In the divisional structure, a specific geographic or product area acts as a mini-company, with division staff for various functions, such as accounting, marketing and engineering. Teams benefit from the functional expertise of members, while the functional hierarchy exerts a measure of control and accountability for business activities. He has been a Cleghorn professor of management studies at McGill since 1968. Thus, due to lack of proper communication all departments perform their functions in their own style. Excessive focus on internal relations. Lack of stability Simple organizations totally depend upon few executives.
. Obviously, this spirit of healthy competition brings out efficient executives. Managers must carefully consider whether or not a modular structure would be useful, either entirely or partially, for a given organization. For example, a small business might do fine having the boss recruit, interview and hire employees, with the help of her administrative assistant when the business is very small. Organization structure is concerned with creating different departments and division of work. So what type of a company can a flat structure be suitable for? In worst-case scenarios, departments purposefully withhold information from each other. Focuses on all commercial customers, and has its own product development, production, accounting, and sales employees.
Reprinted in Cleland and King, Systems, Organizations, Analysis, Management: A Book of Readings, pp. Teams are created by grouping employees in a way that generates a variety of expertise and addresses a specific operational component of an organization. The functional organization structure provides the benefit of functional specialization. In the following discussion, I have provided the advantages and disadvantages of the five. Nelson is a graduate of Western Kentucky University with a Bachelor of Arts in corporate and organizational communication and is currently serving as Director of Communications for Attain Capital Management.
Line Organisational Structure : A line organisation has only direct, vertical relationships between different levels in the firm. Communication is less siloed and flows freely, possibly opening up more opportunities for innovation. This problem affects enough organizations that an entire field of study, called change management, has developed. A team is a group of employees—ideally with complementary skills and synergistic efforts—working toward a common goal. Read on to learn why a company might implement a functional structure and the advantages and disadvantages for both company and staff.
He must ensure that technical decisions are made on schedule. This increase in complexity can result in a higher manager-to-worker ratio, which can in turn increase costs or lead to conflicting employee loyalties. There is no hesitation on the part of employees in a simple structure because their orders come directly from the top, not a department head or mid-level manager a subordinate might question. Features: Has only direct vertical relationships between different levels in the firm. Organizational structure defines a specific within an organization, and businesses of all shapes and sizes use it heavily.
The development of particular type of organizational structure defines the authority, responsibility relationship. Information of use to other projects is not locked up within a single project. Jacob is an Author, speaker and futurist. Each group of specialists can therefore operate independently with management acting as the point of cross-communication between functional areas. Therefore, executives are willing to adopt a dictatorial approach. Tends to simplify and clarify authority, responsibility and accountability relationships 2. This would seem to be very desirable on the part of most project managers, but would have some disadvantages in regard to utilization of functional facilities and interaction with other functional personnel.
In fact, at The Morning Star Company, Paul Green. Such a delineation has been presented by one management author 7 who has divided the responsibilities as shown in table 1. Qualified Supervision Functional structures offer a very specific career ladder for participants. Alternatively, it can mean moving from one company to another to take a better position in a similarly structured organization. For instance, there may be a desire by the I. Functional management must modify much of their managerial thinking and their usual operational procedures and activities in order to make the matrix work.
Spoils human relations In functional structure, it is more difficult to maintain a mutual relation among members of the organization. The forms of organizational structure depend upon the nature and size of the enterprise. It seems natural that during periods of crisis, top management thinks that the organization needs a firmer hand and reinstitutes the authoritarian structure. Smaller and some medium size companies might be able to operate in this type of an environment but when you get to organizations with thousands of employees then it becomes challenging. He started writing technical papers while working as an engineer in the 1980s. In the multidivisional structure, subsidiaries benefit from the use of the brand and capital of the parent company. As indicated in the previous discussion of project management, it is necessary to assure that the matrix will work by thoroughly selling the concept to top management and to all involved functional management.
There is no provision of guidance and suggestion from experts and specialists for managerial decisions. A weak matrix has been described by project managers as one in which the balance of power tilts decisively in the direction of line or functional management. Some companies, even when they have already grown or expanded retain a flat structure. The functional experts are to be paid more remuneration. Advantages of the Matrix The matrix organization has many advantages which far outweigh its principal disadvantage of complexity. Since managers cannot avoid these informal relationships, they must be trained to cope with it The informal organisation has the following characteristics i Its members are joined together to satisfy their personal needs needs for affiliation, friendship etc.
It is the most efficient use of facilities, machinery, equipment, and other resources since these resources can be shared between or among projects. One of the concerns of organizations first encountering the matrix is that it is too costly since it appears, on the surface, to double up on management by adding another chain of command. These structures are reported to be good for a productive resource coordination. This contributes to developing working efficiency of both the executive and subordinate level members. If a project was very large, it usually became a pure project organization in which all of the functions and resources necessary to accomplish the objectives of the project were put in a single hierarchical organization. Can Result to Role Confusion An employee may go to work for a flat organization expecting to fulfill a defined role, but find out later that he or she needs to do many pieces of other jobs. Overview of the Modular Structure Organizations can be structured in various ways that determine how the organization operates and performs.