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Organisation Design and Structure

Organisational design involves assessing the fit between goals, structures and rewards and implementing alternative actions when needed. It considers factors like span of control, committees, technology, and strategy. Traditional designs include functional, divisional and line-staff structures. Contemporary designs include matrix, project and virtual organizations. Organisational structure defines relationships, duties and coordination to achieve goals efficiently. The document discusses various organisational designs and their advantages and disadvantages.

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109 views29 pages

Organisation Design and Structure

Organisational design involves assessing the fit between goals, structures and rewards and implementing alternative actions when needed. It considers factors like span of control, committees, technology, and strategy. Traditional designs include functional, divisional and line-staff structures. Contemporary designs include matrix, project and virtual organizations. Organisational structure defines relationships, duties and coordination to achieve goals efficiently. The document discusses various organisational designs and their advantages and disadvantages.

Uploaded by

kunal kotak
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Organisational Design

Dr. Prerna Sharma


Meaning

Organisational Design is the continuous


monitoring and assessing of the fit between the
goals , structures and rewards, the creation and
choice of alternative actions where there is no
fit and the implementation of the chosen
design.
Factors involved in organisational
design

▪ Span of control
▪ Line and staff relationship
▪ Committees and group decision
making
Need and Significance of Organisational
Design

▪ Division of work
▪ Coordination
▪ Fixation of Responsibility
▪ Planning and Controlling
▪ Relationships
▪ Reduction in Wastages
▪ Optimum use of resources
▪ Team spirit
Factors influencing Organisational
Design

▪ Technology
▪ Environment
 Customers
 Competition
 Suppliers
 Channel Intermediaries
▪ Strategic Factors
 Low cost Strategy
 Differentiation Strategy
 Focussed Strategy
TYPES OF ORGANISATIONAL DESIGN

▪ TRADITIONAL ORGANISATION DESIGN


 Functional Design
 Place Design
 Product Design
 Multidivisional Design
▪ CONTEMPRARY ORGANISATIONAL DESIGN
 Multinational Design
 Network Design
 Virtual Organisation
ORGANISATIONAL STRUCTURE

Pattern of relationships among


individuals and departments in
an organisation. It is a
framework through which
organisation operates.
▪ Pattern of Relationships
▪ Duties and Responsibilities
▪ Existence of Purpose
▪ Two Dimensions
STEPS IN ORGANISATION STRUCTURE

▪ Defining Organisational goals


▪ Determining activities to achieve goals
▪ Grouping of activities
▪ Making arrangement of resources
▪ Assignment of duties
▪ Granting of authority
▪ Superior-subordinate relationship
▪ Co-ordination
TRADITIONAL ORGANISATION STRUCTURE

Line Organisation Structure


▪Direct flow of authority
▪Responsibility flows upwards
▪Reporting to one superior
▪Scalar Chain and Unity of Command
▪No staff relationship
Advantages

▪ Simplicity
▪ Quick decision making
▪ Discipline
▪ Clear definition of authority
▪ Easier supervision and control
▪ Coordination
▪ Development
▪ Flexibility
Disadvantages

▪ Burden on executives
▪ Autocratic leadership styles
▪ Lacks specialisation
▪ Retards expansion
▪ Lack of initiative
▪ Not suitable for large organisation
▪ Problem of strict supervision
▪ Overdependence on executives
Functional Organisation Structure

▪ Advantages: Specialisation
▪ Mass Production
▪ Co-ordination
▪ Reduced pressure on duties
▪ Effective Supervision
▪ Scope of functional improvement
▪ Optimum use of resources
▪ High efficiency
Limitation

▪ Lack of unity of command


▪ Divided responsibility
▪ Conflict
▪ Unsuitable for non – manufacturing units
▪ Delay in decision making
▪ Difficulties in coordinating different functions
▪ Expensive
▪ Separation of planning from doing
Line and Staff Function

▪ Advantages : Specialisation
▪ Sound Decisions
▪ Unity of Command
▪ Less burden on line executives
▪ Development opportunities
▪ Well defined authority and responsibility
▪ Suitable for large concerns
▪ Systematic planning and control
Disadvantages

▪ Conflicts
▪ Too much dependence on staff
▪ Irresponsible staff
▪ High Operating cost
▪ Staff lacks authority
▪ Delay in decision making
▪ Shifting of responsibility
DEFICIENCIES/WEAKNESSES OF THRADITIONAL
STRUCTURES

▪ Roles, authorities, responsibilities are rigidly defined.


▪ Suitable only in case of stable environments
▪ Limited scope for managerial developments
▪ Focuses on downward communication
▪ Too much strict control
▪ Too many formalities
▪ Decisions on basis of established policies
▪ Centralised at top & not suitable for complex activities
ORGANISATIONS FOR THE FUTURE:TYPES/MODERN
ORGANISATIONAL STRUCTURES

▪ Project Structure :
Advantages : Suitable for complex projects of longer durations
Encourages creativity
Does not disturb routine of existing functional departments
Disadvantage :
Problem of coordination
Temporary
No authority on financial resources
MATRIX ORGANISATION

▪ Advantages :
Top Management can concentrate on Strategic Planning
Responds to changes in environment
Specialisation
Optimum use of resources
Inter departmental cooperation
Developmental skills
Higher efficiency & sound decisions
DISADVANTAGES

▪ Increase in work load


▪ High cost
▪ Absence of unity of command
▪ Power struggle
▪ Difficulty of balance
▪ Morale
▪ Complex Nature
▪ Shifting of Responsibility
PROJECT ORGANISATION V/S MATRIX
ORGANISATION

PROJECT ORGANISATION MATRIX ORGANISATION


Group of projects that are highly complex and Uses two or more co-existing structures
technical.
Independent Dependent
Staff reports to project manager in respect of Functional staff reports to functional manager
project activities & project manager
Limited Role of functional manager Important role
Simple Complex
Temporary staff Permanent staff
Free Form Structure

▪ Rarely adopted
▪ Highly flexible
▪ No superior subordinate relation
▪ Suitable for sophisticated activities

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