ORGANISATIONAL STRUCTURE KEY TERMS

1
ORGANISATIONAL STRUCTURE - KEY TERMS

• Formalisation - level of written documentation
  policies, procedures, job descriptions etc
• Specialisation - degree to which tasks are
  divided into separate jobs
• Standardisation - extent to which similar work
  activities are performed in a uniform manner
• Centralisation - describes the locus of decision
  making in the organisation centralised
  organisations are characterised by a
  concentration of decision making at the top of
  the management hierarchy

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CENTRALISATION

• senior mgt can exercise greater control
• procedures can be centralised for organisation as
  a whole
• decisions can be taken from a global perspective
• easier to maintain balance between depts and
  functions
• senior mgt more experienced decision makers
• centralised mgt better in times of crisis

3
DECENTRALISATION

• reduced stress and burden on senior mgt
• greater job satisfaction for subordinates
• subordinates may have better local knowledge
• delegation increases flexibility and
  responsiveness to change
• decentralisation can be used to train managers
• decentralisation may lead to improved control

4

• LINE FUNCTIONS
• those directly involved in fulfilling the
  organisations prime mission eg production and
  marketing departments, in the case of a
  manufacturing company
• STAFF FUNCTIONS
• specialist functions which exist to support,
  guide or direct the line departments in
  specialised areas eg accountancy departments,
  legal departments

5
ORGANISATION STRUCTURE

• a social unit deliberately constructed to seek
  specific goals
• characterised by
• planned divisions of responsibility
• power centres to control its efforts
• an explicit hierarchy and a well defined
  structure
• a communication network
• All organisations are goals led open systems

6
CHARACTERISTICS OF OPEN SYSTEMS

• rely on environment for survival
• transform environmental inputs into environmental
  outputs
• whole is greater than the sum of the parts
• are hierarchical
• tend toward increased elaboration over time

7
SPAN OF CONTROL

• basic building block of organisational structure
• simply - number of subordinates who report to
  each manager
• 1 - 10 narrow span
• 11 wide span
• Determines whether the organisation has a TALL or
  a FLAT structure

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SPAN DETERMINED BY

• managers ability
• subordinates abilities
• geographical dispersion
• similarity of subordinates work
• nature of potential problems
• amount of self help available to subordinates
• nature of controls required
• availability of managerial support

9
TALL STRUCTURES

• Thought by classical theorists to be inefficient
  because of
• increased overheads
• communication problems
• ill defined mgt roles
• duplication of effort
• planning and co-ordination problems
• However, a contemporary view is that tall
  structures may facilitate team working, with all
  its attendant benefits

10
FLAT STRUCTURES

• result in delegation (motivational)
• facilitate communication
• clarify mgt hierarchies
• result in meaningful progression for employees
  (less frequent promotions, but greater increases
  in authority between levels)

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TYPES OF DEPARTMENTATION

• area
• product
• brand
• function
• customer / market segment
• equipment specialisation
• shifts
• numbers

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MINTZBERGS STRUCTURE IN 5s

• 5 component parts
• 5 co-ordinating mechanisms
• 5 structural configurations

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COMPONENT PARTS

• STRATEGIC APEX
• overall responsibility
• includes MD and Board
• ensures org. serves its mission
• interprets environment and develops strategies
• manages boundary relationships
• MIDDLE LINE
• joins apex to operating core
• consists of 1st line supervisors, plant managers
• also includes departmental heads
• OPERATING CORE
• work directly related to the production of goods
  and services
• secure inputs for the process
• transform inputs into outputs, and distribute
  outputs

14

• TECHNOSTRUCTURE
• control analysts
• serve to effect standardisation
• includes work study analysts, planning and
  control analysts, personnel analysts
• SUPPORT STAFF
• provide support outside the operating work flow
• have no direct influence
• provide indirect support to the organisation
• includes recreational facilities, post room etc

15
COORDINATING MECHANISMS

• Mutual Adjustment
• Direct Supervision
• Standardisation of Work Processes
• Standardisation of Outputs
• Standardisation of Knowledge and Skills

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STRUCTURAL CONFIGURATIONS

• SIMPLE STRUCTURE
• based on direct supervision strategic apex key
  component
• MACHINE BUREAUCRACY
• based on standardisation of work processes
  technostructure key component
• PROFESSIONAL BUREAUCRACY
• based on standardisation of skills operating
  core key component

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• DIVISIONALISED FORM
• based on standardisation of outputs middle line
  key component
• ADHOCRACY
• based on mutual adjustment key component
  continually evolving

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• As the organisation increases in size and
  complexity, the preferred means of coordinating
  tends to move from
• mutual adjustment, to
• direct supervision, to
• standardisation of work processes, to
• standardisation of skills, to
• standardisation of outputs, to
• mutual adjustment

19

• As organisational work becomes more complicated,
  the favoured means of coordination seems to shift
  from mutual adjustment to direct supervision to
  standardisation, preferably of work processes,
  otherwise of outputs, or else of skills, finally
  reverting back to mutual adjustment
• (MINTZBERG)