Organisation structures2

UNIT-IIORGANISATION AND DESIGNING OF ORGANISATION STRUCTURES

INTRODUCTION:

“Management is a process involving planning, organizing, directing and controlling human efforts to state of objectives in an organization.”

The second phase of management process is organizing, which basically involves analysis of activities to be performed for achieving organizational objectives, grouping these activities into various division, departments and sections so that these can be assigned to various individuals and delegating them appropriate authority so that they are able to carry on their work effectively.

CONCEPT OF ORGANISATION AND ORGANISING:

In management literature, sometimes the term organisation and organizing are used inter changeably because the term organisation is used in many ways. But it is not correct organisation is different from organising. Organising is one of the functions of management where as organisation refers to the institution where in the functions of management is performed.Organising is a process of –

Determining, grouping and structuring the activities.

Creating rules for effective performance at work.

Allocation necessary authority and responsibility.

Determining detailed procedures and systems for different problems areas such as coordination, communication motivation etc.

The ultimate result of organising is organisation. In other words, organising function ends with creating a structure of relationships.

FORMAL AND INFORMAL ORGANISATION:Formal organisation refers to the structure of well-defined jobs, each bearing a definite authority, responsibility and accountability.

CHARACTERISTICS:

Organisation structure is designed by the top management to fulfill certain requirements.

Coordination among members and their control are well specified through process, procedures rules etc.

Organisation concentrates more on the performance of jobs and not on the individuals performing the jobs.

Informal organisation refers to the natural grouping of people on the basis of some similarity in an organisation. “It refers to people in group associations at work, but these associations are not specified in the blue print of the formal organisation, the informal organisation means natural grouping of people in the work situations”.

CHARACTERISTICS:

Informal organisation is a natural out come

at the work place.

Informal organisation is created on the basis of some similarity among its members. The basis of similarity may be age, place of origin, caste, religion, liking/disliking etc.

Membership is an informal organisation is voluntary.

Behavior of members of the informal organisation is coordinated and controlled by group norms and not by the norms of formal organisation.

Organisation Principles

Traditional organisation theorists developed certain principles of organisation as guided to thinking in organising. These principles are intended for universal application to all enterprises and cooperative efforts in different fields. The most important of these principles can be listed under the following heads:

Consideration of ObjectivesCombination of Line and Staff FunctionsDivision of Labour or SpecialisationDepartmentation

N. Durga Chaintay Prasad M.Com, M.B.A(site) Management Science Note 1

DecentralisationPrinciple of Scalar ChainPrinciple of Span of controlPrinciple of Unity of CommandPrinciple of BalancePrinciple of FlexibilityAuthority and Responsibility

Consideration of Objectives

Objectives are helpful in determining the activities and the structure itself. Once objectives are clearly defined, the organiser can conveniently proceed to group activities, delegate authority to individuals to whom activities have been assigned, and coordinate their efforts for better results.

Combination of Line and Staff FunctionsOrganisation structures are usually of line, staff and functional types. Line structure is part of every organisation. The staff and functional types are modifications of the structure. Staff and functional structures never exist from a combination with line structure.

Division of Labour or Specialisation F.W. Taylor applied Division of labour principle at the operation level and displayed how efficiency could be increased by breaking down jobs into single repetitive tasks performed on specialised tools.

Departmentation Departmentation is concerned with grouping the various activities into separate administrative units. It implies grouping of activities and employees into departments.

DecentralisationThis principle is having greater importance in the organisation, especially to large enterprises. One important implication of decentralisation is delegation of broad authority and decision making power to the semi-autonomous units.

Principle of Scalar Chain The vertical dimension of organisation structure consists of levels of authority arranged in a hierarchy from the chief executive at the top to the first line supervisor at the bottom. In organisations, the scalar chain rep[resents graduations of distributed authority.

Principle of Span of controlThe idea of span of control is related to the horizontal dimension of an organisation structure. Span of control refers to the number of subordinated reporting directly to the executive.Principle of Unity of CommandA business organisation must have a single head in who all authority and responsibility is concentrated. One employee should receive orders from one superior only. There should not be losses to one subordinate because it will lead to divided responsibility and escapism.

Principle of BalanceThis principle implies that each area and function of an enterprise should operate with equal effectiveness in making its allotted contribution to total purpose. The idea of balance applies to organsiation structures as well as to functions and process.

