ORGANIZATIONAL STRUCTURE

Definition
According to the business dictionary, organizational structure is the typically hierarchical
arrangement of lines of authority, communications, rights and duties of an organization.
Organizational structure determines how the roles, power and responsibilities are assigned,
controlled, and coordinated, and how information flows between the different levels of
management. A structure depends on the organization's objectives and strategy. In a centralized
structure, the top layer of management has most of the decision making power and has tight
control over departments and divisions. In a decentralized structure, the decision making power
is distributed and the departments and divisions may have different degrees of independence.

Read more: http://www.businessdictionary.com/definition/organizational-structure.html

Meanwhile, Wikipedia defines organizational structure as, how activities such as task
allocation, coordination and supervision are directed toward the achievement of organizational
aims. Organizations need to be efficient, flexible, innovative and caring in order to achieve a
sustainable competitive advantage. Organizational structure can also be considered as the
viewing glass or perspective through which individuals see their organization and its
environment. Organizations are a variant of clustered entities. An organization can be
structured in many different ways, depending on its objectives. The structure of an organization
will determine the modes in which it operates and performs. Organizational structure allows
the expressed allocation of responsibilities for different functions and processes to different
entities such as the branch, department, workgroup, and individual.

Organizational structure affects organizational action in two ways:

i. It provides the foundation on which standard operating procedures and routines rest.
ii. It determines which individuals get to participate in which decision-making processes,
and thus to what extent their views shape the organization’s actions.

https://en.wikipedia.org/wiki/Organizational_structure
Types of Business Organizational Structures

1. Functional Organizational Structure

A functional organizational structure is a structure that consists of activities such as

coordination, supervision and task allocation. The organizational structure determines how the
organization performs or operates. The term organizational structure refers to how the people
in an organization are grouped and to whom they report. One traditional way of organizing
people is by function. Some common functions within an organization include production,
marketing, human resources, and accounting.

This organizing of specialization leads to operational efficiency where employees become

specialists within their own realm of expertise. The most typical problem with a functional
organizational structure is however that communication within the company can be rather rigid,
making the organization slow and inflexible. Therefore, lateral communication between
functions become very important, so that information is disseminated, not only vertically, but
also horizontally within the organization. Communication in organizations with functional
organizational structures can be rigid because of the standardized ways of operation and the
high degree of formalization.

As a whole, a functional organization is best suited as a producer of standardized goods and

services at large volume and low cost. Coordination and specialization of tasks are centralized
in a functional structure, which makes producing a limited amount of products or services
efficient and predictable. Moreover, efficiency can further be realized as functional
organizations integrate their activities vertically so that products are sold and distributed
quickly and at low cost. For instance, a small business could make components used in
production of its products instead of buying them.

Even though functional units often perform with a high level of efficiency, their level of
cooperation with each other is sometimes compromised. Such groups may have difficulty
working well with each other as they may be territorial and unwilling to cooperate. The
occurrence of infighting among units may cause delays, reduced commitment due to competing
interests, and wasted time, making projects fall behind schedule. This ultimately can bring
down production levels overall, and the company-wide employee commitment toward meeting
organizational goals.
 Diagram 1: Functional structure organizational chart

2. Divisional Organizational Structure

The divisional structure or product structure consists of self-contained divisions. A division is

a collection of functions which produce a product. It also utilizes a plan to compete and operate
as a separate business or profit centre. According to Zainbooks.com, divisional structure in
America is seen as the second most common structure for organization today

Employees who are responsible for certain market services or types of products are placed in
divisional structure in order to increase their flexibility. Examples of divisions include regional
(a U.S Division and an EU division), consumer type (a division for companies and one for
households), and product type (a division for trucks, another for SUVS, and another for cars).
The divisions may also have their own departments such as marketing, sales, and engineering.

