ORGANIZATIONAL DESIGN AND STRUCTURE

Business & Organization

Business It means investment for a purpose, products & service, customers, vendors, competition, environment, growth, profitability, ROI etc. Organization It means Vision, mission, strategy, structure, people, systems & processes, policies, rules & regulations, culture, leaders, teams, motivation, morale, hierarchy, grades, designation, reward system, corporate social responsibility etc. Structure creates congruence between the Business and the Organization and facilitates vertical and horizontal integration of Goals, processes, functions etc

ASSUMPTION / BASIC PREMISE FOR ORGANISATION STRUCTURE

Structure which will Support and sustain current business. Absorb & integrate new business / acquisition / New products. Support expansion & growth across different locations. To provide support for Global Supply Chain / Operation, if and when required. Manage & adapt to internal & external environmental change.

ORGANISATION STRUCTURE
This evolving structure should preserve the current advantages of manufacturing, flexibility, value propositions in terms of cost and quality, people competence, autonomy & creativity.

Elements of Organizational Structure

Business Model

Business Objectives (1 yr, 3 yrs, 5 yrs & long-term)

Strategy (What to do & how to do)

Structure

Staffing

Roles, Responsibilities, Objectives, Accountability (RROA)

Performance Review, Evaluation, Feedback, Training, Rewards & Recognition

ANNUAL PLAN / POLICY DEPLOYMENT / PERFORMANCE MANAGEMENT SYSTEM

Company Annual Plan

Policy goals of the department heads

CEO

P
(a).

Execution through the PMS

HODs

Performance Planning (setting individual KRAs/goals of managers )

HOD D
(b). Implementation &Monitoring (like MIS, Coaching and Counselling, periodic reviews and providing feedback )
Managers

(c). Formal Performance Review through PA systems ( Quarterly, half yearly, annually) (through Appraisal / Evaluation process / PRD)

Compensation Review

Reward and Recognition

Counseling

T&D needs identification

P = Plan D = Do

C = Check A = Act

Management Development (Career planning / succession planning) 6

Horizontal integration :-

Horizontal integration means aligning performance management strategies with other HR strategies concerned with valuing, paying, involving and developing people.

Valuing People

Paying & rewarding people

PMS

Developing People

Involving People

Performance management as a focal point for integrated HR activities

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PROCESS BASED ORGANISATION

( Process Matrix )

CUSTOMERS CORPORATE GOALS

ORDER OBTAINMENT GROUP

(Marketing)

ORDER FULFILMENT
(Supply Chain Group)

NEW PRODUCT DEVELOPMENT GROUP

(R&D)

PRODUCT MANAGEMENT GROUP

( 4 Ps Plus Interface with R&D, Field Sales Force, Production, QC, Processing, Packing & Distribution)

PEOPLE DEVELOPMENT PROCESS / PROGRAM

(Performance Management System, Compensation System, Reward Recognition System, Training & Development System)

FINANCE / ACCOUNTING
( Budgeting, Costing, Cash Flow,P & L, Balance Sheet, Taxation )

IT/ ERP
( MIS ,planning system, Order Processing ) 8

4 Ps of Structure

Structure is made up of 4 Ps. They are as below: Position Title / Designation, Level / Grade, Reporting Relationships, Line of authority, Resources / facilities required etc. Process (Part of a big system) Roles, Responsibilities, Objectives & Accountability (Span of control in the process) People Type / Quality of people, Experience, Competence etc. Place Location of the position

Structural Gap Identification Steps: Understanding and mapping the current structure Preparing what structure is ideally required / appropriate vis--vis business strategy, plan, objectives (short-term & long-term) Identify the gap between the two above in terms of 4Ps and manpower ratios (Manager : Supervisor : Workmen) Bridging the Gap
Internal incumbent thru training & development External candidate thru recruitment process

Gap can be partial or full as given below: Position exists but it is vacant Position exists and the current incumbent is not 100% fit in terms of competence Position does not exist and therefore created as per gap analysis10

Mapping the Current Structure

Structure to be mapped up to 3 - 4 levels at least i.e. Top / Sr. Management (Typical Directors / VPs) HODs (Typical GMs / DGMs) Managers (Typical Process / Sub-Process / Line Owners) Supervisors (Shop floor Leaders/Field Leaders)

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How an Organization Creates Value

Organizations Inputs Organization obtains inputs from its environment Raw materials Money and capital Human resources Information and knowledge Customers of service organizations Organizations Conversion Process Organization transforms inputs and adds value to them Machinery Computers Human skills & abilities

Organizations Environment Sales of outputs allow organizations to obtain new supplies of input Customers Shareholders Suppliers Distributors Government Competitors

Organizations outputs Organization releases outputs to its environment Finished goods Services Dividends Salaries Value for stakeholders

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The Relationship Among Organizational Theory and Organizational Structure, Culture, and Design, and Change Organizational Theory The study of how organizations function and how they affect and are affected by the environment in which they operate.

Organizational Structure The formal system of task and authority relationships that controls how people are to cooperate and use resources to achieve the organizations goals. Controls coordination and motivation; shapes behavior of people and the organization. Is a response to contingencies involving environment, technology, and human resources. Evolves an organization grows and differentiates. Can be managed and changed through the process of organizational design.

Organizational Design and Change The process by which managers select and manage various dimensions and components of organizational structure and culture so that an organization can control the activities necessary to achieve its goals. Balances the need of the organization to manage external and internal pressures so that it can survive in the long run. Allows the organization to continually redesign and transform its structure and culture to respond to a changing global environment.

Organizational Culture The set of shared values and norms that controls organizational members interactions with each other and with people outside the organization. Controls coordination and motivation; shapes behavior of people and the organization. Is shaped by people, ethics, and organizational structure.

Evolves as organization grows and differentiates.

Can be managed and changed through the process of organizational design.

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Approaches to Measuring Organizational Effectiveness

APPROACH

DESCRIPTION

GOALS TO SET TO MEASURE EFFECTIVENESS

External resource approach

Evaluates the organizations ability to secure, manage, and control scarce and valued skills and resources

Lower costs of inputs Obtain high-quality of inputs of raw materials and employees Increase market share Increase stock price Gain support of stakeholders such as government or environmentalists

Internal systems approach

Evaluates the organizations ability to be innovative and function quickly and responsively

Cut decision-making time Increase rate of product innovation Increase coordination and motivation of employees Reduce conflict

Technical Approach

Evaluates the organizations ability to convert skills and resources into goods and services efficiently

Reduce time to market Increase product quality Reduce number of defects Reduce production costs Improve customer service Reduce delivery time to customer

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Plant Structure

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Global Matrix Structure

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Global Product Group Structure

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Global Geographic Structure

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A Multidivisional Structure in Which Each Division Has a Different Structure

Link

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The Assignment of Product-Oriented Functional Teams to Individual Divisions

Head

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Multidivisional Structure

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Improving Integration in a Functional Structure by Combining Sales and Marketing

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Building Blocks of Differentiation

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Spans of Control

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Typical forms of Teams in Change Management PAT / CFT Existing Organization Hierarchy Team Elements

Directors / VPs / GMs

Corporate council

Process Action Teams (PATs)

Managers

Support Services

Workforce / staff
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Total Employee Involvement

Mission Strategic Planning New Products
TOP

Quality systems Task Force CFT/SIT QCC Facilitation DRAM QC Circles TEIAN 5S
Effective Communication is the key

Management
MIDDLE

SHOP FLOOR

FACT BASE EFFECTIVE UTILISATION OF PEOPLE POWER

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THANK YOU

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