Principle of FlexibilityOrganisation is created to accomplish certain goals. Both the environment and the individuals comprising the organisation are constantly in flux. To cope with these changes and yet reacfh its objectives, an organisation must be sufficient amount of flexibility.

Authority and ResponsibilityAuthority may be defined as the power to make decisions which guide the actions of another. It is a relationship between two individuals, one superior, other subordinate

Responsibility is defined as that obligation of an individual to carry out assigned activities to the best of his ability. It is not merely duty that is assigned but an obligation that the duty is performed

SPAN OF MANAGEMENTThe grouping of activities to create various departments presents another problem, that is, how many individuals should be placed under one superior. This problem is related to the horizontal dimension of an organisation structure. It is called Span of Control, Span of Supervision. It refers to the number of subordinates that should be placed under single superior. The number of subordinates who report to superior has two important implications.


It determines the complexity of individual manager job.It determines the shape or configuration of the organisation.

The classical writers suggest that between 3 to 8 subordinates as ideal depending up on the level of management.

Determination of Span of Management

V.A.Gracuna a French management consultant has suggested a mathematical formula to fix the number of subordinates.

He classified superior and subordinate relationship into the following:

Direct single relationship. Direct group relationship. Cross relationships.

Direct single relationship:- Direct single relationships arise from the direct individual contacts of the superior with his subordinates. Ex:- A,B,C are subordinates to X Here three single relationships.

Direct group relationships:-Direct group relationships arise between the superior and subordinates in all possible combinations. Thus the superior may consult his subordinates with one or more combinations.Ex:-A with B,B with C,A with C, etc..

Cross relationships:- Cross relationships arise because of mutual interaction of subordinates working under the common superior , such as A and B,B and C,A and C,C and A etc.. The relationship is quite different between A and B than B and A from management point of view because the type of interaction will be different in both cases.

Gracuna suggest that most ideal span for a manager is 6 subordinates with 222 relationships. He was given formulae to find out various relationships with varying number of subordinates being n, the number of various relationships will be as follows

Direct single relationship= nDirect group relationships= n(2n-1-1)Cross relationships= n(n-1)

Total relationship=n(2n/2+n-1)

This formula suggests that while the number of subordinates increases in geometrical progression.

Types of SpanTypes of Span is divided into two types

Wider SpanNarrow Span

Wider Span of management lead to flat orgnisation whereas narrow span of management result in term orgnisation structure.

A narrow span leads to many levels in the organisation and thus require a large number of managers. This is team leads to larger expenses in the form of executive remuneration. Narrow spans also reduce opportunities for management development. Too many levels hardly allow for delegation of any real authority and greatly limit the supervisor to a very few activities at lower levels. Supervision of too many people as the other hand can also to trouble. Supervision will become less effective because the manager will not have sufficient time and energy to attend to each of his subordinates.

Factors The basic idea behind limiting the span of management is to enable a manager top manage his subordinates effectively. It is important for specifying the span of management. The factors are

Capacity of superiorCapacity of subordinateNature of workDegree of decentralizationDegree of planning Communication techniqueUse of staff assistance Supervision from others

Capacity of Superior:Each manager has different ability and capacity in respect of such factors as leadership, decision making, control and communication etc. affecting management of subordinates. He should have capacity in respect of these factors.


Capacity of subordinate:Capacity of subordinates also affects the degree of span of management. Efficient and trained subordinates may discharge their functions more efficiently without much help of their superior. They just need broad guidance and rest of the things can be performed by them. So manager has to go for wider span. If it is reverse go to narrow span.Nature of work:Nature of work affects the degree of span of management because different types of work require different patterns of management and hence time from superior. If subordinates are performing similar functions, they require less attention of their superior and span can be wider. Type of technology usage also affecting the span of management.

Degrees of Decentralisation:Centralisation results in manager having less time to spare for supervising on the other hand, manager operating under decentralized set-up is relieved of much of the burden of making programmed decision and can afford to supervise relatively a large number of subordinates.

Degrees of planning:Higher is the degree of plans, particularly standing plans clearly providing rules, procedures, methods etc, in doing the work, higher would be the degree of span of management. In such cases the subordinates can take actions on their own.

Communication techniqueThe pattern of communication, it means and media affect the time requirement in managing subordinates and consequently span of management.

