Global matrix structure

By: Abhay Agarwal Gaurav Arora Hardeep Pathak Rohit Anand

Definition of Organization
Organizations are social arrangements for achieving controlled performance in pursuit of collective goals.

Organizational Dilemma
Organizational dilemma concerns the question of how to reconcile the potential inconsistency between individual needs and aspirations on the one hand, and the collective purpose of the organization on the other.

Nature of Organizing
   
Identification and classification of activities Grouping activities Assignment of each group Provision for coordination in the organization structure

Elements Of Organisation
    
Line & staff Functional authority Hierarchy Span of control Organisational chart

Line
 Line employees are workers who are directly responsible for manufacturing goods or providing a service.  Referred to as chain of command. A line structure deals with a company s core task.

Staff
Staff employees are workers who are in advisory positions and who use specialized expertise to support the production efforts of line employees

Functional Authority
A functional relationship exists where a staff department has the authority to insist that the line manager implement its instructions concerning a particular issue.

Hierarchy
Hierarchy refers to the number of levels of authority to be found in an organization.

Span of Control
 Span of control is the number of subordinates who report directly to a single manager/supervisor.  It depends upon the size of organization  The span of control can be changed from time to time depending upon the external environment.

A Sample Organization Chart

CO E

V eP s e t ic re id n F ac in n e

V eP s e t ic re id n Mn fa tu g a u c rin

Dcr ire to HmnRs u e u a e o rc s

Cie hf Ac u ta t co n n

Bd e ugt Aa s n ly t

Pn la t Min n n e a te a c S p rin n e t S p rin n e t u e te d n u e te d n

T in g ra in S e ia t p c lis

B n fits ee A m is to d in tra r

Organizational Chart
 Organizational chart is a pictorial record that shows the formal relations that the company intends should prevail with it.  The chart shows the main departments & senior positions within the organization.  It is the usual way to examine the structure of an organization.

Structure - Purpose
An organization structure is designed to clarify:  who is to do what tasks  who is responsible for what results  remove obstacles to performance caused by confusion and uncertainty of assignment  furnish decision making and communication networks that reflect and support organization objectives

Organizational Structure
Structure is a means for attaining the objectives and goals of an organization Peter Drucker (1974)

Organizational Design
In designing the organization, the leader should focus on optimizing the response time to changes in the external environment. (Stata, 1989) Competitiveness does not lie in downsizing it lies in design (Dodds,1993)

Organizational Design-Change
For managers, the dynamics of knowledge impose one clear imperative: every organization has to build the management of change into its very structure. (Drucker,1992)

Organizational Design: Structural perspective

 People s attitudes are shaped as much by the org in which they work as by their pre-existing personality variables.  Stresses the logical and rational elements of org and de-emphasises peoples preferences and feelings.

Organisational Design: Behavioural perspective

 Internal (individual) factors are main determinants of human behaviour in org rather than external (structural) ones.  Behavioural scientists have found that there is an important relationship between a unit s or individual s assigned activities and the unit members pattern of thought and behaviour.

Organizational Choice
 Corporations, long have wrested with the problem of how to structure organizations to enable employees, particularly the specialists, to do their jobs with maximum efficiency & productivity.  The perplexing issue is whether to organize around functions or products.

ypes Of Organizations
 Functional Organization  Divisional Organization  Matrix Organization

Functional Organization
Job specialization in the horizontal dimension is an inherent part of every organization, indeed every human activity.

Functional Org Structure

Chief Executive Officer or President

Manager Manager Manager Production Engineering Marketing

Manager R&D

Manager Manager Personnel Accounting

Lower-level managers, specialists, and operating personnel

Functional Organisation(Merits)
 Logical reflection of functions  Maintains power-prestige of functions  Occupational specializationSimplifies training & enables professional development  Tight control

Functional Organization (Demerits)

    
Over specialisation-narrow viewpoints Reduces coordination between functions De-emphasis of overall objectives Slow adaptation to environmental changes Conflicts over which products have priority

Divisional Organization
 This type of structure occurs when the organization is arranged around the main products or services.  Specialization by location divides the organization geographically usually according to location of customers.

Divisional Org Structure

Chief Executive Officer or President

Corporate Staff

Division A General Manager

Division B General Manager

Division C General Manager

Manager Production

Manager Engineering

Manager Marketing

Manager R&D

Manager Personnel

Manager Accounting

Lower-level managers, specialists, and operating personnel

Organized similarly to Division 1 Organized similarly to Division 1

Divisional Organization(Merits)
 Focused on product line & customer needs  Growth & diversity of products  Improves coordination & response to changes in demand pattern  Responsibility of profits at divisional level  Training ground for general managers

Divisional Organisation (Demerits)

 Requires more persons with general management capabilities  Maintenance of central economical services difficult  Lesser control by top management  May develop a product focus at expense of wider company interests

Matrix Organization
 Combination of functional and product structures. It attempts to capture the advantages of each of these approaches.  On one axis is a range of products or projects, with a manager responsible for each. On the other are the various functional groups.

Matrix Org Structure

Chief Executive Officer or President Corporate Staff

Manager Administration and Human Resources

Manager Projects

Manager Manufacturing

Manager Engineering

Manager Marketing

Manager Public Relations

Project A

Project B

Project C

Project D

Matrix Organisation(Merits)
 More than one critical orientation to the company operations  Oriented toward end results  Pinpoints responsibility  Specialised knowledge is widely shared but developed within the functional group

Matrix Organization(Demerits)
 Conflict in organizational authority  Problem of defining the extent of Project Manager s authority  Functional groups may tend to neglect their normal duties  Results in a complex structure and difficult to manage

Choice of structure
 Which provides the most efficient utilization of machinery and equipment?  Which provides the best hope of obtaining the required control and coordination?  Which approach permits the maximum use of special technical knowledge?