org anisational design

8/11/2019 Org Anisational Design

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STRUCTURESTRUCTURE


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rgan za ona es gnrgan za ona es gn

Ma be defined as total attern of or .

structural elements and patterns used tomanage overall org.

1. Bureaucratic Model-

Max weber gave this concept bureaucracys e ne as an org. oun e on alegitimate and formal system of authority.


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Each or . should have clear divison oflabour and staff.

Hierarchy of position or scalar command.

Rules & procedures to ensure taskaccomplishment.

o c es o personne , promo on an o

security. impersonal manner.


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Behavioural modelBehavioural model 1. Socio Technical system theory-

Within an or there are 2 s stems

A) social system B)Technical system

The managers must deal effectively with

social needs of the system otherwise theec n ca sys em w no unc on

effectively & efficiently.


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2. Likerts System 4 organisations

Relationship between org design &effectiveness.

His research dealt with 8 characteristics of

org. Emphasised on supporting relationship,

r uperformance goals.

if they were impersonal and relativelyunim ortant he em hasizes on uni ue valueof each & every member in org.

There is no best way but one best way todesign an org.


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INTERNATIONAL DIVISIONINTERNATIONAL DIVISION

STRUCTURESTRUCTURE

CEO

- .OPERATIONS

FRANCE CHINA ITALY


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e ea o v s on coor na es oractivities.

.

HOD reports directly to CEO.

adopt this pattern.

Even firms with small int. sales limitedgeography, or few executives with int.expertise use this pattern.

Ex Pepsico , BPL, Titan etc


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Advantages

Grouping of all activities under one . International focus receives top attention.

A unified approach.

A cadre is established. Disadvantages

Two different camp with divergent

objectives. oca on o resources w en rm grows s

difficult.

product/process in international marketsare iven low riorit .


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Global structuralGlobal structural

begin acquiring and allocating resourcebased on international SWOT anal sis. Thisis resorted when strategy changes and

there is a need for structural change.t s n types-

Product.

Function


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Global Product DivisionGlobal Product Division A global product division is a structural

given worldwide responsibility for productrou s.


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INTERNATIONAL PRODUCTINTERNATIONAL PRODUCT

STRUCTURESTRUCTURE

CEO

HOMEOFFICE

MARKETING

PRODUCT COPERATING

PRODUCTION FINANCE HR

DIVISION

FRANCE CHINA ITALY


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It operates as a profit centre.

. The marketing and promotion has to be

done carefull .

The manger of division has full autonomyin decision making.

Advantages,

Polycentric orientation is possible. All traditional function can be coordinated

on a product by product basis.


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Firm use this strategy when a product hasreached maturity stage in home countrybut is in growth stage in others.

Disadvantages

Duplicating resources across divisions.

Second that product managers mayz r r r

short term profit and may ignore long.

Divisional ,managers may be busy inta in local markets then international

as it more convenient and they may haveexperience in that only.


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Global area divisionGlobal area division This structure is resorted when firms

focus on domestic and internationalmarket with equality.

The global division managers are

responsible for all business operation in.

The top mgt. formulates strategy to.


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GLOBAL AREA DIVISIONGLOBAL AREA DIVISION

CEO

HOME

OFFICE

FRANCECHINA ITALYOPERATING

DIVISION


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s norma y use y org, a are nmature stage & have narrow product line.

across geographical areas.

production, marketing, purchase

integration etc.Thus by manufacturing in this region rather

then by bringing product from somewhere

else the co. is able to produce and sell atlower per unit cost.


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Cater to local market taste.

Customize the products ex Spicy, sugar in colddrinks,

Disadvantage.-Lack of centralised control.

Increased cost & duplication of resources on aregional basis.

R&D efforts are ignored by divisions as they are

n ma ur y s age. Their focus is not on latest technological

.


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GLOBAL FUNCTIONAL DIVISION A global functional division organizes

world operations based primarily onfunctions and secondarily on products.

This approach is widely used by extractive

co. v

Functional expertise

. Lean staff.


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GLOBAL FUNCTIONAL DIVISIONGLOBAL FUNCTIONAL DIVISION

CEO

MANUFACTURI FINANCE MARKETING

PLANT A

GERMANY

PLANT B

CHINAUK US


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Disadvanta es Coordination is difficult.

Mana in multi le roducts can be

difficult becoz of separation of production& marketing.

Only CEO is responsible.


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Mixed StructureMixed Structure A Mixed structure is a hybrid design that

combines structural arrangement in a way

that best suits the enterprise. At times an organization may primarily be

unct ona ut pro uct comm ttees may ecoordinating across certain functions.

.structure but functional managers

assistance and support.

Man or anisations use this structureacross the globe.


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Advantages-

type of design which satisfies its need .

problem of communication, chain ofcommand etc ma arise, leadin to aconfusion among employees.


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The Global matrix design is created by

of a functional structure. Members of each ro ect teams are

assigned / selected from functional

departments. Multiple command structure.

Typically in a multinational firm the

r r w r u , r r uproducts or all the products.


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He matrix structure is found to be

success u un er ma or s ua ons. 1st when org. has few resources.

vast amount of information.

st ,competition may require aggressive

marketing efforts but diversity of firmsproducts calls for uniquely individualizedprogram me.


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Advanta es- Mgt. has flexibility.

Inter ersonal leadershi skill is fostered.

Specialised skills are utilised. Individual commitment is improved.

Technical and market expertise are

combined. Strength of functional and divisional

structures are combined.


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Disadvanta es- Decisions are difficult to make.

Communication channels are com licated.

Accountability is difficult to pin point. Power struggle between project &

functional managers.

Employees may be frustrated. Group meetings tend to be time & cost

consuming.


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It is another org. design which has emerged

economies of scale while also beingres onsive to local customer demand.

This structure combines the elements of

product, functional, geographic designs whilerelying on a network arrangement to link thesubsidiaries.

Di erent pro uct, geograp ic unctiona unitshave different structure depending upon

.


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Dis ersed units- subsidiaries locatedanywhere which can benefit org.

Either low cost advantage, new

technology information, new consumertrends.

pec a se perat ons- act v t es carr esout by subunits focusing on particular

, , .

Interdependent Relationships-used to

throughout he dispersed units &specialised subunits.

org anisational design

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