ORGANISATION STRUCTURE An organisation structure defines how activities

ORGANISATION STRUCTURE An organisation structure defines how activities such as task allocation, coordination and supervision are directed towards the achievement of organisational aims. It can also be considered as viewing glass or perspective through which individual see their organisation and its environment.

Organisati onal environme nt technolo gy Determine the design of organisati on structure strategy Human resource

DETERMINING THE KIND OF STRUCTURE ACTIVITIES ANALYSIS RELATIONS ANALYSIS DECISION ANALYSIS

ROLE OF ORGANISATION STRUCTURE ENCOURAGE EFFICIENCY COMMUNICATION OPTIMUM USE OF RESOURCES JOB SATISFACTION CREATIVE THINKING FACILITATES MANAGEMENT

DESIGNING ORGANISATIONAL STRUCTURE Identifying activities Grouping of activities Delegation of authority

CLEAR LINE OF AUTHORITY SPAN OF CONTROL FEATURES OF ORGANISATION STRUCTURE LESS MANAGERIAL LEVELS ADEQUATE DELEGATION OF AUTHORITY

Types of Organisation TRADITION AL MODERN Line Simple Functional Bureaucratic Line and staff Matrix Committee Horizontal Matrix Network Virtual Free form

LINE ORGANISATION It is characterized by direct lines of authority flowing from the top to the bottom of the organizational hierarchy and lines of responsibility flowing in an opposite but equally direct manner. EXAMPLE: As in case of military, commander-in-chief holds the top most position and has the entire control over the army of the country, which in turn is developed into main area commands under major-generals.

FEATURES Authority flows from top to bottom and responsibility flows upward. Every person is in incharge of person working under him. Each subordinate receives orders only from one superior and is answerable to him only. The authority of each person is clearly specified.

MERITS Simplicity Identification of authority Co-ordination Effective communication Economical Quick decisions Unity of command Effective control & supervision Executive development Flexibility

DEMERITS Excess work Lack of specialization Lack of co-ordination Improper communication Lack of initiative Favouritism Instability

FUNCTIONAL ORGANISATION Functional organizational chart is structured with few managers at the top and most people at the bottom, organized by the tasks they performed. The incharge of a function is specialist in it and brings out the best in himself. Every functional area serves all other areas in the organisation

FEATURES q The whole task is divided into different functions q Each functions is performed by a specialist q The functional head is incharge of activities of his functions in the whole organisation q Functional heads operate with considerable independence

ADVANTAGES Ø Specialisation Ø Increase in efficiency Ø Scope for growth Ø Flexibility Ø Relief to top executives Ø Economy of operations Ø Better supervision Ø Democratic control

DISADVANTAGES Ø Conflict in authority Ø Lack of co-ordination Ø Difficulty in fixing responsibility Ø Delay in taking decisions Ø Poor discipline Ø Expensive Ø Group rivalaries

TYPES OF STAFF PERSONAL STAFF The personal staff is attached to individual line officers. Example- Personal Assistant or the private secretary. SPECIALIST STAFF These are technically qualified persons who provide service to the whole organisation. They serve line and other staff in planning organising and coordinating their work. Example – legal advisor GENERAL STAFF This staff consists of a person attached to the key executives. They are attached to important functionaries as their deputies. Example –deputy managers , assistant manager , special assistant etc

ADVANTAGES Specialisation Better discipline Balanced and prompt decisions Growth and expansion Development of employees Lesser burden on line officers Quick actions

LIMITATIONS Conflict between line and staff personnel Lack of responsibility More dependence on staff Lack of co-ordination Ineffective staff expensive

Difference between line and staff Staff thinks , lines do Staff advises , lines perform Staff tells the line what to do , lines tell staff where to go Staff has the authority of line , line have the authority to command Staff has no fixed responsibility , lines have fixed responsibility Staff has no authority over the line and has only power to recommend. Line is responsible for actual execution of work

COMMITTEE FORM OF ORGANISATION A number of persons may come together to take a decision, decide a course of action, advice line officers on some matters, it is a committee form of organisation. Thinking of varied persons is pooled together through deliberations and discussions and common decisions are reached.

