Organizational structure refers to the way in which an organization's activities are divided, grouped, and coordinated into relationships between managers and employees, managers and employees. An organization's departments can be formally structures in three major ways: by function, by product market, or in matrix from.
TYPES OF STRUCTURE
1.1.1. FUNCTIONAL SRUCTURE
Perhaps the simplest structure is the functional structure. The functional structure organizes the firm around traditional functional areas such as accounting, finance, marketing, operations, and so on. This structure is one of the most common organizational structures in part because it separates the specialized knowledge of each functional area through horizontal differentiation and can direct that knowledge toward the firm's key products or services.
Firms with operations outside their domestic borders might also adopt a functional structure. The key difference between a purely domestic organization and a multinational organization with a functional structure is the scope of responsibilities for functional heads in the multi national firm.
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In a multinational, each department would have worldwide responsibilities. Thus, while each subsidiary would have a local human resource manager, the top human resource manager would be responsible for directing worldwide human resource activities such as hiring, training appraising, or rewarding employees. This structure is most common when the technology and products of the firm are similar throughout the world.
ADVANTAGES OF FUNCTIONAL STRUCTURE
Well suited to small to medium-sized firms with limited product diversification
Facilitates specialization of functional knowledge
Reduces duplication of functional resources
Facilitates coordination within functional areas
DISADVANTAGES OF FUNCTIONAL STRUCTURE
Often creates problems of coordination across functional groups
Creates restricted view of overall organization goals
Can limit attention paid to customers as functional groups focus on their specific areas
Can lead to slower organization response to market changes
Often burdens chief executives with decisions that involve multiple functions
1.1.2. PRODUCT STRUCTURE
In a product structure, the firm is organized around specific products or related sets of products. Typically, each product group contains all the traditional functional departments such as finance, marketing, operations, human resource management, and so on.
Each product is generally treated as a profit center. That is, the related expenses are subtracted from the revenues generated by the sales of located in the headquarters of the company. However, this not necessarily the case.
Multinational firms also use global product structures. This typically happens when customer needs for a given product are more or less the same the world over.
ADVANTAGES OF PRODUCT STRUCTURE
Individuals in different functional areas within the product group focus more on the products and customers
Performance of the product is typically easier to evaluate
There is usually greater product responsiveness to market changes
It often reduces the burden of the top executive in making operating decisions compared to the functional structure
DISADVANTAGES OF PRODUCT STRUCTURE
Duplication and lack of economies of scale for functional areas
Can create problems for customers who purchase products across multiple product groups
There can be more conflict between product group objectives and overall corporate objectives.
There is an increased like hood of conflict between product groups and greater difficulty coordinating across product groups
1.1.3. DIVISION STRUCTURE
The division structure can be viewed as an extension of a product structure. Divisions typically consist of multiple products within a generally related area, though specific products may not necessarily be closely related.
Like domestic firms multi national firms can and do use this structure. In this case, each division is charged with worldwide responsibility. Because division structures are generally extensions of product structure, they have many of the same advantages and disadvantages. For large diversified multinational firms, the division structure is of the more common structures.
Always on Time
Marked to Standard
ADVANTAGES OF DIVISION STRUCTURE
Organizing various product families within a division can reduce functional duplication and enhance economies of scale for activities
To the extend That product families within a division serve common customers, customer focus can increase
Cross-product coordination within the division is eased
Cross-regional coordination within product families and within the division is often eased
DISADVANTAGES OF DIVISION STRUCTURE
Typically only appropriate for diversified, large companies with significant numbers of specific products and products families
Can inhibit cross division coordination
Can create coordination difficulties between division objectives and corporate objectives
1.1.4. CUSTOMER STRUCTURE
As the implies customer structure are organized around categories of customers. Typically, this structure is used when different categories of customers have separated but broad needs.
Multinational firms find this organizational form difficult to implement because of differences among customers across region and countries.
ADVANTAGES OF CUSTOMER STRUCTURE
Facilities in-depth understanding of specific customers.
Increases responsiveness to changes in customer preferences and needs as well as responsiveness to moves by competitors to better serve customer
DISADVANTAGES OF CUSTOMER STRUCTURE
Typically leads to duplication of functional resources in each of the customer units.