The advantage of divisional structure is that it uses delegated authority so the performance can
be directly measured with each group. This results in managers performing better and high
employee morale.[citation needed] Another advantage of using divisional structure is that it is
more efficient in coordinating work between different divisions, and there is more flexibility
to respond when there is a change in the market. Also, a company will have a simpler process
if they need to change the size of the business by either adding or removing divisions. When
divisional structure is utilized more specialization can occur within the groups. When divisional
structure is organized by product, the customer has their own advantages especially when only
a few services or products are offered which differ greatly. When using divisional structures
that are organized by either markets or geographic areas they generally have similar function
and are located in different regions or markets. This allows business decisions and activities
coordinated locally.
The disadvantages of the divisional structure is that it can support unhealthy rivalries among
divisions. This type of structure may increase costs by requiring more qualified managers for
each division. Also, there is usually an over-emphasis on divisional more than organizational
goals which results in duplication of resources and efforts like staff services, facilities, and
personnel. Diagram 2 shows the example of divisional structure organizational chart:

Diagram 2
3. Matrix Organizational Structure

The matrix structure groups employees by both function and product simultaneously. This
structure can combine the best of both separate structures. A matrix organization frequently
uses teams of employees to accomplish work, in order to take advantage of the strengths, as
well as make up for the weaknesses, of functional and decentralized forms. An example would
be a company that produces two products, "product a" and "product b". Using the matrix
structure, this company would organize functions within the company as follows: "product a"
sales department, "product a" customer service department, "product a" accounting, "product
b" sales department, "product b" customer service department, "product b" accounting
department.

 Weak/Functional Matrix: A project manager with only limited authority is assigned to

oversee the cross- functional aspects of the project. The functional managers maintain
control over their resources and project areas.
 Balanced/Functional Matrix: A project manager is assigned to oversee the project.
Power is shared equally between the project manager and the functional managers. It
brings the best aspects of functional and projectiles organizations. However, this is the
most difficult system to maintain as the sharing of power is a delicate proposition.
 Strong/Project Matrix: A project manager is primarily responsible for the project.
Functional managers provide technical expertise and assign resources as needed.

Matrix structure is only one of the three major structures. The other two are Functional and
Project structure. Matrix management is more dynamic than functional management in that it
is a combination of all the other structures and allows team members to share information more
readily across task boundaries. It also allows for specialization that can increase depth of
knowledge in a specific sector or segment.

There are both advantages and disadvantages of the matrix structure; some of the disadvantages
are an increase in the complexity of the chain of command. This occurs because of the
differentiation between functional managers and project managers, which can be confusing for
employees to understand who is next in the chain of command. An additional disadvantage of
the matrix structure is higher manager to worker ratio that results in conflicting loyalties of
employees. However the matrix structure also has significant advantages that make it valuable
for companies to use. The matrix structure improves upon the “silo” critique of functional
management in that it diminishes the vertical structure of functional and creates a more
horizontal structure which allows the spread of information across task boundaries to happen
much quicker. Moreover, matrix structure allows for specialization that can increase depth of
knowledge & allows individuals to be chosen according to project needs. This correlation
between individuals and project needs is what produces the concept of maximizing strengths
and minimizing weaknesses.

Diagram 3

4. Product Organizational Structure

Another common structure is to be organized by a specific product type. Each product group
falls within the reporting structure of an executive and that person oversees everything related
to that particular product line.

For example an executive over Kraft products would be responsible for every product under
that label – dressings, meats and sauces.

The advantage of this type of structure is that it organizes products by category but can create
completely separate processes from other product lines within the organization.
 Diagram 4

5. Customer Organizational Structure

Certain industries will organize by customer type. This is done in an effort to ensure specific
customer expectations are met by a customized service approach.

An example of this would be in healthcare. A patient seen as an outpatient has very different
needs than those of patients who spend time in the hospital as inpatients. A customer cantered
structure creates customized care for those patients.

The advantage of this type of structure is that it specializes in the needs of each customer group
but can ignore the needs of different customer types.

Diagram 5
6. Geographic Organizational Structure

For organizations that cover a span of geographic regions, it sometimes makes sense to
organize by region. This is done to better support logistical demands and differences in
geographic customer needs.

Typically a structure that is organized by geographical regions reports up to a central oversight

person. You see this type of structure in companies that go beyond a city or state limit and may
have customers all across the country or in multiple states.

Deliberate time and thought should go into the design of an organization’s structure. This is
important so employees have a visual of how the organization functions and understands the
chain-of-command. Operating within a defined structure, with good communication processes
and work-flows, help to ensure efficient management of resources – people, time and money.