Use of staff assistance Use of staff assistance in reducing the work-load of managers enables them to manage more number of subordinates. Many of the managerial functions can be discharged by these staff personnel on behalf of the managers, they collect information, process communication and issue orders and instruction on behalf of their superior. This process saves time of managers and the degree of span can be increased.

Supervision from othersIt is not very uncommon that a subordinate receives supervision from several other personnel besides his direct superior. In such a case, the work load of

direct superior is reduced and he can supervise more number of subordinates.

Departmentation

Departmentation is the first real task in designing an organisation structure is the identification of activities and to group them properly. The process of grouping the activities is commonly known as departmentation. The term used to denote the departments that result from departmentation vary a great deal.

Departmentation is useful for specialisation and fixation of responsibility. Departmentation helps in the developments of managers. Development is possible because of two factors. Focusing on main problems and identifying training requirements etc. managerial performance can be measured when the area of activities can be specified and standards in respect of these can be fixed Departmentation provides help in both these areas.

Departmentation concept is arise based on the organisation functions. These functions are two types. They are

Basic functions andSecondary functions.

Besides basic and secondary functions, large organisations may also require some functions to be performed which will be helpful for the basic functions. Such functions may be referred to as staff or service functions which provide help to basic functions.

In terms of the level at which it is done the process of departmentation may be divided into the following three stages

1. Primary departmentation (Initial break-up of functions into basic activities)

2. Intermediate departmentation (creating departments in the middle levels of the organisation)

3. Ultimate departmentation (i.e. dividing activities into separate units at the lower level)

Pattern used in Departmentation:Several patterns of departmentation are prevalent in the business world. The most common are


grouping by functions products, territories, process customers or by time.

Departmentation By FunctionDepartmentation by Product or servicesGrouping by location or TerritoriesDepartmentation by timeGrouping by process and equipmentGrouping by customers

Departmentation by Functions:If refers to grouping of activities of the

enterprise into major functional departments. With the growing complexity of administration, departmentation by function by functions has become widely accepted and increasing by popular.

Departmentation by functions e.g. Production, Marketing, Finance and H.R etc. are the most widely used basis for grouping activities into administrative units and found in almost every enterprise at same levels or the other. This is illustrated in the following figure.

Functional departmentation represents a very natural and logical way of grouping different activities of the enterprise. Functional departmentation facilitates coordination within the function.

Functional departmentation tends to make the functional executives so much conscious of their respective functional areas that the business as a whole very often remain out of the sight of those executives.

Departmentation By Product or ServicesWhen activities associated with each

product or group of closely related products are combined into relatively autonomous and integrated units within the overall frame work of the company, such an organisation is described as product

departmentation. Under this arrangement an executive is put in charge of all the activities relating to a product or product line and enjoys extensive authority over production, sales, development, service and other functions pertaining to that particular product, place of location of product unit is irrelevant here. Product departmentation is illustrated here

Product departmentation enjoy the advantage of specialized product knowledge and promotes coordination of different activities connected with a particular product

Grouping by location or Territories:When activities of the enterprise are

physically or geographically dispersed, providing it with local administration desirable and at times requires in the interest of efficiency and economy in operations, such an organization is viewed as territorial departmentation it may be mention that grouping by location signifies adaptation to local needs and facilitates prompt actions.

Departmentation by TimeMost of us are familiar with the “second

shift’ or the night shift concept. When operations extend far beyond the normal work period of an individual it may well be spread over certain shifts. Such a grouping is frequently termed as departmentation by time. Enterprise engaged in continuous process e.g. public utilities, restaurants and many others departmentalize by times as a normal arrangement. Grouping by time is more common with production function of the enterprise.


Grouping by process and equipmentsActivities may also be grouped into different departments on the basis of process involved or equipment used. Such as grouping is usually resorted to in a manufacturing concern. Thus, a cotton textile unit may have separate units for spinning, weaving, dyeing, inspection and shipping. Better supervision, optimal use of equipments, specialization and avoidance of investment in duplication are the important contribution of such departmentation

Centralisation and DecentralisationCenatralisation and decentralisation are not

absolute terms. There are varying degrees to which authority can be centralised or decentralized. Thus absolute centralisation or decentralisation implies no organsiation.Centralisation:

Centralisation refers to the tendency to withhold a larger part of formal authority at higher authorities of management in the hierarchy. Thus larger number of decision and more important of them are made by those occupying higher positions in the organisation.

