Organizational Structures Organizing Organizational Structure The formal structure

Organizational Structures

Organizing Organizational Structure The formal structure of task and reporting relationships Organizational Design The process by which managers make specific organizing choices that result in the construction of a particular organizational structure

How do Managers Design a Structure How to group tasks into individual jobs How to group jobs into functions and divisions How to coordinate and allocate authority in the organization among jobs, functions, and divisions Whether to pursue a more formal or flexible structure

Job Design The process by which managers decide how to divide tasks into specific jobs how does Mc. Donald’s divide up their workers? How does Subway divide up their workers?

Organizational Chart You are the President of “Colonel By Enterprises” and you have to organize the following employees. On a separate sheet of paper, draw an organizational chart. • VP of Marketing • Prod’n Mgrs for 3 Product Lines • Director of Personnel • Admin Ass’t to President • VP of Production • R & D dept of 150 people • VP of Finance • Sales Force of 100 people • Mkt’g Mgrs for 3 regions • Production Force of 500 People • VP of R & D • Quality Control Officer

Why Do We Have Org Structures? As organizations get bigger there is a greater need for information because: volumes of work are higher the organization is increasingly multi-directional more of the work is done in a non-standardized way As organizations get bigger there is greater differentiation, which means: increased task specialization attitudes, values, beliefs skills, experiences

Why Do We Have Org Structures? The worse the informal relationships the larger the organization or sub-unit the further the physical distance between subunits

Functional Structure CEO Administration Human Resources Finance Marketing Research Production Sales Plant A Plant B

Product Structures CEO Buick Admin Function Production Plants Cadillac Admin Function Production Plants GMC Admin Function Production Plants

Matrix Structure General Manager Project A Team 1 Team 2 Administration Finance H. R. Project B Production Team 1 Team 2 Plant A Plant B Project C Team 1 Team 2 Marketing Mkt Res Sales

Geographic Structures CEO Central Region Admin Function Finance Northern Region Admin Function Finance Southern Region Admin Function Finance

Market Structure CEO Large Business Customers Admin Function Finance Small Business Customers Admin Function Finance

Structural Forms of Organizations Type of Org Functional Benefits Promotes integration within functions, simple Promotes integration Production within and across functions, but only as they relate to products/markets/etc. Problems Hinders integration between functions Hinders integration between products/markets/etc. and within functions in the total organization Duplication of resources Matrix Structure Dual focus on product/market/etc. and on functions High tension, Diffused focus, Requires high levels of skills

Positions Within an Organization Chairman of the Board Chief Executive Officer President Vice President Finance Marketing Administration Production

Corporate Governance The system of control and performance monitoring of top management They are formally charged with ensuring that an organization operates in the best interest of the owners of the company – (the shareholders) Board of Directors is selected Chosen because of their selective expertise

Board of Directors their Job Establish polices for company Review performance of CEO Approve annual budget Set salaries and compensation of company management

Chairman of the Board CEO/President VP - Marketing VP - HR VP -Operations