ORGANIZING A process of arranging an organization’s structure and coordinating its managerial practices and use of resources to achieve its goals. An organizational structure is a pattern of relationships through which people under the direction of a given manager pursue common goals.

ORGANIZING cont... Organizational Structures show among other things: Positions in the organization Divisions of work activities Level of specialization Reporting relationships within an organization Link between different functions

ORGANIZING cont... Organizational structures are determined by Strategy People Environment Size

Types of organizational structures Flat structure This is a structure with less formalisation and has its authority centralized in a single person.

flat structure cont… General Manager Employee

flat structure cont… Merits Enhances production since anyone can do anything It makes decision making faster since only one person makes decisions. It promotes interpersonal skills and reduces conflicts since there are no departments Promotes employee loyalty to the company owner. It reduces boredom and monotony since employees vary their duties.

flat structure cont… Demerits Poor decisions are made Discourages innovation Accountability and responsibility is difficult Poor quality products and services It discourages career development since anyone can do anything Equipment can easily be damaged

Functional structure This groups people by common function

Functional structure cont... General Manager Accounting Manager Credit controller Projects Officer Production Manager Artisan A Artisan B

Functional structure cont... Merits Enhances career development and training within departments Makes supervision easier Efficiency in the use of specialised resources

Functional structure cont... Demerits Brings conflicts among departments Employees can be loyal to their own departments. Promotes boredom and monotony since employees will be doing routine duties.

Divisional structure Brings together all the functions involved in a certain type of product or service. Each division resembles a separate business unit and may be self contained.

DIVISIONAL STRUCTURE cont... Managing Director GM Div A Production Manager Procurement Manager GM Div B Marketing Finance

BASIS OF DIVISION Customer based Division is based on the type of customers or Markets being serviced. Merit: high customer satisfaction Demerit: increased costs through duplication.

Basis of division Geographical based Divisions are based on physical location. Merits It lowers costs of operation since costs are for a specific unit. Decentralisation of authority, which attracts quality decisions. Knowledge of local social patterns may help in decision making. It enhances commitment by members. Demerit Lack of control of the organization as a whole.

Basis of division Production process Division is according to the type of process being done, where each process require different skills and specialized equipment merit high specialization in the use of machines and people.

Matrix structure An organization employs or sets aside from within specialist functions when new services or goods are being developed. Some employees are allocated to assist the projects manager.

Matrix structure cont... Projects Manager CEO G.M Div A Finance Marketing Manager Div B Production Procurement Manager Projects Manager

Matrix structure cont... Merits It enhances flexibility as teams can be created, refined and dissolved as needed. Employees can learn new skills from projects members. It motivates employees as they will be identified with end products

Matrix structure cont... Demerits It is costly to implement Encourages power struggles Leads to more discussions than actions It demands good interpersonal skills Creates employee confusion..