Diagram 6
Business Organizational Structure

The organizational structure that we use for our business is functional organization structure.
The reason why we use this type of organization structure because it is the most suitable
compare to others to show the flow and work chain in our business. This type of organisational
structure will be able facilitate customer to understand on organisational structure, leadership
and task specialisation in our business. Diagram 7 shows our organizational structure:

MUHAMMAD HISHAM
BIN ZULKEFLI
(MARKETING MANAGER)

INTAN SYAFIQAH BT MD
SHUKOR
(ASSISTANT MANAGER)

MUHAMMAD FIKRI BIN

SITI ZUBAIDAH BINTI SAREGAT
NUR AFINA BINTI ROSILI LEONG JIA JHIE
HANAPI
(OPERATION MANAGER) (FINANCE MANAGER) NGIENG WOEI YING
(PRODUCTION MANAGER)
(RUNNER)

Diagram 7: Organizational structure chart

Detail Task

1) MARKETING MANAGER

Marketing manager is major root in one organization. A marketing manager will lead and lead
a business journey.
Conducting Market Research

Marketing managers carry out market research to gain a clear understanding of what an
organization's customers really want. Marketing research enables these managers to identify
new market opportunities, helping the organization create a market niche for its products or
services. Market research also involves studying the organization's competitors so as to develop
superior products and employ efficient marketing techniques. Companies conduct market
research using questionnaires, face-to-face interviews or analysing the buying habits of
consumers. Example for this business, marketing manager can make research on how the
acceptance of Korean pop to our society so and Kpop fans average age to know our target
customer to what are ancillary product that is suitable to sell to them.

Developing the Marketing Strategy

Marketing managers are responsible for developing marketing strategies for their
organizations. These strategies outline clearly how an organization will promote its products
and services to its target market with an aim of increasing its sales volumes and maintaining a
competitive edge over its competitors. He must exploit whatever medium that can be used to
places our business so people will know the existence of our business. Example like, using
social media likes twitter and our Instagram account to post our product and services.

Customer Relationship Management

The marketing manager performs the function of championing customer relationship

management in the organization. The marketing manager collects this information from the
organization's customer database to help create a customer satisfaction survey. Marketing
managers then share this information with other employees to ensure they offer excellent
customer service to their clients in order to build lasting relationships.
2) ASSISTANT MANAGER

Assistant managers have a lot of responsibility, and this job requires great leadership skills.
Whether you’re managing a group of sales people in retail or dishing out orders to servers in a
restaurant, she need to keep a level head, be able to multitask and have excellent people skills.
The reason why we choose Intan Syafiqa is because all people in this organization see that he
have most of that qualities and our marketing manager believe with potential that she has.
Assistant manager must have these skills:

i. Leadership: You will have several people she need to supervise in addition to handling
general complaints, last-minute schedule changes, kitchen mess-ups and inventory
problems. Assistant managers are leaders and should represent their company and
themselves well by acting as a role model to the people reporting to them.
ii. Organization: There will be a million and one things going on as an assistant manager
and everyone will assume that she have it all worked out for them. She should be able
to stay focused during busy times and delegate tasks to employees to keep business
running smoothly.
iii. Being friendly and outgoing: People skills and customer service are a must in this job.
Not only will she interact with her employees every day, but she will also need to assist
customers when they have questions, concerns or complaints. Put on a happy face and
address these issues in a professional manner.

Role of Assistant Manager

1) Monitor and maintain store inventory

Assistant manager fully responsible towards record out and enter stock goods booked from
manufacturer and sale ticketing service for concert explore done by artist - kpop artist in this
country. For stock goods, she should ensure every goods accepted sufficient his total as in ask.
Apart from that, she also had to do quality control to every goods or item received to ensure
product quality or item produced by manufacturer satisfy. This to ensure client gets satisfaction
terms of quality to every goods bought from we. For concert ticket sale service, assistant
manager need to communicate with organiser to get licences sell and distribute ticket. Apart
from that, she also decides number of tickets that will be adopted from organiser to be sold to
fans - kpop fans that get the ticket.
2) Providing Leadership and Direction to All Employees.

