Managers select and manage various dimensions and components

Organizational Structure

Organizational design – is the procedure by which directors select and manage assorted dimensions and constituents of organisational construction and civilization so that an organisation can accomplish its ends.

Organizational construction – is the formal system of undertaking and describing relationships that

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controls, co-ordinates, and motivates employees so that they cooperate to accomplish an

organisation ‘s ends.

Your undertaking as a director is to make an organisational construction and civilization that

1. Encourages employees to work hard and to develop supportive work attitudes

2. Allows people and groups to collaborate and work together efficaciously.

Structure and civilization affect:

i?Yiˆ Behaviour

i?Yiˆ Motivation

i?Yiˆ Performance

i?Yiˆ Teamwork and cooperation

i?Yiˆ Intergroup and Interdepartmental relationships

What bearing does organisational design have on organisational behavior?

The manner a construction or civilization is designed or evolves over clip affects the manner people

and groups behave within the organisation.

Once an organisation decides how it wants its members to act, what attitudes it

wants to promote, and what it wants its members to carry through, it can so plan its

construction and promote the development of the cultural values and norm to obtain

these desired attitudes, behaviors, and ends.

How does an organisation determine which attitudes and behaviors promote?

An organisation bases these design determinations on the eventualities it faces ( a

eventuality is any event that might perchance happen and therefore must be taken into history

in be aftering ) .

The three major eventualities that determine what sort of construction and civilization an

organisation designs:

1. Organization ‘s environment

2. Technology an organisation utilizations

3. Organization ‘s scheme

An organisation do construction on footing of two cardinal footings ;

1. Distribution of authorization and

2. Distribution of duty

Distribution of authorization is well-known as the substructure of the organisation on the

other manus distribution of duty is known as superstructure.

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Distribution of Authority

Distribution of authorization determines the concatenation of bid or hierarchy of and

administration and describes the function of countries of specialist operational expertness, such

as IT, finance or forces.

Figure: Hierarchy of Authority

Hierarchy of authorization characteristics two cardinal elements and determines whether or non the

administration construction is tall or level and the other characteristic looks at the span of control.

Tall or Flat:

A tall construction has many subdivisions hence it is bit complicated even though it tries to

distribute duty at the most elaborate degree. One large job with this type of

hierarchy is, there are ever possible opportunities of taking the administration to a messy

direction due to the edifice spread between top and bottom direction. On the

other manus a level construction is the 1 which has a flatter hierarchy, means it has fewer

degree of direction. A level construction does mean to cut the spread between top

direction with underside with an purpose to actuate them and look after them from

the closest possible degree. But it has a bigger reverse as good and can be questioned

for it effectiveness to accomplish an organizational end ( s ) . Due to the fewer degree

directions are over-tasked hence stressed and easy but certainly take them off from

the finish, which is accomplishing organizational end ( s ) .

Span of Control:

Span of control signifies the figure of people a director should pull off or oversee

and should take to administration ‘s end ( s ) . In the tall construction ideally a director does

non acquire a large figure of people to oversee therefore a director ever can be focussed

towards mark on the other manus in level construction a director does acquire a comparatively

bigger figure of people to pull off or oversee, hence the get over tasked and to

some point they guide themselves towards the dark and largely end products are lower.

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Like tall and level construction there is an on-going statement in this subject ( Span of

Control ) and in world administrations are full-filing the demand of the concern to

achieve ends more efficaciously in a clip devouring mode.

As mentioned earlier research workers, faculty members could n’t place an ideal span of control

so far alternatively they said a span of control should reflect the nature of the undertaking being

supervised and should concentrate on the importance to the accomplishment of

organizational aims, complexness, preciseness, need for uniformity/consistency ( as

opposed to diverseness ) , velocity of operation, etc. Therefore, complex work usually requires a

narrow span of control, whereas workers making comparatively simple undertakings can be

controlled in larger Numberss ( a wide span ) . The other important variable is the

quality of low-level staff. Inexperienced staff by and large needs close supervising so

a narrow span of control is appropriate, as is the instance where there is uneffective

public presentation. In contrast, well-trained, experient workers can run within a broad

span of control.

Differentiation: Grouping Organizational Activities

Differentiation – is the grouping of people and undertakings into maps and divisions to

bring forth goods and services. ‘

Function – is a set of people who work together and execute the same types of undertakings

or keep similar places in an organisation.

As organisations grow and their division of labor into assorted maps additions, they

typically distinguish further into divisions.