Advantages of centralisation (Limitation of Decentralisation)

Uniformity of policy and procedure can strictly be enforced since decision and controls are largely centralised

Centralisation helps to eliminate overlapping or duplicated activities and thus effects sufficient cost savings

Centralisation helps in fuller utilization of talents of outstanding executives for enterprise as a whole

Centralisation ensures consistency of operating and uniformity of decision and consequently, helps retain substantial control over activities of the enterprise.

Decentralisation:

Decentralisation refers to the systematic effort to delegate to the lowest levels all authority except that which can only be exercised at central points. Decentralisation is concerned with the placement of authority with reference to responsibility.

Advantages of Decentralisation (Limitations of Centralisation)

Decentralistion makes for quick decision and by pushing decision making closest to the situations improve quality of the decisions.

Decentralisation helps to improve effectiveness of managers. Development of self-reliant managers is encouraged

Democratization of management. Decentralisation provides actual work

experience to a large number of managers and thus creates a reservoir of promotable managerial manpower

Improved morale of personnel is another great advantage of decentralisation.

Factors determining the Degree of Decentralisation:Both centralisation and decentralisation have their relative merits and limitation. Decentralisation is not an easy process

Importance and significance of the decision:One of the significant factors determining the degree of decentralisation is the costliness of decision. Normally decisions which are costly in-terms of money value involved or in-terms of factors like goodwill and image of the establishment, employee morale or motivation tend to be centralised at the upper levels of management.

Size of the enterprise:There is no denying the fact that larger the firm, the more decisions to be made inviting number of departments and levels, the harder it is to coordinate them. The size of the orgnisation should be so determined that department or units are easily manageable with authority considerably decentralized.

Management attitude and philosophy:Decentralisation is largely a question of character of top executives and their attitude.


People with rational managerial temperament believe participatory approach and opt of decentralisation.

Control techniques:Though decentralisation helps quick decision and enhances individual initiative, proper control techniques should be adopted to follow policies for good corporate governance.

Availability of Capable Managers:Availability of capable executives substantially determines the nature and extent of dispersal of authority and responsibility.

External Factors:External factors like governmental policies, unionization and union involvement, competitive situation also exist certain influence as the mode of decentralisation.

CONCEPT OF ORGANISATION STRUCTURE:

Organisation structure is the pattern of relationships among various components or parts of the organisation. This prescribes the relationships among various activities and positions. Since these positions are held by various persons, the structure is the relationships among people in the organisation. There are different types. They are

Line organisation structure Functional organisation structure Line and Staff Organisation structure Committee Organisation structure Matrix organisation Structure Virtual organisation structure Cellular organsiation structure Team organsiation structure Boundary less organsiation structure Inverted pyramid organsiation structure Lean & Flat organsiation structure

LINE ORGANISATION STRUCTUREIt is also known as scalar, military, or vertical organisation and perhaps is the oldest form. In this form of organisation managers have direct responsibility for the results: This concept holds that in any organisation or hierarchy derived from a scalar process, there must be a single head who

commands it. The line organisation can be designed in two ways.

1. PURE LINE ORGANISATION:Under this form, similar activities are performed at a particular level. Each group of activities is self – contained unit and is able to perform the assigned activities without the assistance of others

2. DEPARTMENTAL LINE ORGANISATION:Under this form, entire activities are divided into different departments on the basis of similarity of activities. Each department is placed under one departmental superintendent. All persons in the department are subject to control by the departmental head. The basic objective of this form is to have uniform control, authority and responsibility.

Line organisation have following characteristics.

Line authority and instructions are vertical, that is, they flow from the top to the bottom.The unity of command is maintained in a straight and unbroken line.All persons at the same level of organisation are independent of each other.


This structure specifies responsibility and authority for all the positions limiting the area of action by a particular position holder

Merits of Line of Line organsiation:1. Simplicity2. Discipline3. Prompt Decisions4. Orderly Communication5. Easy Supervision & Economical

Simplicity:This is organisation is quite simple in both understanding and implementation. Every person is clear about what is expected of him. one person is receiving orders and instruction from only one superior.