Attaching groups to departments for Advice Guidance Business planning Execution

NEED FOR COMMITTEES 1 • It provides forum for exchanging ideas among members 2 • During discussions some useful suggestions and recommendations may generate 3 • It may be needed in establishing and developing organisational policies

TYPES OF COMMITTEES Formal and informal Advisory Line

ADVANTAGES OF COMMITTEE FORM OF ORGANISATION Pooling of opinions Better coordination Balancing of views Motivation Dispersion of power Better acceptance Better communication Executive training

WEAKNESS OF COMMITTEE FORM OF ORGANISATION Delay Lack of effectiveness Strained relations Compromise No accountability Domination by some

How to make committees effective? Reasonable number- The number should be such which is essential for taking collective decisions. In case of a) line committee- 4 to 5 members b) advisory committee- 7 to 8 members Well informed members- the members of committees should be well informed about the areas where they are supposed to take decisions. Effective chairman- The wisdom and tactfulness of the chairman will make the committee purposeful. Clear cut reference- the role of the committee should be clearly spelt out. Proper briefing- The committees should be properly briefed by the concerned executives.

MATRIX ORGANISATION It was introduced in USA in the early 1960 s. It is also known as grid organisation, product or project management. The employee has to work under two bosses i. e. , functional manager and product manager. The authority of functional manager flows downward while the authority of product manager flows across.

ADVANTAGES SOUND DECISION SPECIALISATION OPTIMUM UTILISATION OF RESOURCES DEVELOPMENT OF SKILLS MOTIVATION

DISADVANTAGES INCREASE IN WORK LOAD ABSENCE OF UNITY OF CAMMAND HIGH OPERATIONAL COST COMPLEX

N R E D N O MO I T A S I N A G OR

SIMPLE ORGANISATIONAL STRUCTURE This structure is widely used in small organisations where the owner and the manager are one and the same. It is a flat organisation which has only two or three vertical levels, a small body of employess and individual in whom the decision making authority is centralised.

Manager/ Owner salesman A Salesman B Salesman C Salesman D

Inexpensive Fast and Simple Flexible ADVANTAGES

DISADVANTAGES Suitability Overload at top level Rigid design Slow decision making

Bureaucratic organisation structure A bureaucratic organization structure is one with rigid and tight procedures, policies and constraints. It is very organized with a high degree of formality in the way it operates. Decisions are made through an organized process, and a strict command control structure is present at all times.

FEATURES o Highly routine operating tasks o Very formalised rules o Grouping of tasks into functional departments o Centralised authority o Narrow span of control o Chain of command

Specialisation Economical ADVANTAGES No Biasedness No Need For Experts

Conflicts DISADVANTAGES Rigid Resistance to Change

THE MATRIX DESIGN It is very popular organisational design It is also known as grid organisation, product or project management. The employee has to work under two bosses i. e. , functional manager and product manager. The authority of functional manager flows downward while the authority of product manager flows across.

ADVANTAGES SOUND DECISION SPECIALISATION OPTIMUM UTILISATION OF RESOURCES DEVELOPMENT OF SKILLS MOTIVATION

DISADVANTAGES INCREASE IN WORK LOAD ABSENCE OF UNITY OF CAMMAND HIGH OPERATIONAL COST COMPLEX

HORIZONTAL ORGANISATIONAL DESIGN The horizontal organisational design has been suggested to take advantage of advanced information technology and total quality emphasis. Horizontal structure facilitates Cooperatio n Team work Customer orientation

Frank Ostroff and Douglas Smith are given credit for developing some of the following guiding principles that define horizontal organisational design. 1. Organisation revolves around the process, not the task 2. The hierarchy is flattened 3. Teams are used to manage everything 4. Customers drive performance 5. Team performance is rewarded 6. Supplier and customer contact is maximised 7. All employees need to be fully informed and trained

NETWORK DESIGN Miles and Stone have identified this design as the dynamic network. They describe the network design as “Delayered, highly flexible and controlled by market mechanisms rather than administrative procedures, firms with this structure arrayed themselves on an industry value chain according to their core competencies, obtaining complementary resources through strategic alliances and outsourcing. ”

Miles and his colleagues identified three types of radical redesign organisation Green field • It implies starting from just a clean slate or piece of green field and establishing a totally different design. Rediscovery • Already established companies return to a previously successful design by eliminating unproductive structures. Network • Outsources to upstream or down stream partners who can do a better job.

VIRTUAL ORGANISATION ‘The virtual organisation is a temporary network of companies that come together quickly to exploit fast changing opportunities. ’ The virtual organisation is different from traditional mergers and acquisitions. In virtual organisations the partners share costs, skills and access to international markets.

Features

Free-form organisation q According to WARREN G. BENNIS “Free form organisation is a rapidly changing adaptive , temporary system around problems to be solved by a group of relative strangers with diverse professional skills”. q This model goes beyond traditional bureaucratic model of organisation to find innovative solutions to unique problems. q The management draws experts from various fields to form teams to attain specific objectives. q They are highly result oriented and their success is usually measured in terms of contribution they make.

“Structure does not create extraordinary organisations by collecting extraordinary people. It does so by enabling very ordinary people to perform in extraordinary ways. ”