The assistant manager has to carry out his duties as a leader, leading each of the assignment
tasks - other subordinate managers. She is the second highest leader in this business. She also
needs to communicate every direction from the marketing manager so that business operations
can run smoothly as planned. The assistant manager is also responsible for providing guidance
to other subordinates such as operations manager, finance manager, production manager and
runner. This is to ensure they are able to carry out their respective duties in accordance with
the guidelines and instructions of the marketing manager. For example, he gives guidance on
the financial records of the business that financial managers need to record.

3) Communicate With Clients and Evaluate Their Needs

The assistant manager is the individual who will act to interact with the customer directly. She
will answer every question and customer complaints about the products and services provided
by this business. She will hear all the complaints and customer responses. She will then
evaluate every proposal given by the customer to further strengthen the quality and service
provided to maximize customer satisfaction.

3) OPERATION MANAGER

An operations manager fills a pivotal role in a business, government or other organization. The
precise tasks of an operations manager depend in large part upon the nature and size of the
enterprise, but she needs a wide range of business and interpersonal skills to succeed. In
general, an operations manager plans, oversees and smooths communication.

Management of Resources

Operations managers play a leading role in managing both raw materials and personnel.
Oversight of inventory, purchasing and supplies is central to the job. Human resources tasks
include determining needs, hiring employees, overseeing assignment of employees and
planning staff development.
Goal-setting

Operations managers set goals and objectives and establish policies for various departments in
the organization. For example, operations manager duties include sales forecasting and
planning of sales promotions. In cooperation with other managers, they help establish
procedures and put them into effect. For example, her goal that our operation manager have set
is to sell high quality product and to be no 1 ticket dealer in Batu Pahat

Communications

Operations managers need good communication and interpersonal skills to help the different
parts of an organization work together. Her job includes creating a positive culture where the
work can get done. At times, operation managers help resolve disputes or disagreements.
Operations managers cooperate in high-level decision making with other top executives of an
organization, such as the president, chief financial officer and chief executive.

4) PRODUCTION MANAGER

As a production manager, she will be involved with the planning, coordination and control of
manufacturing processes. She will make sure goods and services are produced efficiently and
that the correct amount is produced at the right cost and level of quality.

(1) Production planning:

Production planning is the first function performed by the production manager. Production
planning is concerned with thinking in advance what is to be produced, how it is to be produced
and by what time should it be produced. It is concerned with deciding about the production
targets to be achieved by keeping in view the sales forecasts.
(2) Production control:

Production planning cannot be properly achieved without an effective system of production

control. It is in fact concerned with successful implementation of production planning. It aims
at completing production well in time and also with lesser costs. A proper system of production
control ensures continuous production, lesser work-in-progress and minimisation of wastages.
She will also will control number of ticket that this business will take from the organizer.

(3) Quality control:

The production manager is also concerned with maintaining required quality of the product.
Quality control is concerned with controlling the negative variables which affect the ultimate
quality of a product. It is concerned with use of all the ways and means where by quality
standards could be maintained. She is the last person in charge on the quality control of a
product that we sell to customer. She will also the first person that will be ask if the product
have some problem.

5) FINANCIAL MANAGER

Financial management refers to the efficient and effective management of money (funds) in
such a manner as to accomplish the objectives of the organization. It is the specialized function
directly associated with the top management. There are some of the duty of financial manager:

i. Prepare financial statements, business activity reports, and forecasts,

ii. Monitor financial details to ensure that legal requirements are met,
iii. Supervise employees who do financial reporting and budgeting,
iv. Review company financial reports and seek ways to reduce costs,
v. Analyse market trends to find opportunities for expansion or for acquiring other
companies,
vi. Help management make financial decisions.
6) RUNNER

Runner is the person who do the last job. Runners are the last in an organization where no
business runner requiring delivery service cannot deliver their products to customers. Duty of
runner in this business is:

I. Deliver final items to the post office.

If the customer's request is within a distance that does not allow the runner to deliver,
the runner will ship the item to the nearest post office and manage the posting of the
goods to the customer. For example, a customer who booked a seated item in Pahang.
So the runner goes to the post office to arrange delivery by mail

II. Delivery
The main task of the runner is to ship the goods ordered by the customer. but the runner
only sends a face-to-face item in a certain area that they can reach only. For this
business, the runner is just over the area around Parit Raja, Ayer Hitam and Batu Pahat
only.