Discipline:Since each position is subject to control by its immediate superior position, often the maintenance of discipline is easy, unity of command and unity of direction foster discipline among the people in the organisation

Prompt decision:Most of the decisions in such organsiation are taken by the superiors concerned, ,this makes the decision making process easier and less time consuming.

Demerits:1. Lack of Specialisation2. Absence of Conceptual Thinking3. Autocratic Approach4. Problems of coordination5. Lack of ground work for subordinates

trainingLack of Specialisation:The line organisation does not offer scope for specialisation. A manager has to perform a variety of functions which may not necessarily be closely interrelated. The result is that he cannot make a very valid decision for all requirements in the organisation.

Absence of conceptual thinking:The managers in this system do not find time for conceptual thinking so essential for organisational growth and development because they remain quite busy in their day-to-day managerial problems. Many time a manager involved non-managerial functions also which not only hamper their

efficiency but leave little scope, whatever so, for concentrating on long-term problems of the organisation.

Autocratic approach:The line organsiation is based upon autocratic approach. The line of authority being direct, demands high level of obedience on the part of initiative on their part. This may also result into one-way communication, that is only downward.

Problems of coordination:Coordination among various activities and the departments is achieved through horizontal relationship, whereas the line organisation stresses only vertical relationship. Thus there are acute problems of coordination, particularly in a large orgnisations.

Suitability:- It is suitable to small – scale organizations where the number of subordinates is quite small.

FUNCTIONAL ORGANISATION STRUCTURE:-

It is the most widely used organization structure in the medium and large scale organizations having limited number of products. This structure emerges from the idea that the organization must perform certain functions in order to carry on its operations.Functional structure is created by grouping the activities on the basis of functions required for the achievement of organizational objectives. For this purpose, all the functions required are classified into basic, secondary and supporting functions according to their nature & importance.

Functional structure is created by grouping the activities on the basis of functional required for the achievement of organisational objectives. For this purpose all the functions required are classified into basic, secondary and supporting functions according to their nature and importance.FEATURES:

1) The whole activities of an organisation are divided into various functions

2) Each functional area is put under the charge of one executive


3) For any decision, one has to consult the functional specialist

4) Limited span of control is there.

MERITS DEMERITS*Planned specialization*Facilitates large scale production*Disciplinary controls are well defined*Offers clear career paths

*calls for more coordination*no clear line of authority*slow decision makinglack of responsibility

Advantages:

High SpecialisationClarity in functioningNo duplicationSatisfactionsControl and Coordinate

High specialisation:

Functional structure can result into high degree of specilisation because a department is concerned only with one aspect of total activities. Thus the organisation can employ greater variety of skills.

Clarity in Functioning:

Functional structure brings order and clarity in the ordanisation by prescribing what one is expected to do. Everyone understands his job clearly which adds to efficiency

No Duplication:

There is a economy in the use of organisational resources because various units of the orgnisation use the centralised resources of a line, thus, there is no duplication of activities and processes which save resources.

Satisfaction:

It promotes promotional achievement as a person is restricted to his own area of specialisation. Thus, it provides satisfaction to specialists.

Control and Coordination:There is high degree of control and coordination of functions because all work of one kind is under one manager. Also there is a cleat chain of command for communication and authoritative decisions, however, from total organisation’s point of view; this poses problems in control and coordination.

Disadvantages of Functional Organisation Structure:

Functional organisation structure essentially generates slow decision making process because the problem requiring a decision has to go to various departments as all of them have something to say on the matter.

Functional structure lacks responsiveness necessary to cope up with new and rapidly changing work requirements.

Functional organisation structure offers usually line and staff conflicts and interdepartmental conflict.

Suitability:The establishment of functional organisation structure becomes necessary as a small organisation grows and business activity becomes more and more complete. Top management will continue to control decision that involves strategic and coordinative variables.

LINE AND STAFF ORGANISATION

It refers to a pattern in which staff specialists advise line managers to perform their duties. When the work of an executive increases its performance requires the services of specialists which he himself cannot provide because of his limited capabilities on these matters. Such advice is provided to line managers by staff personnel who are generally specialists in their fields. The staff people have


the right to recommend, but have no authority to enforce their preference on other departments.

FEATURES:- This origin structure clearly distinguishes

between two aspects of administration viz., planning and execution.