Often crease difficulty in coordinating resources in each of the customer units and corporate objective
Can fail to leverage technology or other strengths in one unit across other units.
1.1.5. GROGRAPHIC STRUCTURE
Firms can structure themselves around various geographical areas or region. Within this structure, regional executives are generally responsible for all functional activities and products in their regions.
A number of multinational firms employ geographical structures. This is primarily because customers demands. Government regulations, competitive conditions, availability of suppliers, and other factors vary significantly from one region of the world to another. The size or scope of the region is typically a function of the volume of business.
Vice president Africa
Vice president America
ADVANTAGES OF GOEGRAPHIC STRUCTURE
Typically leads to in-depth understanding of the market, customers, governments, any competitors within a given geographical area.
Usually fosters a strong sense of accountability for performance in the regional managers.
Increase responsiveness to unique changes in the unique market, government regulations, economic conditions,etc. for the geography.
DISADVANTAGES OF GOEGRAPHIC STRUCTURE
Often inhabits coordination and communication between regions.
Can increase conflict and coordination difficulties between regions and corporate office
Normally leads to duplication of functional resources across the regions.
Separating production facilities across multiple regions can inhabit economies of scale
Can foster competitive behavior among the regions, which is particularly frustrating for customer who have operations across multiple regions
1.1.6. MATRIX STRUCTURE
A matrix structure consists of two organization structures superimposed on each other. Consequently, there are dual reporting relationships.
That is one person essentially reports to two bosses. These two structures can be a combination of the general forms already discussed. In multinational companies, matrix structure comes and goes with some frequency.
They come into play quite often because while economies of scale for global product, division or even customer structures are compelling, often-regional differences relative to governments, culture, languages, and economies are also strong. In multinational firms, matrix structure goes out because they are difficult to manage.
FINANCE HRM R & D MARKETING
ADVANTAGES OF MATRIX STRUCTURE
Typically Facilitates information flow throughout the organization
Can enhance decision quality because before key decisions are made, the organization considers the two interesting perspectives.
Is best suited to a changing and complicated business environment
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Can facilitate the flexible use of human resources.
DISADVANTAGES OF MATRIX STRUCTURE
Often increases complexity of performance evaluation because people often have two bosses
Can inhabit the organization's ability to respond to changing conditions quickly
Can diffuse accountability
Often leads to conflicts as the differing perspectives and objectives of the intersecting units come together
TYPES OF CULTURE
Power and influence stem from a central source. Perhaps the owner - directors or the founder of the business. The degree of formalization is limited, and there are few rules and procedures. Such a firm is likely to be organized on a functional basis.
These organizations have a formal structure, and operate by well-established rules and procedures. Job description establishes definite tasks for each person's job and procedures are established for many work routines. Communication between individuals and departments, and the settlement of dispute and appeals.
Task culture is reflected in a matrix structure or else in project teams and task forces. In such organization, there is no dominant or clear leader. The principal concern in a task culture is to get the job done.
In the three cultures, the individual is subordinate to the organization or task. A person culture is found in an organization whose purpose is to serve the interest of the individuals within it.
ABX is internationally well performing company. This is communicating all over the island. And three of the branches are operating as franchise branches. ABX provides those with affliation of UK universities. Therefore, the geographical structure is most suitable for it. But, the ABX is under Matrix structure.
When compare the Matrix structure with geographical structure mainly hierarchical concept of subordination of entities that collaborate and contribute to serve one common aim in all branches
The matrix structure , sometimes referred to as a multiple command system." Is a hybrid that attempts to combine the benefits of both types of designs while avoiding their drawbacks.
ABX has two types of structure existing simultaneously. Employees have in effect two bosses-that is, they work in two chains of command. One chain of commands is functional or divisional, the type diagrammed vertically in the preceding charts.
The second is a horizontal overlay that combines people from carious divisions or functional departments into a projects or business team led a projector group.
Advantages of the structure
Easy communication among specialist- people grouped together according to similarities in their position can easily communicate and share information with each branches.
decisions - people who approach problems from the same perspective can often make decisions more deeply and effectively than can people whose perspective differ.
Learning - makes it easy for people to learn from one another's experiences. Thus a helps employees to improve their skills and abilities and thereby enhances individual and organizational performance.
