Organizational Structure

Group 9
Submitted By:
Uma kumari Agarwal –
069
Aakash Choudhary –
079
Shray Taneja – 089
Jayshree – 099
Arjun Vig – 109
We’re constantly being told that hierarchies are
bad and we must flatten companies to make
them more effective, but don’t companies need
some layers in order to organize for success?
-Jack and Suzy Welch
 Organizational Structure

 An effective structure facilitates management and

clarifies relationships, roles and responsibilities,
levels of authority, and supervisory or reporting
lines
 By reviewing an organization’s structure, a
manager will be able to determine which human,
financial, and technical resources are available,
how they should be allocated, and which resources
are lacking
 Organization Structure:
Determinants And Outcomes

Implicit Models of Organizational

Structure
Perceptions that people hold regarding
structural variables formed by observing
things around them in an unscientific fashion.
 Common Organization Designs

SIMPLE STRUCTURE
 A structure characterized by a low degree of
departmentalization, wide spans of control, authority
centralized in a single person, and little
formalization
Vipul
(CEO)

Lalit Nirav Ajay

Saakshi Shvika
(Marketing (Investment (Finance
(PR Head) (HR Head)
Head) Head) Head)
 Common Organization Designs

BUREAUCRACY

 Highly Routine Operating Tasks Achieved through

 Specialization
 Very Formal Rules & Regulations
 Tasks Grouped into Functional Departments
 Centralized Authority
 Narrow Span of Control
 Decision making follows Chain of Command
 Bureaucracy

 Works best with Less Talented- Low/Middle Level

Managers
 Greater prevalence of Rules and Regulations Substitutes
Managerial Discretion
 Little need for Innovative and Experienced Decision
makers below the Senior Executives
 Specialization creates Subunits Conflicts- Functional
Unit goals Override the overall goals of the org.
 Common Organization Designs

MATRIX STRUCTURE
 A structure that creates dual lines of authority and
combines functional and product
departmentalization
 Gains the advantages of functional and product
departmentalization while avoiding their weaknesses
 Facilitates coordination of complex and
interdependent activities
 Breaks down unity-of-command concept
Matrix Structure (Project-based)
Employees ( ) are temporarily assigned to a specific
project team and have a permanent functional unit

CEO

Engineering Marketing Design

Project A
Manager

Project B
Manager

Project C
Manager
Matrix Structure: GM
 New Design Options

TEAM STRUCTURE
 The use of teams as the central device to coordinate
work activities
 Breaks down departmental barriers

 Decentralizes decision making to the team level

 Requires employees to be generalists as well as

specialists
 Creates a “flexible bureaucracy”
 New Design Options

VIRTUAL ORGANIZATION
 A small, core organization that outsources its major
business functions
 Highly centralized with little or no
departmentalization
 Advantage: Provides maximum flexibility while
concentrating on what the organization does best
 Disadvantage: Reduced control over key parts of
the business
A Virtual Organization
 New Design Options
Network Organizational Structure

Product Call center

development partner
partner (India)
(U.S.A.)

Core
Firm
Package
Accounting
design
partner
partner
(Canada)
(UK)
Assembly
partner
(Mexico)
Network Structure v. Virtual Corp.

NETWORK STRUCTURE
 An alliance of several organizations for the
purpose of creating a product or serving a
client

VIRTUAL CORPORATION
 Several independent companies that form
unique partnership teams to provide
customized products or services, usually to
specific clients, for a limited time
Test
ORGANIZATIONAL STRUCTURE OF
MALAR HOSPITAL
 Organizational Growth

Four levels of organizational growth recognized

by management professionals are:
 Emergent
 Launch or growth
 Consolidation
 Mature
Organizational Growth
 Mechanistic Versus Organic
Models
Why Do Structures Differ?
 Why Do Structures Differ?

SIZE
 How the size of an organization affects its structure

 As an organization grows larger, it becomes more

mechanistic
Characteristics of large organizations:
• More specialization
• More vertical levels
• More rules and regulations
 Why Do Structures Differ?

TECHNOLOGY
 How an organization transfers its inputs to outputs
Characteristics of routineness (standardized or customized) in
activities:
• Routine technologies are associated with tall,
departmentalized structures and formalization in
organizations
• Routine technologies lead to centralization when
formalization is low
• Nonroutine technologies are associated with delegated
decision authority
 Why Do Structures Differ?
ENVIRONMENT
 Institutions or forces outside the organization that
potentially affect the organization’s performance

Key Dimensions-
• Capacity: the degree to which an environment can support
growth
• Volatility: the degree of instability in the environment
• Complexity: the degree of heterogeneity and concentration
among environmental elements
 Change Your
Organization’s Structure...
 Identify the ideal organizational structure
 List the functions and activities of each unit
 Review and categorize personnel
 Examine existing policies, regulations, and laws
 Geographical scope and branches of the
organization
 Change Your
Organization’s Structure...
 Outline the formal and informal channels of
communication
 Review the job descriptions for all key positions
 Proposed changes and its potential affect
 resource implications of a structural change
Nokia – Before Reconstructing

Computers

Rubber

Cell Phones

NOKIA Electronics

Finance

Marketing

Human Resource
Nokia: After Restructuring

Business
Manufacturing
centre 1

Business
Marketing
centre 2
Nokia
Business
Finance
centre 3

Business
centre 4
 Bright Ideas...
You may want to review your organization’s
structure when
 Adopting a new strategic plan
 A new contract or a new grant
 Assessment reveals new trends
 Community demands for new services
 Competitive external environment forces
 Expansion which cannot be accommodated easily
under the existing structure
 Thank You

Questions Please..??