Week 4: Organizational Structures

WHAT IS ORGANIZATIONAL STRUCTURE?

Ways in which the organization is organized and structured

WHAT IS THE PURPOSE OF STRUCTURE?

A framework for order, planning, monitoring and control

To optimize organizational performance

Governance and regulatory

WHAT IS THE RELATIONSHIP BETWEEN STRUCTURE AND MISSION?

Structure can be seen as a considered way of organizing interactions across parts of an organization to achieve its goals/missions

WHAT IS MAX WEBER’S QUOTE ON STRUCTURE AND BUREAUCRACY?

     ‘The decisive reason for the advance of bureaucratic organization has been its purely technical superiority over any other form of organization’

WHAT DEREK PUGH ET AL’S QUOTE ON STRUCTURE AND BUREAUCRACY?

     ‘It may not be impossible to run an effective organization of 5000 employees non-bureaucratically, but it would be so difficult no one tries’

WHAT IS DRUCKER’S QUOTE ON IMPORTANCE OF A GOOD STRUCTURE?

“The wrong structure will seriously impair business performance and may even destroy it”

“A poor organizational structure makes good performance impossible no matter how good the individual managers may be”

WHAT ARE THE CONSEQUENCES OF A POORLY STRUCTURED ORGANIZATION?

·      Inefficiency

·      Slow decision making

-Loss of opportunity

-Failure to react to external change

·      Conflict and lack of coordination

-Low motivation and morale

Unnecessary costs and a lack of cost control

WHAT IS THE RELATIONSHIP BETWEEN STRATEGIC MANAGEMENT LEVEL AND COMMUNITY/INSTITUTIONAL LEVEL?

·      Both are at the top of the structure

·      Includes organizational purpose, goals, broad strategy, mission, vision

 

WHAT IS THE RELATIONSHIP BETWEEN TACTICAL MANAGEMENT LEVEL AND MANAGERIAL LEVEL?

·      Both are in the middle of the structure

·      Includes coordination of the work that is done

WHAT IS THE RELATIONSHIP BETWEEN OPERATIONAL MANAGEMENT LEVEL AND TECHNICAL LEVEL?

·      Both are at the bottom of the structure

·      “Shop floor” activity (the core operational work taking place on the production floor)

WHAT’S THE RELATIONSHIP BETWEEN STRUCTURE AND PROCESS?

·      Important to consider process as well as structure

·      Structure is a fixed image of an organization

·      ‘Process is a moving image’

WHAT DOES GALBRAITH’S STAR MODEL INCLUDE?

People, strategy, rewards, structure, process

WHAT ARE THE WAYS OF SEGMENTING STRUCTURE?

     By functional area

    By products or service

     By region

  By nature of the work

By customer type

HOW IS STRUCTURE SEGMENTED BY FUNCTIONAL AREA?

CEO—→HRM—→ Operation, Finance, Marketing, R and D, Customer support

 

HOW IS STRUCTURE SEGMENTED BY PRODUCT OR SERVICE?

CEO—→HRM—→ Beer products, Wine products, Spirits products, soft drinks, Catering products

HOW IS STRUCTURE SEGMENTED BY REGION?

Global Board—→Global HQ, UK, Europe, America, Asia and Africa, Australia

HOW IS STRUCTURE SEGMENTED BY NATURE OF WORK?

CEO—→HRM—→ Confidential projects, Bespoke projects, Standard projects

HOW IS STRUCTURE SEGMENTED BY CUSTOMER TYPE?

CEO—→HRM—→High value, Mid value, Mass market customer

WHAT IS CHAIN OF COMMAND?

No. of different hierarchal levels in the structure of the organization.

Vertical manager—→ ‘subordinate relationships

WHAT IS SPAN OF CONTROL?

No. of people who report directly to a given manager/supervisor

No ideal number, context specific

WHAT IS LINE RELATIONSHIP?

The line that flows directly down through the structure

WHAT IS FUNCTIONAL RELATIONSHIP?

Relationships with people in specialist or advisory positions

WHAT IS STAFF RELATIONSHIP?

relationships with authority especially personal assistants to senior managers

WHAT IS LATERAL RELATIONSHIP?

- relationships between individuals fin different departments of sections especially those on the same level

WHAT ARE PROJECT TEAMS?

Projects are transitory so may need to be represented some other way

: - groups made up of staff from different parts of the organization but working to a project manager for the duration of the project

: - similar to matrix structure

WHAT ARE MINTZBERG’S FIVE TYPES OF ORGANIZATIONAL STRUCTURE?

1.    Machine Bureaucracy

2.    Professional bureaucracy

3.    Divisional

4.    Entrepreneurial

5.    Innovative

WHAT IS MACHINE BUREAUCRACY?

Tight vertical structure for centralized control.

Organization is like a machine.

Standard work: routines and procedures.

Mainly include government agencies and other large corporations

WHAT ARE THE STRENGTHS/WEAKNESSES OF MACHINE BUREAUCRACY?

STREGTHS

-       Structure, consistent

WEAKNESS

-       Too conservative, inefficient resulting from bureaucratic process

WHAT IS PROFESSIONAL BUREAUCRACY?

Relies on professional, technically, skilled, competent knowledge workers who demand control of work

e.g. universities, law firms, accounting firms

WHAT ARE THE STRENGTHS/WEAKNESSES OF PROFESSIONAL BUREAUCRACY?

STRENGTHS

-       More decentralized= shared decision making

WEAKNESSES

-       Professional standpoint might be out of control or not

 

WHAT IS DIVISIONAL BUREAUCRACY?

Most common in large corporations with multiple business units or products/services

semi-autonomous control within divisions

Divisions to promote specific (tailored) style of management in each division

Centralized control.

WHAT IS THE ENTREPRENEURIAL BUREAUCRACY?

Simple flat, loose organizational structure

Typically driven by entrepreneurial minded leader

e.g. Startup companies managed by their founders

WHAT ARE STRENGTHS/WEAKNESSES OF ENTREPRENEURIAL BUREAUCRACY?

STRENGTHS

-energy enthusiasm

WEAKNESSES

-poor task discipline, inefficiency, controlling management

WHAT IS INNOVATIVE/ADHOCRACY BUREAUCRACY?

Common in new industries or with companies that operate with projects

e.g. Filmmaking, consultancies.

Pre-bureaucracy

Highly flexible

Semi-autonomous

WHAT ARE STRENTGHS/WEAKNESSES OF INNOVATIVE BUREAUCRACY?

STRENGTHS

-Decentralized decision making is a key trait as talent leaders are allowed to make judgments with efficiency in mind.

WEAKNESSES

-potential for leadership conflict and uncertainty over authority.