Staff officers provide advice only to the line officers; they do not have any power of command over them.

The staff supplements the line members.

MERITS: It adds functional specialists to the pure line

organisation and thus aims at combining the merits of the two.

The stability and discipline of the line organisation are preserved only the specialist is added

It brings expert knowledge to bear upon management. Functional specialists provide expert advice to the management on wide-ranging matters.

It provides for better placement and utilization of personnel and leads to more skill development

DEMERITS The line and staff relationship often lead to

numerous frictions and Jealousies Line mangers may depend too much on staff

experts and thus lose much of their judgment and initiatives

The staff experts may remain ineffective because they do not get the authority to implement their recommendation.

Line & Staff Concepts Criticized:

The behaviorists point out how staff people originally conceived of as helping the line personnel tend to be regarded as source of interference than a source of help. Staff specialists who are most competent to make decisions relating to their respective areas of specialty are deprived of the opportunity to do so. There are also those who suggest that line-staff concept is obsolete, and have questioned the wisdom of, what they call slavish adherence to the line-staff concept.

Conflicts between Line & Staff:Ideally, line and staff should work together in harmony and as an integrated team. But, more frequently line and staff relations become potent sources of friction, inefficiency and organisational ill health. Rivalry between them very often takes the form of animosity. Both line and staff have their own view points to offer relating to this problem.

Line View point: Staff undermines line authority Staff think in vacuum Staff steals Credit Staff fails to keep the line informed Staff fails to give the sound advice to line

Line personnel enjoy authority to command and act to achieve enterprise goals. Staff is expected to give advice. Failure to recognize this and frequent encroachment by staff over line authority and prerogatives become the cause of friction.Staff Point of View:

Lack of authority to command line subordinates

Resistance to change by the line Inability to make proper use of staff

Allured by the special skill and ability in a particular field the staff is tempted to think that the solution to the problem recommended by him is best and needs be enforced on the line manger. Line is also charged with being short-sighted and resistant to change

Minimasation of Conflict:Line and staff are a matter of authority

relationship having a direct bearing upon the organisational health. If in an organisation, line and staff work as an integrated team, organisational efficiency and effectiveness is


bound to improve. But even under the best of circumstances possible of conflict cannot altogether be eliminated, since cooperation cannot be forced: rather people be persuaded to cooperate. Coordination and cooperation between line and staff can be ensured under the following conditions.

Line and Staff should understand their proper position in the organsiation. Staff should know that advising the line is their exclusive function. Similarly a line executive enjoys authority to common and is directly responsible for accomplishing enterprise objectives. Thus, proper understanding of their respective role and relationship in the organsiation structure will go a long way to minimize the conflict between line and staffLine should be educated and encouraged to use staff effectivelyStaff should realize that resistance to change is partly natural. They should therefore, work for overcoming resistance to change. Staff should work as the assumption that it has to sell new ideas. Line executive should be encourage to participate in the proposed scheme of changeStaff should realize that it commands respect and reputation in the organisation due to its skill and expert knowledge in a particular field. Thus, staff should constantly strive to acquire and increase its proficiencyStaff should render complete advice on the problem concerned. They should present realistic recommendations and solution based on full consideration of all the pertinent facts

SUITABILITY:It can be followed in large organizations where specialization of activities is required, because it offers ample opportunities for specialization.

MATRIX ORGANISATION STRUCTURE

Matrix organisation structure is essentially a violation of unity of command and therefore, whole classical concepts related to the principle of unity of command are violated. Matrix structure is the realisation of two-dimensional structure which

emanates directly from two dimensions of authority. Two complementary structures – pure project structure and functional structure are merged together to create matrix organisation structure. It shows many organisations overlap not only in-terms of command but also in-terms of common system but also in terms of whole organisational processes and behaviour. For example

It is also called project organization. It is a combination of all relationships in the organization, vertical, horizontal and diagonal. It is a mostly used in complex projects. The main objective of Matrix organisation is to secure a higher degree of co-ordination than what is possible from the conventional, organizational structures such as line and staff.