Facilitates communication - between functions improve decision making, thereby increasing performance.
Facilitates teamwork - people are sometimes able to pool their skills and knowledge and brainstorm new ideas for products or improved customer service.
Even though there are some disadvantages
Coordination - as organization attract customer with different needs, they may find it hard to service these different needs by using a single set of functions.
High operating and managing costs - because each division has its own set of functions, operating costs - the cost associated with managing an organization-increase.
Poor communication between divisions - Structures normally have more managers and more levels of management than functional structure have communications problems can arise as various managers at various levels in various divisions attempt to coordinate their activities.
BOARD CHAIRMANConflict among divisions - divisions may start to complete for organizational resources and may start to pursue divisional goals and objectives at the expense of organizational ones.
SHORT COURSE DIVI
TRAINEE PROGRME DIVI
And the selected organization depends on mix of power and task culture.
Power culture tends to rely on central figures for its strength and has lines of communication which not only radiate out form this centre but link side ways across the organization. The boss is sits in the centre, surrounded by ever widening circles of intimates and influence. Power does derive simply from an individual's level in the organizational hierarchy.
Task culture is concerned with the continuous and successful solution of problems. Judged in terms of results and problems solved.
RELATIONSHIP BETWEEN ORGANISATIONAL STRUCTURE AND ORGANIZATIONAL CULTURE
ABX structure has a vertical component of hierarchy and a horizontal structure of working groups. These can be arranged by territory; function; product; brand; customer; staff number and work patterns; and equipment specialization.
ABX culture is part of the wider culture of society. It emphasizes aspect of behavior that is acceptable in the ABX context.
Culture is both internal to ABX and external to it. The culture of ABX is embedded in the culture of the wider society.
It is true if a management culture is developed, all the managers will adopt the same way of performing the task.
if we observe the selected organization that management styles adopted in different areas we can well know that though they have mostly the same management culture, the styles adopted by these areas have distinction in between them.
There are two reasons why the management culture is differing. Firstly, which have varied purpose, size, the environment in which they have to operate etc. thus is becomes difficult rather unreasonable to adopt the same type of management culture.
FACTORS INFLUENCE THE INDIVIDUAL
The individual's expectation of the organization
This is mainly reflected in is word call psychological contracts formal contracts between people are written documents, which state rights and obligations. However, the same contracts can sometimes be mentally entered into without it being in writing. These are psychological contracts. These contracts can now exist between employees and the organizations.
The employee is willing to put forward effort and intern has certain expectation of the organization. The employer intern has certain expectation from the employee for which to take salaries and benefits. Does if a person's expectations are not properly met by the organization. This can have an adverse effect on performance and it can demotivate problems.
The job fit
Effective performance comes through when the person and the job have a good fit. The person knowledge, experience and skill levels need to match with the requirements of the job.
1.3.3. The employees' personality
A person's personality can have three traits, which effect their behavior at work
Agreeableness - effects how people get along with others
Conscientiousness - a person's commitment towards work and dedication
Attitude - this could form through experience, family background level of education, religious believe etcâ€¦.
3.2 DIFFERENT organizational THEORIES
3.2.1 Maslow higherarchy of needs
Maslow is a clinical physiologist presents his fighting on motivation after doing research amongst his patients according to him. Man is motivated towards achieving fire category of needs which can be arranged in a higherarcy or order of importance.
The theory is based on two important principles
The deficiency principle
The progressive principle
Self esteem needs
Once the need met the next need on the higheracy now motivates behavior.
Physiological needs: The need for food, water, shelter, which must we met for survival.
Safety needs: The need for order security, certainty and predictability in life and freedom from the eat.
Social needs: The need for friendship, affection, love and relationships.
Self esteem needs. The need for recognition and respect and to sealed as important in the eyes of others.
Self actualized needs: The need to reach once fullest potential.
3.2.2 Hertz Berg - Two Factor Theory
Hertz Berg research indicates two sets of disinfectors are responsible for
Preventing dissatisfaction at work
Causing satisfaction at work
The factors which prevent dissatisfaction are refer to as the hygiene factors and our normally associated with the job contexts. However just because hygiene factors are made job satisfaction doesn't occur.
Simply prevented dissatisfaction for satisfaction occurs the motivational factor needs to be presented these are connect to the job content.