As Campbell Soup started to bring forth different sorts of merchandises, it created separate

merchandise divisions, each of which had its ain nutrient research, quality, and fabrication

maps. A division is a group of maps created to let an organisation to

green goods and dispose of its goods and services to clients.

In developing an organisational construction, directors must make up one’s mind how to distinguish

and group an organisation ‘s activities by map and division in a manner that achieves

organisational ends efficaciously. ‘

The consequence of this procedure can be most easy seen in an organisational chart that shows

the relationship between an organisation ‘s maps and divisions.

Functional Structure

Functional construction – groups people together because they hold similar places in an

organisation, execute a similar set of undertakings, or utilize the same sort of accomplishments.

This division of labor and specialisation allows an organisation to go more


Advantages Of A Functional Structure

Coordination Advantages

1. Easy communicating among specializers – Peoples grouped together harmonizing to

similarities in their places can easy pass on and portion information with

each other.

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2. Quick determinations – Peoples who approach jobs from the same position

can frequently do determinations more rapidly and efficaciously than can people whose

positions differ.

3. Learning – Brands it easier for people to larn from one another ‘s experiences.

Therefore a functional construction helps employees better their accomplishments and abilities and

thereby enhances single and organisational public presentation.

Figure: Functional Structure

Motivation Advantages

1. Facilitates public presentation rating for supervisor – Supervisors are in a good

place to supervise single public presentation, reward high public presentation, and

discourage societal idleness. Functional supervisors find monitoring easy because

they normally possess high degrees of accomplishment in the peculiar map.

2. Facilitates public presentation rating for equals – Allows group members to

proctor and command one another ‘s behavior and public presentation degrees.

3. Creates teamwork – Can besides lead to the development of norms, values, and

group coherence that promote high public presentation.

4. Creates a calling ladder – Functional directors and supervisors are typically

workers who have been promoted because of their superior public presentation.

Disadvantages Of A Functional Structure

1. Serving demands of all merchandises – When the scope of merchandises or services that a

company produces additions, the assorted maps can hold trouble expeditiously

serving the demands of the broad scope of merchandises. Imagine the coordination

jobs that would originate, for illustration, if a company started to do autos,

so went into computing machines, and so went into vesture but used the same gross revenues

force to sell all three merchandises. Most sales representative would non be able to larn

plenty about all three merchandises to supply good client service.

2. Coordination – As organisations attract client with different demands, they may

happen it difficult to serve these different demands by utilizing a individual set of maps.

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3. Serving demands of all parts – As companies grow, they frequently expand their

operations nationally, and serving the demands of different regional clients

by utilizing a individual Se of fabrication, gross revenues, or buying maps becomes

really hard.

Divisional Structures: Merchandise, Market, And Geographic

A divisional construction that overlays functional groupings allows an organisation to

co-ordinate intergroup relationships more efficaciously than does a functional construction.

Merchandise Structure

Each merchandise division contains the maps necessary to that service the specific goods

or services it produces.

Figure: Merchandise Structure

What are the advantages of a merchandise construction?

Increases the division of labor so that the figure similar merchandises can be increased

( such as a wider assortment of contraptions like ranges, or ovens ) expand into new markets

and bring forth wholly new sorts of merchandises ( such as when an contraption shaper starts to

bring forth computing machines or ai planes ) .

Market Structure

Market Structure – Group maps into divisions that can be antiphonal to the demands of

peculiar types of clients.

Geographic Structure

An organisation confronting the job of commanding its activities on a national or

international degree is likely to utilize a geographic construction and group maps into

regional divisions to service clients in different geographic countries.

Each geographic division has entree to a full set of the maps it needs to supply its

goods and services.

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Advantages Of A Divisional Structure

Coordination Advantages

1. Quality merchandises and client service – Functions are able to concentrate their

activities on a specific sort of good, service, or client. This narrow focal point

helps a division to make high-quality merchandises and supply high-quality

client service.

2. Facilitates communication – between maps improve determination devising, thereby

increasing public presentation.

3. Customized direction and job work outing – A geographic construction puts

directors closer to the scene of operations than are directors at cardinal

central offices. Regional directors are good positioned to be antiphonal to local

state of affairss such as the demands of regional clients and to fluctuations in

resources. Thus regional divisions are frequently able to happen solutions to regionspecific

jobs and to utilize available resources more efficaciously than are

directors at corporate central office.

4. Facilitates teamwork – Peoples are sometimes able to pool their accomplishments and

cognition and brainstorm new thoughts for merchandises or improved client


5. Facilitates determination doing – As divisions develop a common individuality and

attack to work outing jobs, their cohesiveness in- folds, and the consequence is

improved determination devising.