Design of Matrix Organisation StructureIn matrix organization structure, a project manager is appointed to co-ordinate the activities of the project. Personnel are drawn from their respective functional departments. Upon completion of the project, these people may return to their original departments for further assignment. Thus each functional staff has two bosses his administrative head and his project manager. During his assignment to a project, he works under the coordinative command of the project manager and he may be called upon by his permanent superior to perform certain services needed in the project. Thus, a subordinate in matrix structure may receive instructions from two bosses. Therefore he must coordinate the instructions received from two or even more bosses. Similarly matrix superior has to share the facilities with others. He reports in a direct line to the up, but does not have a complete line of command below. The structure is


Merits 1. It offers operational freedom & flexibility 2. It focuses on end results. 3. It maintenance professional Identity. 4. It holds an employee responsible for

management of resources.

Demerits:-1. It calls for greater degree of coordination,2. It violates unity of command.3. Difficult to define authority &

responsibility.4. Employee may be de motivated.

SuitabilityIt can be applicable where there is a pressure for dual focus, pressure for high information processing, and pressure for shared resources.Ex:- Aerospace, chemicals, Banking, Brokerage, Advertising etc..,

COMMITTEE ORGANISATION A committee does not represent a separate type of organization like line and staff, or functional. It is rather a device which is used as supplementary to or in addition to any of the above types of organizations. A committee may be defined as a group of people performing some aspects of Managerial functions. Thus, a committee is a body of persons appointed or elected for the Consideration of specific matters brought before it. it is having limited scope in activities. Members of the committee have authority to go into the details of the problems. This authority is expressed in terms of one member one vote. It means may be drawn from various departments.

Definitions:

“A committee consists of a group of people specifically designated to perform some administrative work” W.H. Newman

“ A committee is a body of persons appointed or elected to meet on an organised basis for the consideration of matters brought before it.

Allen

Objectives: To give participation & representation to

different group To co-ordinate the activities of different

departments To review the performance of certain

units To facilitates communication & co-

operation among diverse groupsTypes of Committees:

Formal & Informal Committees:Formal Committees are formulated on the basis of organisation policies. It is a part of the organisation. They are shown on the organisation chartInformal committees are not formulated by the management. When any problem is arised in the organisation the employees informally meet and discuss about it.

Executive Committee:Whenever committees are vested with line authority. They are called executive committees. They are not only take decision but also enforce decision. An executive committee has authority to make & execute decision

Advisory committee:It will give advice to line heads on certain issues. These committees have no managerial powers & cannot exert their views on line executives. They have only recommendatory role.Ex: Sales Committee, Finance Committee, Work Committee etc.Standing or Adhoc Committee:It is for indefinite period of time. Adhoc Means Temporary


Line Committee It is having administrative power. It help in planning the company policies. These committees also direct & control the activities of employees for achieving organisation goals

MERITS DEMERITS

*Pooling of Knowledge*Effective co-ordination is available*Effective Communication*Motivation through participation of employees

*Slow decisions*Most Expensive*Difficult to maintain secrecy*Compromise

Boundary Less Organization:-

Problems with traditional organizational structures:-

1. Slow/poor in responding customer requirement.

2. Failure to get things to done.3. Customer/vendor has a hard time dealing

with the organization.4. Lack of flexibility to changing mission

needs/rapidly changing World

What are the boundaries? Vertical: Boundaries between layers

within an organization. Horizontal: Boundaries which exist

b/w organizational departments. External: Barriers between the

organization and the outside world. (Customers, suppliers other govt. committees).

Geographic: Barriers among organization units located in different countries.

Problem:-isolation of innovative practices & ideas.

What is boundary less Organisation?It may be defined as an organisation structure that can avoid all the barriers (vertical, horizontal, external, geographic) much more permeable than they are now;Boundary less organisation allows free flow of ides/information / resources throughout the organisation and into others.

A boundary less organisation is the opposite of a bureaucracy with numerous barriers and division. In contrast, the organisation without boundaries offers interaction and networking among professionals inside and outside the organisation. The organisation model is fluid and highly adaptive, much like an open system in biology.

Jack Welch, former CEO of General Electric, stated his vision for the company as a “boundary-less company”. By this he meant an “open, anti-parochial environment, friendly toward the seeking and sharing of new ideas, regardless of their origin.” The purpose of this initiative was to remove barriers between the various departments as well as between domestic and international operations. To reward people for adopting the “integration model,” bonuses were awarded to those who not only generated new ideas but also shared them with others.


Organisation structures2

Education

Transcript of Organisation structures2