0. Organisational Structures
Management and Organisational Behaviour
7th Edition
PART 6
Organisational Structures

1. Organisation Structure and Design
Management and Organisational Behaviour
7th Edition
CHAPTER 15
Organisation Structure and Design

2. The meaning of organisational structure
is the pattern of relationships among positions in the organisation & among members of the organisation
allows the application of the process of management
creates a framework of order & command through which the activities of the organisation can be planned, organised, directed & controlled

3. Objectives of structure
The economic & efficient performance of the organisation & the level of resource utilisation
Monitoring the activities of the organisation
Accountability for areas of work undertaken by groups & individual members of the organisation

4. Objectives of structure
Co-ordination of different parts of the organisation & different areas of work
Flexibility in order to respond to future demands & developments & to adapt to changing environmental influences
The social satisfaction of members working in the organisation
Knight

5. Importance of good structure
Good organisational structure does not by itself produce good performance.
But a poor organisational structure makes good performance impossible, no matter how good the individual managers may be. Drucker
The allocation of responsibilities, the grouping of functions, decision making, co-ordination, control & reward are all fundamental requirements for the continual operation of an organisation. The quality of a structure will affect how well these requirements are met. Child

6. The human element
The actual operation of the organisation & success in meeting the business objectives will depend on the behaviour of people who work within the structure & who give shape & personality to it
In an IMD survey, the commitment & involvement of employees ranked second only to top management as a key success factor in restructuring

7. Argyris – a critic of formal organisations
Argyris argues that formal, bureaucratic organisations restrict individual growth & self fulfillment
In the psychologically healthy person, this causes a feeling of failure, frustration, & conflict
He argues that organisations should provide a more authentic relationship for its members

8. The relationship between people & organisations
The operation of the organisation & actual working arrangements will be influenced by –
Style of management
Personalities of members
The informal organisation

9. Levels of organisation
Technical level – involves
specific operations & discrete tasks
the actual job or tasks to be done
the performance of the technical function
Managerial level – involves
the co-ordination & integration of work at the technical level
Community level – involves
broad objectives & the work of the organisation as a whole

10. Interrelated levels of organisation
Figure 15.1
Interrelated levels of organisation

11. Importance of the hierarchy
Authority is & is likely to continue to be less acceptable than in the past. Better educated & more independent people expect to be consulted rather than told what to do. Stewart
The hierarchy is not dead, it has just changed its form. The trappings of power in the modern workplace may have been toned down, but the boss is still the boss. To confuse informality with the end of the organisational pecking order is a mistake. Jebb

12. Examples of purpose & implications for organisational design
Figure 15.2
Examples of purpose & implications for organisational design
Source: Reprinted with permission from Richard Lynch, Corporate Strategy, Third edition, Financial Times Prentice Hall (2003), p.667, with permission from Pearson Education Ltd.

13. Examples of purpose & implications for organisational design
Figure 15.2
Examples of purpose & implications for organisational design
Source: Reprinted with permission from Richard Lynch, Corporate Strategy, Third edition, Financial Times Prentice Hall (2003), p.667, with permission from Pearson Education Ltd.

14. Examples of purpose & implications for organisational design
Figure 15.2
Examples of purpose & implications for organisational design
Source: Reprinted with permission from Richard Lynch, Corporate Strategy, Third edition, Financial Times Prentice Hall (2003), p.667, with permission from Pearson Education Ltd.

15. Basic considerations in organisational structure design
Figure 15.3
Basic considerations in organisational structure design

16. Task functions Developing the goods /services
Manufacturing the goods / services
Marketing the goods / services
Financing the organisation
Basic activities of the organisation related to the actual completion of the production process & directed towards specific & definable end results. Woodward

17. Element functions Supportive of the task functions
An intrinsic part of the management process
Examples include personnel, planning, management services, public relation, etc. Woodward

18. Task & element functions – implications of organisational structure
Failure to distinguish between the two types of functions can lead to confusion in the planning of structure & in the relationship between members of the organisation

19. Division of work by major purpose or function
Figure 15.4
Division of work by major purpose or function

20. Division of work by product or service
Figure 15.5
Division of work by product or service

21. Division of work by location

22. Grouping considerations
Decisions on the methods of grouping will be based on –
The need for co-ordination
The identification of clearly-defined divisions of work
Economy
The process of managing the activities
Avoiding conflict
The design of work organisation taking into account the nature of staff employed, their interests & job satisfaction

23. Centralisation – the advantages
Easier implementation of a common policy for the organisation as a whole
A consistent strategy across the organisation
Prevents sub-units becoming too independent
Improved economies of scale & a reduction in overhead costs
Greater use of specialisation
Improved decision-making

24. Decentralisation – the advantages
Enables decisions to be made closer to the operational level of work
Increased responsiveness to local circumstances
Improved level of personal customer service
More in keeping with developments in flatter & more flexible structures

25. Decentralisation – the advantages
Support services, such as administration, are more likely to be effective if provided as close as possible to the activities they are intended to serve
Provides opportunities for training & development in management
Usually has an encouraging effect on the motivation & morale of staff

26. Principles of organisation
Objective
Specialisation
Co-ordination
Authority
Responsibility
Definition
Correspondence
Span of control
Balance
Continuity

27. Spans of control
The number of subordinates who report directly to a given manager or superior

28. Spans of control Factors influencing the span of control –
Nature of the organisation, complexity of work, range of responsibilities, similarity of function
Ability & personal qualities of the manager
Amount of time manager is available to spend on subordinates
Ability & training of subordinates
Effectiveness of co-ordination & nature of communication
Physical location
Length of scalar chain

29. Spans of control – width
Too wide, it becomes difficult to supervise subordinates effectively & places more stress on the manager & may result in slowness to adapt to change
Too narrow, it may present problems of co-ordination & consistency in decision-making & wider communication across the organisational structure

30. Chain of command
The number of different levels in the structure of the organisation, the chain of hierarchical command
Establishes the vertical graduation of authority & responsibility & the framework for superior–subordinate relationships

31. Individual authority relationships
Line – flows directly down through the structure
Functional – relationship between people in specialist or advisory positions
Staff – arise from the appointment of personal assistants to senior managers
Lateral – exist between individuals in different departments or sections especially those on the same levels

32. Inverted organisations
These place customers at the summit and top management at the base
Will be accompanied by the devolution of power and delegation to the empowered, self-managing workers near the top of the inverted pyramid

33. Matrix organisations The matrix organisation is a combination of –
Functional departments providing the stable base for specialised activities and a permanent location for members
Units that integrate various activities of different functional departments in a project team

34. Poorly designed structures
Lack of design is –
Illogical
Cruel
Wasteful
Inefficient
Urwick

35. Consequences of badly designed structures
Low motivation & morale
Late & inappropriate decisions
Conflict & lack of co-ordination
Poor response to new opportunities & external change
Rising costs
Child