Hygiene Factors Motivations
Looking conditions Recognition
Job security Responsibility
Interpersonal Relationship Feelings of personal growth
Status Look itself
Supervision Personal life
Company policy & admin
3.2.3 Mc Gregor - Theory X, Theory Y
Mc Gregor user theory x and theory y to describe two sets of contrasting assumptions managers can hold of their subordinates.
The assumption will influence how managers attempt to motivate and behave towards their subordinates. The term X and Y is used in order to be natural as to what is assumption is correct.
Theory X assumptions
These assumptions are based on the traditional man they assume the average worker dislikes work and avoids it all cost. They lack ambition, which to be directed, avoids taking positions of leadership, resist change and is primary driven by self interest.
Based on these assumptions managers will now attempt to motivate their subordinates through a cane and carrot approach.
Theory Y assumptions
These are based on the non traditional man. They assume for most people work is as natural as rest or play, they exercise self discipline and direction, wish to accept responsibility are creative in thinking and embarrassed change.
Based on the assumptions motivation will now include placing responsibility on trust, providing greater autonomy and flexibility in work and decision making.
3.2.4 Mc Cleland - Acquired needs Theory
He uses thematic apperction tests (TAT) to understand human needs. TAT asks people to view pictures and write stories about what they see. He argues people aquire or develops needs over time as a result of individual life experiences. He identifies three needs which influence behavior.
1. Need for power.
Such people are seeking positions of leadership are good at conversation to argue and hard headed.
2. Need for affiliation
A need for social belongings and to be indigrated in groups.
3. Need for achievement
Those who have an intense need to success. They are often themselves challenging goals and wished to go challenged by others.
Process Theories of Motivation
A particular need can be satisfied through a variety of behavior. A process theory is attempted to explain how individual choose between alternative causes of action to satisfy a given need.
3.2.5 Victor Vroom - Valance Expectancy Theory
According to the theory motivation or force is a function of three interconnected variable.
FORCE = Expectancy x Instrumentality x valance
Zero on one variable results in no motivation how high the other two are
If one is low but the others are high motivation can be strong.
A person believes that working hard will result in a desired level a task performance being achieved. It is a probability that the particular action will lead to a successful outcome.
A person believe that successful performance will be followed by rewards and other potential out comes
E.g.: If you are successful and doing job assigned to increase salary, phrase, increase reputation,
Company benefits, foreign placements.
The value a person places personality to the possible out comes and rewards as a result of successful performance and (having understood about management in order to increase motivation and influence each variable).
E.g.: Maximize expectancy management could
Correct confidence and support provide accessory training or or even select employee to display correct abilities to do a job. In order to increase instrumentality mat. Could clearly communicate what out coming open up as a result of successful performance.
In order to increase valance managers could adjust the work out comes that are in line with the individual's valance
THE NATURE OF MANAGEMENT
2.1.1. Scientific management
Concerned with improving the performance of individual workers.
Fredric Taylor developed this system, which he believed would lead to a more efficient and productive work force.
Develop a science for each element of the job
Scientifically select employees and then train them to do the job
Supervise employees to make sure they follow prescribe methods
Continue to plan replace employees who do not show high achievement
2.1.2. Administrative management
Whereas scientific management deals with the jobs of individual employees, administrative management focuses on managing the total organization. Administrative management laid the foundation for later development in management theory. It is more appropriate for stable and simple organizations than for today's dynamic and complex organization.
14 principle of management
Division of work
Authority with responsibilities
Unity of command
Unity of direction
Subordination of individual interests
Spirit de corps
2.1.3. Bureaucracy management
Outline the concept of Bureaucracy based on a rational set of guidelines.
Most logical and rational structure for large organizations
Founded on legal or rational authority, which is based on law, procedures or rules.
Charismatic authority stems from personal qualities of the individual.
Foundation of contemporary organization theory. Works not know in English until 1947.
Efficiency in Bureaucracies comes from:
Clearly defined and specialized functions.
Use of legal authority
Written rules and procedures
Technically trained bureaucrats
Appointment to positions based on technical expertise.
Promotions based on competence
Clearly defined career paths.
2.1.4. Elton mayo - the Hawthorne experiment
The Hawthorne experiment was originally done by the western electric company in the US within there hawthorn plant.
