1. 1 Organizational structure and design ? An organization is a collection of people working together in a coordinated and structured fashion to achieve one or more goals. Organization A consciously coordinated social unit, composed of two or more people, that functions on a relatively continuous basis to achieve a common goal or set of goals A social arrangement for the controlled performance of the collective goals

2. 2 Organizational structure and design ? Social arrangements: Organizations are collection of peoples and machines in a structured way Organization Collective goals: Existence of organizations depend up achievement of common goals Controlled performance: Controlled performance means deliberate allocated on resource between organization members which includes: Resource allocation Control function

3. 3 Organizational structure and design ? Organizations are strongly influenced by the people that form part of them. Organizations can take in part of the personality of the people within them and their attitudes, perceptions and behaviors affect how an organization will operate. Organization and people Organizations exist to allow accomplishment of work that could not be achieved by people alone. As long as the goals of an organization are appropriate, society will allow them to exist and they can contribute to society Organization’s Role in Society

4. 4 Organizational structure and design ? Together they achieve what cannot achieve individually Overcome environmental and biological limitations Increase productively due to: Work specialization / division of labour Exchange Synergy: Together we grow better Increased knowledge development and enhancement Transaction – cost economies approach to organization: Saving in time Reduce cost Why organizations exist?

5. 5 Our lives become, for better and for worse, a society of organizations. We are born in organizations and are educated in organizations that we can later work in organizations. At the same time, organizations supply us and entertain us, they govern us and harass us. Finally we are buried by organizations (Henry Mintzberg). Images and perception of organizations Organizational structure and design ? 1.Organizations are machines 2.Organizations are biological organism 3.Organizations are human brains 4.Organizations are cultures or subcultures 5.Organizations are sub systems 6.Organizations are political systems 7.Organizations are psychic prisons 8.Organizations are systems of change and transformation 9.Organizations are instruments of domination Images/Metaphors of 0rganizations: Gereth Morgan

6. 6 Organizational structure and design ? By ownership: Private, private By control: Managers, trustees Activity: Retailer, manufactures, hospital Legal structure: Partnership, company Objective: Commercial, non commercial Accountability Source of finance: Debt, equity Region: National or international Classification of organizations

7. 7 Organizational structure and design ? Business organizations Non business organizations Basic Classification of organizations Business organizations Definition: Legal Capital Profit objective Types : Sole - proprietorship Partnership Company Activities: Manufacturing Mining Energy Retailing Services Services are intangible Services are inseparable Services are heterogeneous Intellectual production

8. 8 Organizational structure and design ? Public organizations Non profit organizations Non business organization Public organizations Definition: Run by government Capital Non-profit objective Diverse nature Types : Regulatory bodies Health institutions Educational institutions Policy making bodies Etc Characteristics Accountable to parliament Command resources Base on fairness Equality Resource based not price based Basic Classification of organizations

9. 9 Organizational structure and design ? Public organizations Non profit organizations Non business organization Non profit organizations Definition: Formed for purpose Capital Non-profit objective Public service Types : Clubs Trade unions Associations Charities Professional association Basic Classification of organizations

10. 10 Types of organizational structure ? An organization that is low in specialization and formulization but high in centralization This Organization reflects the owner as president with all employees directly reporting to him An organization that is low in specialization and formulization but high in centralization This Organization reflects the owner as president with all employees directly reporting to him Simple Structure

11. 11 ADVANTAGESDISADVANTAGES Helps top management in coordinating and controlling the entire organization to follow a uniform strategic direction Clarifies the roles/responsibilities and what is expected of each employee Allows each department to focus on its own work / activities Provides clear accountability at both the departmental and individual level Creates a rigid and slow moving organization Leads to a loss of innovation and innovation thinking as employee become more process oriented (focused on following correct procedures and protocol) rather than results oriented Does not allow for sharing of information / ideas across departmental lines (which is viewed as being especially important in today’s knowledge economy) Plant Manager Manager Engineering Manager Engineering Manager Accounting Manager Accounting Manager MIS Manager MIS Manager Human Resources Manager Human Resources Manager Purchasing Manager Purchasing An organization in which similar and related occupational specialties are grouped together Functional Structure Types of organizational structure ?

