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ORGANIZATION STRUCTURES

Its all about working


together
What is organizing as a
managerial responsibility?
What are the most common types
of organization structures?

ORGANIZATION STRUCTURES

Organizing As A Management Responsibility


MODULE GUIDE 13.1

Organizing is one of the management


functions.
Organization charts describe the formal
structures of organizations.
Organizations also operate with
important informal structures.
Informal structures have good points
and bad points.

ORGANIZATION STRUCTURES

Organizing As A Management Responsibility


 Organizing
 process of arranging people and resources to work
toward a common goal.

ORGANIZATION STRUCTURES

Organizing As A Management Responsibility

 Structure
 system of tasks, reporting relationships, and communication that links
people and positions within an organization.

 Organization Charts
 describe the formal structure, how an organization should ideally work.

ORGANIZATION STRUCTURES

Organizing As A Management Responsibility


 What You Can Learn from an Organization Chart
 Division of work - Positions and titles show work responsibilities.
 Supervisory relationships - Lines between positions show who reports to
whom in the chain of command.
 Span of control - The number of persons reporting to a supervisor.
 Communication channels - Lines between positions show routes for formal
communication flows.
 Major subunits - Which job titles are grouped together in work units,
departments, or divisions.
 Staff positions - Staff specialists that support other positions and parts of the
organization.
 Levels of management - The number of management layers from top to
bottom.

ORGANIZATION STRUCTURES

Organizing As A Management Responsibility


Division of Labor
People and groups performing different jobs

Formal Structure
The official structure of the organization

Informal Structure
the unofficial relationships that develop
among an organizations members.

ORGANIZATION STRUCTURES

Organizing As A Management Responsibility

ORGANIZATION STRUCTURES

Organization Structures
MODULE GUIDE 13.2

 Functional structures group together people using


similar skills.
 Divisional structures group together people by
products, customers, or locations.
 Matrix structures combine the functional and
divisional structures.
 Team structures use many permanent and
temporary teams.
 Network structures extensively use strategic
alliances

ORGANIZATION STRUCTURES

Functional Structures
 Departmentalization
 Grouping together people and jobs into one unit

 Functional Structures
 group together people using similar skills to perform similar activities.
Potential Advantages of Functional Structures
Economies of scale make efficient use of human resources.
Functional experts are good at solving technical problems.
Training within functions promotes skill development.
Career paths are available within each function.

ORGANIZATION STRUCTURES

Functional Structures

ORGANIZATION STRUCTURES

Functional Structures
Functional Chimneys Problem
A lack of communication and coordination
across functional organizations

ORGANIZATION STRUCTURES

Divisional Structures
Divisional structures group together
people who work on a similar product,
work in the same geographical region,
or serve the same customers.
Potential Advantages of Divisional Structures
Expertise focused on special products, customers,
regions
Better coordination across functions within divisions
Better accountability for product or service delivery
Easier to grow or shrink in size as conditions change

ORGANIZATION STRUCTURES

Divisional Structures

ORGANIZATION STRUCTURES

Customer & Matrix Structures


Customer Structure
Groups together people and jobs that serve
the same customers or clients

Matrix Structure
uses permanent cross functional teams to
try to gain the advantages of both the
functional and divisional approaches.

ORGANIZATION STRUCTURES

Matrix Structures







Potential Advantages of Matrix Structures


Performance accountability rests with program, product, or project managers.
Teams enable better communication and cooperation across functions.
Teams make more decisions and solve more problems at their levels.
Top managers spend more time on strategic issues.
A cross-functional team brings together members from different functional
departments.

ORGANIZATION STRUCTURES

Team Structures
 Team Structures
 make extensive use of permanent and temporary
teams, often cross functional, to improve
communication, cooperation, and problem solving.
Potential Advantages of Team Structures
Team assignments improve communication, cooperation, and
decision-making.
Team members get to know each other as persons, not just job
titles.
Team memberships boost morale, and increase enthusiasm and
task involvement.

ORGANIZATION STRUCTURES

Team Structures

ORGANIZATION STRUCTURES

Network Structures
 Network structures maintain a staff of core fulltime
employees and use contracted services and
strategic alliances to accomplish many business
needs.

ORGANIZATION STRUCTURES

Virtual Structures
 Virtual Structure
 Uses information technologies to operate as a
shifting network of alliances.
MANAGEMENT TIPS
Seven deadly sins of outsourcing:
1. Outsourcing activities that are part of the core competency
2. Outsourcing to untrustworthy vendors
3. Agreeing to unfavorable contracts with the vendor
4. Overlooking impact on existing employees
5. Not maintaining oversight; losing control to vendors
6. Overlooking hidden costs of managing contracts
7. Failing to anticipate need to change vendors or cease outsourcing

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