The main purpose of the experiment was to examine how different working conditions had impact on worker output & efficiency. In lieu with this lighting, heating, the working week, working hours within a day, breaks were altered to see its effects on output.
However the results were contradictory in that no matter how adverse working conditions were made outputs was still rising. Since this scenario could not be explain a professor Elton Mayo was called in.
Mayo continued the experiment by isolating six vary workers in a special room. They were given changing working conditions. Productivity was still rising. Mayo concluded two factors to be causing this.
1. Group Atmosphere
The workers enjoyed each other company and had good inter personal relationship. Their social needs were effectively affected.
2. The experimenter effect
Mayo himself was having an impact on the result; since the workers were isolated for the study they felt special and recognized. This was motivating well.
The overall conclusions of the experiment indicate people are not nearly motivated by money and working conditions as indicated by Taylor. They want to be treated with respect and have their social needs main in their work place.
HSBC's management theory follows Taylor's scientific management; man is an economic creature, responding directly to money. Therefore, workers follow management's orders and work harder if they can earn money.
An employee related to their work, rather like machines, and made as efficient as it was theoretically possible to make them. Extend of work in a task performance is determined by employees physical capacity.
Therefore productivity increased by the efficiency of the workers. The managers approach their jobs in arbitrary rule of thumb way.
2.2 ABX they are motivating employees According to McGregor Theory,
Managers who held this view have following assumption about their subordinates
Employee inherently dislikes work and, when ever possible will attempt to avoid.
Few want or can handle work that requires creativity, self direction, or self control.
Employees will avoid responsibilities and seek formal direction whenever possible.
Since employee dislike work, they must be closely supervised. Coerced or threatened with punishment to achieve goals.
Work is not inherently distasteful. Employees can view work as being as naturals rest or play.
People want to contribute to meaningful goals that they have helped established.
People will exercise self-direction and self-control if they are committed to the objectives
The average person can learn to accept, even seek responsibility.
Therefore managers should make use of underutilized human resources.
Managers must create an environment in which all members may contribute to the limits of their ability.
3.1 DIFFERENT LEADERSHIP STYLES
3.1.1 Autocratic leadership style
Under this all the authority and decision making powers are vasted in leader himself.he is workcentred or leadercentred.he designs the workload and work situation for his employees.
3.1.2 Democratic leadership style
Under this style leader allows the participation of subordinates in decision making process. Leader gives responsibility as well as freedom to the subordinates.
3.1.3 Group centered leadership style
Under this style a leader gives full freedom to his subordinates to take decisions. Entire authority in decision making is given to subordinates. Under this type of leadership, a little direction is involved.
3.1.4 Bureaucratic leadership style
As is clear from the name of the style all activities of the groups are governed by the rules and regulations already framed and brought into operation. The leader are not supposed rather are not required to take any decision, as even the procedures are already laid down.
3.1.5 Manipulate leadership style
This is typically style of leadership. The leader uses his acquaintance with the subordinates for achievement of his goals. As the subordinates believe in their leader they tell him all their needs and desires with an expectation that the leader will help them in fulfillment of these needs and desires.
3.1.6 Expert leadership style
This type of leadership style is basically meant for meeting critical situations. A regular leader needs not be expert in all the matters and therefore may not be able to sort out some problems.
In selected organization following an autocratic leadership style, all the decisions are taken by him only; subordinates are not to participate in decision making process.
Autocratic leader directs, motivates and controls his subordinates. The subordinates are bound obedience and adherence to his directions.
In this type of style, quick decisions and its quick implementation is possible. It is a style of one way communication. In this style the leader instructs the subordinates and the subordinates have simply to follow.
2.2 DIFFERENT APPROACHES
2.2.1 System approach
HSBC is performing through three different approaches, when compare to dialog rather than separately with the various segments of an organization, the system approach to management views the organization as a unified purposeful system
composed of interrelated parts. This approach gives managers a way of looking at the organization as a whole and as a part of the larger, external environment.
2.2.2 Contingency approach
When it is contingency approach suggests that there is no 'one best way' of managing all situations. So the management technique that best contributes to the attainment of their goals might vary in different types of situations. Therefore according to the contingency approach the manager's task is to identify which technique will, in a particular situation. Under particular circumstances and at a particular time best contribute to the attainment of objective.
