FIGURE 3.3
Weak Form
The authority of the functional manager predominates and the project manager has indirect authority. The project manager sets the overall plan and the functional manager determines how work to be done.
Balanced Form
Strong Form
How important is the project to the firms success? What percentage of core work involves projects? What level of resources (human and physical) are available?
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Types cont..
III. Line and Staff Structure: Line and structure combines the line structure where information and approvals come from top to bottom, with staff departments for support and specialization. Line and staff organizational structures are more centralized. Managers of line and staff have authority over their subordinates, but staff managers have no authority over line managers and their subordinates.
Wednesday, January 15, 2014
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The decision making process becomes slower in this type of organizational structure because of the layers and guidelines that are typical to it, and the formality involved.
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The matrix organizational structure is one in which functional and staff personnel are assigned to both a basic functional area and to a project or product manager The matrix form is intended to make the best use of talented people within a firm by combining the advantages of functional specialization and productproject specialization
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IV MARKET STRUCTURE
Market Structure market structure is used to group employees on the basis of specific market the company sells in a company could have three different markets they use and according to this structure, each would be a separate division in the structure.
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Informal Organisation exists within the formal organisation. An informal organisation is a network of personal and social relationships. People working in a formal organisation meet and interact regularly. They work, travel, and eat together. Therefore, they become good friends and companions. There are many groups of friends in a formal organisation. These groups are called informal organisation. An informal organisation does not have its own rules and regulation. It has no system of co-ordination and authority. It doesn't have any superior-subordinate relationship nor any specific and well-defined objectives. Here in informal organisation, communication is done through the grapevine.
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V GEOGRAPHIC STRUCTURE
Geographic structure large organizations have offices at different place, for example there could be a north zone, south zone, west and east zone. The organizational structure would then follow a zonal region structure.
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Matrix Structures This is a structure, which has a combination of function and product structures. This combines both the best of both worlds to make an efficient organizational structure. This structure is the most complex organizational structure.
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Division of Labour/specialization
This is a process of identifying the specific jobs that need to be done and designing the people who will perform them. Job specialization can occur in 3 different ways: Personal Specialties: occupational and professional specialties e.g. accountants, engineers, scientists.
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Horizontal Specialties: work is divided by the natural sequence order e.g. manufacturing plants divide work into fabricating and assembly. Vertical Specialties: Work is divided along the vertical plane of an organization from the lowest level manager to the highest level manager.
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Delegation of Authority
Process of distributing authority downward in an organisation. Whether an organisation chooses to centralize or decentralize will be guided by: How routine and straightforward are the jobs required decisions? Are individuals competent to make decisions? Are individuals motivated to make the decisions?
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Departmental Bases
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The process of grouping jobs into logical units. The process in which an organization is structurally divided by combining jobs in departments according to some shared characteristics. Functional Departmentalization Geographical Product
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SPAN OF CONTROL
This is the number of individuals who report to a specific manager. Three factors are important in determining optimum span of control:Required Contact Degree of Specialization Ability to communicate
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