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organisational
structure
Factors affecting
Organisation structure
Environment
Strategy
Technology
Size
People
Environment
In implementing the
strategy,organisation structure is
designed according to the needs of
the strategy.
Structure should be utilised for strategy
implementation, because structure is
a means to an end.
The most appropriate end is the very
objectives for which the organisation
exists, which is revealed by the
strategy.
Without coordination between strategy
and structre, the results are
confusion, misdirection etc.
According to Chandler, changes in
strategy bring about new
administrative problems which in
turn require a new refashioned
structure if the new strategy is to
be successfully implemented.
Strategy-Structure
Relationship
Itcan be analysed by considering
various stages of organisational
growth.
Because at each stage,the type of
product, market,size of the
organisation and managerial
problems differ.
Evolution of
organisations
Initial expansion and accumulation
of resources.
Rationalisation of the use of
resources.
Expansion into new products and
business lines.
Development of a new organisation
structure to enable effective
utilisation of resources.
Three types of
Organisation Structure
according to Chandler
Type I
Type II
Type III.
Type I
Territorialdepartmentation is useful
to large organisations having
activities which are physically or
geographically spread such as
banking, insurance, transportation
etc.
Advantages of territorial
Departmentation
Provides efficiency in
operation.
Local factors such as customers,
culture, styles, preferences etc
always affect organisational
functioning.
Knowledge of local conditions is an
important element in effective
management.
Some costs of operations can be
saved.
Problems
Communication
Distance between policy framers and
policy executers.
Co-ordination problems.
Process
Tall
structure is one which fosters
narrow span of management.
More centralised decision making.
Advantages-Close supervision, close
control of subordinates activities,
fast communication between
superior and subordinates.
Flat Structure
Sometimes an organisation`s
structure needs to be
multifocussed in that both product
and function or product and
geography are emphasised at the
same time.
One way to achieve this is through
matrix structure.
Matrix structure is a violation of
unity of command principle.
In matrix structure, a project
manager is appointed to manage a
project and personnel are drawn
from their respective departments.
On completion of the project, these
people may return to their original
departments.
Thus, each functional staff has two
bosses, his administrative head
Strengths and
weeknesses
Strengths Weaknesses
Flexible sharing of human Causes participants to experience
resources
Suited across products
to complex decisions and dual authority,which
Participants need good can be
frequent
Provides changes in unstable
opportunity for both frustrating andskills
interpersonal
Is time consuming.confusing.
and extensive
Involves
environment
functional and product
Best in medium sized skill training
frequent meetings
Will not work andparticipants
unless conflict
development
organisations with multiple resolution
understand
Requires sessions.
it. effort to maintain
great
products. power balance.
Unity of Command