2.2.3 Science approach
And finally comes to management science approach emphasizes the use of mathematical models in making managerial decisions and solving problems. The development of information and computer technology has vastly facilitated this.
4.1 GROUPS AND BEHAVIOR
Groups are central to organization life. Teams have a 'sense' of identity which a random crowed of individual does not possess.
Unlike a random collection of individuals, a group of individuals share a common sense of identity and belonging. They have certain attributes.
A sense of identity
Whether the group is formal or informal, its existence is recognized by its members: there are acknowledgement boundaries to the group which define who is "in" whom is "out" who is "us" and who is "them".
Loyalty to the group, and acceptance by the group
This is generally expresses itself as comformity,or the acceptance of the norms of behaviour and attitudes that bind the group together and exclude others from it.
Purpose and leadership
Most groups have an express purpose, what ever field they are in: most will, spontaneously or formally, choose individuals to lead them towards the fulfillment of those goals.
DIFFERENT TYPES OF GROUPS
Informal groups include workplace cliques, and network of people who regularly get together to exchange information, groups who socialize outside work and so on
The purpose of Informal groups are usually related to group and individual embers satisfaction, rather than to a task.
Put together by the organization will have a formal structure and a function for which they are held responsible.
Advantages of group
Pooling skills, information and ideas
Could increase the quality of the decision
Participation in the decision making process makes the decision acceptable to the group, whether because it represent a consensus of their views, or simply because they have been consuited. Acceptance of the decision by the group may be important if it affects them, and they are responsible for carrying it out.
Disadvantages of group
Group decision takes longer to reach than individual decisions.
Group decision tends to be riskier than individual decisions. this may be because:
Shared responsibility shadow the individuals sense of responsibility for the outcome of the decision
Contradictory information may be ignored, to protect the group's consensus
Cohesive groups tend to feel infallible: they get over confident
Group cohesion and motivation may be founded on values like innovation, boldness and flexibility
Group decision may partly be based on group norms and interests - the group's own "agenda" - rather than organizational interests
4.2 THE FACTORS INFLUENCE THE TEAMWORK
4.2.1 Supportive sponsors:
The items under this heading considered at the outset of a manager should define what support they needs, and whether the organization has, specialized groups that offer the various types of support required.
4.2.2 Focus on stake holder outcome:
Those groups or individuals who are the directly or indirectly affected by an organization's pursuit of its goals.
4.2.3 Smart goals:
Goals are the ends toward which activity is aimed. They represent not only the end point of planning but also the end toward which organizing, staffing, leading, and controlling are aimed. While enterprise goals are the basic plan of the firm, a firm may also have its own goals.
4.2.4 Committed leadership:
Vision, communication and trust are the essential elements of leadership. But, different leaders may assemble and express these elements in very different ways. There is no specific personality type, management style or skill which can guarantee the success of a leader. Every successful leader represents unique blend of abilities, values and temperament.
4.2.5 Mutual trust:
Trust is the foundation of loyalty. Leaders always attempt to change people. Insecurity and uncertainly always accompany change. In view of such, earning the trust of the follower is mandatory task of a leader. In order to inspire trust, a leader must have integrity. Honesty is one essential component of integrity.
4.3 IMPACT OF TECHNOLGY ON TEAM WORK
E-mail allows asynchronous communication which means team members do not need to be in the same place at the same time in order to communicate effectively. E-mail also has its negative in terms of managing e-mail and of e-mail.
Mobile phones allow teams to communicate even when team members are out of the office, on the road or otherwise unavailable. Sometimes having always access to team members can hinder team functioning.
Phone technologies such as blackberry and 3G data cards allow team members to work and communicate remotely and this out in the field or with clients.
Groupware enables teams to plan meetings, collaborate, delegate all within a virtual environment which can often be accessed remotely from anywhere in the world.
Personal computers allow team members to carry out various tasks and communicate more effectively. Laptop computers allow you to do this anywhere. They are now lighter, more powerful and a longer battery life. Personal Digital Assistants (PDA) now have much of the same functionality as their bigger cousins, but are smaller, more portable and have a longer battery life. Many PDAs now have wifi as standard and some are also phones (and some phones have many PDA features).