12. 12 Manufacturing Supply and Distribution Planning and Economics Marketing Vice President Lubricants And Waxes Vice President Lubricants And Waxes Vice President Fuels Vice President Fuels Vice President Chemicals Vice President Chemicals President Manufacturing Supply and Distribution Planning and Economics Marketing Manufacturing Supply and Distribution Planning and Economics Marketing An organization made up of self-contained units Divisional Structure Types of organizational structure ?

13. 13 ADVANTAGESDISADVANTAGES Places responsibility at a lower level Places emphasis on local markets and problems Improves coordination in a region Takes advantage of economies of local operations Better face-to-face communication with local interests Furnishes measurable training ground for general managers Requires more persons with general manager abilities Tends to make maintenance of economical central services difficult and may require services such as personnel or purchasing at the regional level Increases problem of top management control Engineering Western Region Southwest Region Production Accounting Sales Personnel Central Region Southeast Region Eastern Region Marketing Personnel Purchasing Finance President Types of organizational structure ? ------------------- An organization in which activities in a given area or territory be grouped and assigned to a manager An organization in which activities in a given area or territory be grouped and assigned to a manager Geographical Structure

14. 14 ADVANTAGESDISADVANTAGES Enables an organization to be more aligned with the needs of its customers Promotes innovation and innovative thinking as the organizational culture becomes more focused on problem solving / meeting customer needs than following processes and protocol Individual departments can become too autonomous which makes setting and coordinating a single strategic direction to be followed difficult It limits the sharing of information / ideas across the organization lines (which is viewed as being especially important in today’s knowledge economy) President Community-City Banking Community-City Banking Real Estate & Mortgage loans Real Estate & Mortgage loans Corporate Banking Corporate Banking Agricultural Banking Agricultural Banking Institutional Banking Institutional Banking Types of organizational structure ? An organization in which activities reflect a primary interest in customers Customer based / Product Structure

15. 15 Strategic Business Units (SBUs) Project Structure Matrix Structure Virtual Structure1 Strategic Business Units (SBUs) Project Structure Matrix Structure Virtual Structure1 Modern Organization Designs Types of organizational structure ?

16. 16 Modern Organization Designs Chief Strategy Officer (CSO) Chief Strategy Officer (CSO) Chief Executive Officer Chief Finance Officer (CFO) Chief Finance Officer (CFO) Chief Operating Officer (COO) Chief Operating Officer (COO) Chief Information Officer (CIO) Chief Information Officer (CIO) VP of Human Resources VP of Human Resources VP of Marketing VP of Marketing Adhesive Packaging Division Adhesive Packaging Division Industrial Products SBU Consumer Products SBU Tubes / Cores Division Tubes / Cores Division Paper Division Paper Division Reels Division Reels Division Flexible Packaging Division Flexible Packaging Division High Density Film Division High Density Film Division Metal Ends Division Metal Ends Division Rigid Division Rigid Division The SBU structure groups similar division into business units and delegates authority and responsibility for each unit to a senior executive who reports directly to CEO Strategic Business Units (SBUs)

17. 17 Engineering Quality Control Quality Control Manufacturing Purchasing R & D Contract Administration Contract Administration Scheduling Project A Engineering Quality Control Quality Control Manufacturing Purchasing R & D Contract Administration Contract Administration Scheduling Project B General Manager General Manager An organization in which activities require a great deal of planning, research and coordination An organization in which activities require a great deal of planning, research and coordination Project Structure Modern Organization Designs

18. 18 Modern Organization Designs An organization in which specialists from functional departments are assigned to work on one or more projects led by a project manager An organization in which specialists from functional departments are assigned to work on one or more projects led by a project manager Matrix Structure Head of Design Function Head of Design Function Head of Engineering Function Head of Engineering Function Head of Purchasing Function Head of Purchasing Function Head of Construction Function Head of Construction Function Project Manager Project Manager Project Team Project Manager Project Manager Project Manager Project Manager

19. 19 Logistics Company Core Company Manufacturing Company Sales and Marketing Company Finance Company Design Company An organization in which a very few activities are carried out and as much as possible work is carried out by other organizations An organization in which a very few activities are carried out and as much as possible work is carried out by other organizations Virtual Structure Modern Organization Designs

20. 20 Questions ?

21. 21 Thank You