These concepts and ideas are taken from my book,. Certainly it should be a way of minimizing potential power struggles and unnecessary conflicts. Corporate diversification and organizational structure: A resource-based view. Therefore a more adequate organizational model is shown in figure 7, which shows the managerial relationships as double-ended arrows, indicating that the relationships are two-way streets. Conflict, particularly the role conflict typical of the two-boss situation, can produce stress, anxiety, and reduced job satisfaction.
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. The firm can switch between different contract manufacturers that perform different functions; the contract manufacturer can similarly work for different firms. The team structure in large organizations is considered a newer type of organization that is less hierarchical, less structured, and more fluid than traditional structures such as functional or divisional. Finally, this form of structure eliminates confusion regarding who is accountable for the outcome of certain decisions. Amazon could also establish higher flexibility and responsiveness by increasing the empowerment or degree of autonomy of regional or local offices. Every manager is expert in his own field of knowledge. The conventional matrix model figure 1 does not adequately emphasize these most important relationships.
Here, both functional specialists and subordinates do not want to take full responsibility of works because of the violation of the principle of unity of command. Not having a formal structure in place may prove difficult for certain organizations. Resources are shared across both business-as-usual work and project work. The organizational structure also determines how information flows from level to level within the company. Since the unit doesn't have an overview of the entire company, it may focus attention on goals that it believes are important but which are not priorities for top management. Such a delineation has been presented by one management author 7 who has divided the responsibilities as shown in table 1. Advantages and Disadvantages of organizational structures.
An organisation where staff departments have authority over line personnel in narrow areas of specialization is known as functional authority organisation. Better interaction between committee members leads to better co-ordination of activities 3. Groupitis refers to confusing matrix behavior with group decision making. The examples of such department involves, production department, marketing department, finance department, human resource department, research and development department etc. Some staff specialists may exert direct authority over the line personnel, rather than exert advice authority for example, quality control inspector may direct the worker as well as advise in matters related to quality.
The development of production volume, expansion of markets, customers, government regulation etc. However, in functional organization, there is no possibility of quick decisions. Their day job is the project. List of Advantages of a Flat Organizational Structure 1. A strong project manager may place undue emphasis on time and cost constraints, while a functional manager may concentrate on technical excellence at the expense of schedules. For instance, there may be a desire by the I.
Different divisions may also develop rivalries with each other in order to get financial resources invested in them. There are many reasons why the matrix will not work, but failure to lay the groundwork and fully prepare the organization is the principle reason for failure. Dotted lines are usually used to indicate staff relationships or reporting relationships of lesser importance. An evolving corporate structure could even benefit Amazon as the company adds more products and gradually diversifies its business. New York: McGraw-Hill Book Company, 1975, pp. Many organizations have thus, for various reasons including the inability to make the two-boss system work, modified the matrix by shifting the balance of power.
It could mean the allocation of more financial resources to each division. The cope up with such situations, project organisations and matrix organisations have emerged. The breakdown of responsibilities shown in table 1 and table 2, although useful in planning and decision making, is highly simplistic. They do not want to maintain mutual relations with coworkers of other functional areas. As the authors admit, this is an unlikely occurrence, and the more explicit the organizational agreements are the less likely it is to occur.
Definition and Usage The divisional organizational structure organizes the activities of a business around geographical, market, or product and service groups. Everyone is seen as equal. Full and free communication is essential among those working on the project. It Is Cost Efficient As mentioned, in this organizational structure, there are fewer or no manager layers between the executive and the staff. They perform all types of works of creative and innovative nature.
The adhocracy adapts to whatever situation it encounters. Who Is the Real Boss? Hierarchy is a traditional organizational structural characteristic. Thus, a recommendation is for the company to consider reducing the dominance of these structural characteristics. What are the advantages and disadvantages of the five structures? As indicated previously, if only takes one uncooperative disciplinary manager dragging his feet to make the whole project fail. Here, the management makes the recruitment, selection, appointment and placement of the managers on the basis of their specialization. The primary advantage is the use of expertise of staff specialists by the line personnel. Hierarchical structures tend to resemble pyramids, with the highest levels of power and authority at the very top.