THIS NOTE IS ONLY FOR UPTU 1ST SEM- ORGANIZATION- A social unit of people which is structured and managed to meet a need or to pursue collective goals. All organizations have a management structure that determines relationships between the different activities and the members, and subdivides and assigns roles, responsibilities, and authority to carry out different tasks. Organizations are open systems--they affect and are affected by their environment. Types of the Organization 1. Formal organization – a. The establishment and the development of this type of the organization are very formal in the nature. b. Helps in providing a shape to the various organized activities. c. The Formal organization is developed for a continuous purpose mainly involving the activities that are repetitive in the nature. d. This organization looks after the growth and the stability in the business. e. In the Formal organization, the design is such that that it acts as a great support for the distribution of the authority, creation of the positions, linkage of the various functions etc. f. The Formal organization is not at all born by itself. g. Efforts of someone to get the organization established in the order to make it a juridical person are involved in the Formal organization. h. The Formal organization is registered with some type of the legal provision in the acts as those meant for the shop establishment, the companies, the cooperatives, the trusts, the societies etc, to provide it the legal existence in its own name. 2. Informal organization – a. Here, the people come together informally through their acquaintance. b. Informal relations are created within the same organization which may not be formally planned. c. The Informal organization is born of itself. d. Whenever there is a formal organization, an informal organization is born. e. The Informal organization comes up with the help of the social relations such as the trust, the dependence, the liking etc. f. The position and the problems in the formal structure are given great weight age informally. g. A different communication channel is created by the informal organization and this is referred to as the grape vine. h. With the help of the informal communication, the situation in the organization can be sensed in a different way all together. i. The gossip can be conveyed with the help of the informal communication. 3. Matrix organization – a. According to the principle of the unity of the command, one person should take the order from only one person. b. Plurality of the persons giving the orders should not be present. 4. The project organization – a. One goes for the project with the establishment of the temporary organization with a fixed end in mind. b. Anything that has a beginning and an end, is referred to as the project organization. c. The main responsibility of this type of the organization is to handle the complete project in a especial managerial way as the project is not going to be a continuous process at anytime. d. The specialized, skilled people are required at the different stages and also, in this type of the organization, the replacement of the specialized people can be done depending on the different types of the situations that may arise during the project. 5. Virtual organization – a. This type of the organization, does not look like to be physically operating but very well works like the one, due to the modern communication equipment which may include the following functions – I. Digital mail II. Voice communication III. Cameras IV. Projection systems V. Audio and video conferencing ORGANIZATIONAL STRUCTURE- An organizational structure defines how activities such as task allocation, coordination and supervision are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment. Bureaucratic structures Weber (1948, p. 214) gives the analogy that “the fully developed bureaucratic mechanism compares with other organizations exactly as does the machine compare with the non-mechanical modes of production. Precision, speed, un ambiguity, strict subordination, reduction of friction and of material and personal costs- these are raised to the optimum point in the strictly bureaucratic administration. Bureaucratic structures have a certain degree of standardization. They are better suited for more complex or larger scale organizations, usually adopting a tall structure. The tension between bureaucratic structures and non-bureaucratic is echoed in Burns and Stalkers distinction between mechanistic and organic structures. The Weberian characteristics of bureaucracy are: • Clear defined roles and responsibilities • A hierarchical structure • Respect for merit Bureaucratic Structures have many levels of management ranging from senior executives to regional managers, all the way to department store managers. Since there are many levels, decision-making authority has to pass through more layers than flatter organizations. Bureaucratic organization has rigid and tight procedures, policies and constraints. This kind of structure is reluctant to adapt or change what they have been doing since the company started. Organizational charts exist for every department, and everyone understands who is in charge and what his responsibilities are for every situation. Decisions are made through an organized process and a strict command and control structure is present at all times. In bureaucratic structures, the authority is at the top and information is then flowed from top to bottom. This causes for more rules and standards for the company which operational process is watched with close supervision. Some advantages for bureaucratic structures for top-level managers are they have a tremendous control over organizational structure decisions. This works best for managers who have a command and control style of managing. Strategic-decision making is also faster because there are fewer people it has to go through to approve. Some disadvantages in bureaucratic structures are it can discourage creativity and innovation in the organization. This can make it hard for a company to adapt to changing conditions in the marketplace. Functional 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 becomes 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, efficiencies 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. Divisional structure The Divisional structure or product structure is a configuration of an organization, which breaks down the company into divisions that are self-contained. A division is self-contained and consists of a collection of functions which work to produce a product. It also utilizes a plan to compete and operate as a separate business or profit center. According to Zainbooks, divisional structure in America is seen as the second most common structure for organization today. Employees, who are responsible for certain market services of types of products, are placed in divisional structure in order to increase their flexibility. The process can be further broken down into geographic (for example a U.S Division and an EU division), and product services for different consumers (for example companies or households). Another example of divisional structure would be an automobile company which utilizes a divisional structure. The company would have one 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. 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 differs 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 are 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. Matrix structure The matrix structure groups employees by both function and product. 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. Matrix structure is amongst the purest of organizational structures, a simple lattice emulating order and regularity demonstrated in nature. • 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 projectized 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.
Posted on: Sat, 18 Oct 2014 09:09:50 +0000
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