Organizational Design, Diagnosis, and Development Session 6 Departmentation, I.

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Presentation transcript:

Organizational Design, Diagnosis, and Development Session 6 Departmentation, I

Objectives To examine functional structure and its effects To review the value of functional groupings To consider departmentation by product, region, & client To review the value of divisional groupings

Functional Structure Grouping by Activity

Effects of Functional Structure Provides for common supervision Defines boundaries for resource sharing Defines local goals & basis for measuring achievement Provides for better internal coordination

Advantages to Functional Structure Foster professional identity Clarify supervisory roles Enhances opportunities for expertise to flourish Provides specialization & expertise to other departments

Disadvantages to Functional Structure Promotes between group differences Sets environment for territoriality & conflicts Makes performance more difficult to trace Makes generalists more difficult to develop

Product Structure Grouping on Product Similarity

Geographic Structure Grouping on Regional Proximity

Client Structure Grouping on Market Similarity

Advantages of Divisional Structure Provides for better coordination between units within division Provides for expansion with control Provides for specialized treatment Allows better control systems Gives more autonomy to management

Disadvantages to Divisional Structure Duplication among departments Reduces specialization Encourages competition among divisions

Backwards & Forwards Summing up: Today we looked at various ways to form groups in organizations from functional to product, regional and client based. With the costs and benefits the costs and benefits were considered. Looking ahead: Next time we’ll consider mixed groupings and multinational forms. As well as dealing with strategic issues in redesign.