Creating an Organizational Structure

By Madhusudhan M

Before we go ahead and create an Organizational Structure, let’s have a quick look at the terminology used in the organization

Structures in SAP HCM

1. Organizational structure.

2. Enterprise structure.

3. Personnel structure

• Pay scale structure

• Applicant structure

• Wage type structure

1. Organizational structure: It contains organizational objects /elements. These are called building elements.

Organizational objects / elements are:

Organizational objects Org. key

Organizational unit O

Job C

Position S

Person P

Cost center K

Task T

Task group Ts

If we create any organizational object, System will assign a eight digit numeric number, which is called unique Number.

1. Organizational Unit: Represents a functional unit in your enterprise, Human Resources department, for example. Accordin
tasks are divided up within an enterprise, this could be a department, group or project team, plant, for example. Organizationa
from other units in an enterprise such as personnel areas, company codes, business areas etc. These are used to depict struc
(administration or accounting, for example) in the corresponding components.

Kinds of organizational units

A). Main Organizational unit / Root organizational unit: Whatever the organization we create for the first time is called
organizational unit.

B). Sub organizational unit: Under Main org. unit whatever we create is called sub org.units.

2. Job: Jobs, in contrast, are classifications of functions in an enterprise (administrator, for example), which are defined by the
of characteristics. Jobs serve as job descriptions that apply to several positions with similar tasks or characteristics.

Jobs are used as templates to create Positions that means to say without a job we can’t create a position.

Example:

• Manager

• Engineer

• Consultant

• Designer

• Administrator

3. Position: Represents a post that can be occupied by a person (employee) in the staff assignments of an organizational uni
administrator, for example. Positions differ from jobs. A job is not concrete but rather the basis for the creation of various posit
similar tasks and characteristics. . Positions are created based on jobs; it means to say without a job we can’t create a Positio

Job Position

Manager HR manager

Marketing manager

Finance manager

Plant manager

Engineer Production engineer

Site engineer

Software engineer

Consultant SAP HR consultant

 FI/CO consultant

SD consultant

Designer Software designer

Web designer

1. Person: An individual, who is listed as an employee in Personnel Administration. A position can be occupied partially,
percentage.

2. Task: It is a collection of duties and responsibilities. Tasks are assigned to jobs and positions.

“Activity which is performed within an organizational unit”

1. Task group: It is a group of tasks which can be assigned either a job or a position.
* HOW TO CUSTOMIZE ORGANIZATIONAL STRUCTURE*

Organizational structure can be created in three procedures.

1. Simple Maintenance
2. Expert Mode / Detailed Maintenance
3. Organization and Staffing
Comment: If we create organizational Structure in any procedure, the same structure reflects in other two procedures.

If we create organizational structure in Simple maintenance and Organization and Staffing the relationship between the object
by the system. Where as in detailed Maintenance the user has to assign the relationship code.

The relationship between two objects is expressed in three digit numeric characters.

Each and every relation can be expressed in two ways.

1. Top down àwhich is indicated with B

2. Bottom up àwhich is indicated with A

For example:

TATA group of business---Bàtop down.

TATA mobiles business-- -Aàbottom up

In the above Organizational units i.e. BàTATA group of business shows its relationship towards A i.e. TATA mobiles, in the sa
TATA mobiles shows its relationship towards B i.e. TATA group of business. That means to say TATA mobiles reports to TAT
business / TATA group of business is the line supervisor of TATA mobiles.

So we come to know that the lower level organizational object is A

So we come to know that the higher-level organizational object is B

The relationship codes can be seen through transaction code “OOVK” table name is T778V

The relationship codes:

Relationship
code Relationship bottom up Relationship top down

Indicates with A Indicates with B

001 Is a subdivision of Is subdivided into

002 Reports (line) to Is line supervisor of

003 Belongs to Incorporates

004 Is subordinate to (disc.) Is disc.supervisor of

005 Is subordinate to Is supervisor of

006 Substitutes for Is substituted by

007 Describes Is described by

008 Holder Holder

009 Successor Successor

010 Substitute Substitute

011 Cost center assignment Cost center assignment

012 Manages... Is managed by...

013 Staffing requirement Staffing requirement

014 Cost distribution Cost distribution

015 Is identical to Is identical to

017 Is carried out by Carries out

018 Previous org. assignment Previous org. assignment

019 Planned org. change Planned org. change

020 Is a specialization of Is a generalization of