Motivation Advantages

1. Clear connexion between public presentation and wages – A divisional construction

makes it comparatively easy for organisations to measure and honor the

public presentation of single divisions and their directors and to delegate wagess

in a manner that is closely linked to their public presentation. Corporate directors can

besides evaluate one regional operation against another and therefore portion thoughts

between parts and happen ways to better public presentation.

2. Customized service – regional directors and employees are near to their

clients and may develop personal relationships with them-relationships that

may give those directors and employees extra inducement to execute good.

3. Designation with division – employees ‘ close designation with their division

can increase their committedness, trueness, and occupation satisfaction.

Disadvantages Of A Divisional Structure

i?Yiˆ High operating and managing costs – because each division has its ain

set of maps, runing costs- the costs associated with pull offing an

organization-increase. The figure of directors in an organisation, for

illustration, additions, because each division has its ain set of gross revenues

directors, fabrication directors, and so on. There is besides a

wholly new degree of direction, the corporate degree, to pay for.

i?Yiˆ Poor communicating between divisions – Divisional constructions usually

hold more directors and more degrees of direction than functional

constructions have, communications jobs can originate as assorted directors

at assorted degrees in assorted divisions attempt to organize their


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i?Yiˆ Conflicts among divisions – divisions may get down to vie for

organisational resources and may get down to prosecute divisional ends and

aims at the disbursal of organisational 1s.

Matrix Structure

A complex signifier of distinction that some organisations use to command their activities

consequences in the matrix construction, which at the same time groups people in two ways by the

map of which they are a member and by the merchandise squad on, which they are

presently working.

Figure: Matrix Structure

In pattern, the employees who are members of the merchandise squads in a matrix construction

hold two bosses-a functional foreman and a merchandise foreman.

Coordination Advantages

1. Facilitates rapid merchandise development

2. Maximizes communicating and cooperation between squad members

3. Facilitates invention and creativeness

4. Facilitates face-to-face job resolution ( through squads )

5. Supply a work scene in which directors with different functional expertness

can collaborate to work out non-programmed decision-making jobs.

6. Facilitates frequent alterations of rank in merchandise squads

Motivation Advantages

The matrix construction provides a work scene in which such employees are given the

freedom and liberty to take duty for their work activities.

Disadvantages of a Matrix Structure

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1. Increase function struggle and function ambiguity – Two foremans doing conflicting

demands on a two-boss employee cause function struggle. Reporting relationships in

the matrix makes employees vulnerable to function ambiguity.

2. High degrees of work emphasis – Conflict and ambiguity can increase feelings of

emphasis. Trouble employees have in showing their personal parts

to team public presentation because they move so frequently from one squad to another.

3. Limited chances for publicity – because most motion is sidelong, from

squad to team, non perpendicular to upper direction places.

The extent of these jobs explains why matrix constructions are used merely by

companies that depend on rapid merchandise development for their endurance and that

industry merchandises designed to run into specific client demands. Matrix constructions are

particularly common in hi-tech and biotechnology companies.

Differentiation Summary

1. Analyze the manner your organisation groups its activities by map, and

determine whether this grouping meets the organisation ‘s current merchandise or

client demands.

2. If the figure of goods and services you are bring forthing has increased, analyze

whether you should alter to a merchandise construction.

3. If you are presently serving the demands of a figure of different groups of

clients, examine whether you should alter to a market constructions

4. If you are spread outing nationally, analyze whether you should alter to a

geographic construction.

5. If your current demand is to rush the development of new merchandises, examine

whether you should take a matrix construction.

Integration: Mechanisms for Increasing Coordination

Tall and Flat Hierarchies

The larger and more complex an organisation is, the taller is its hierarchy. Tall

organisations have many degrees in the hierarchy relation to their size ; level organisations

hold few. Problems of incorporating between hierarchal degrees emerge when an

organisation ‘s hierarchy becomes excessively tall. More specifically, communicating and

decision-making jobs start to happen. As the figure of direction degrees

additions, the clip it takes to direct messages up and down the hierarchy additions and

determination devising slows. Information passed from individual to individual can be distorted or

filtered as messages become confused and directors of course interpret messages

harmonizing to their ain involvements. These jobs further cut down the quality of determination


Decentralizing Authority

To cut down the communicating and decision-making jobs that accompany a

hierarchy ‘s growing, organisations may prefer decentalisation to centralisation,

taking to administer authorization to directors at all degrees of the hierarchy and giving

them duty for doing determinations.

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Authority is said to be centralized when lone directors at the top of an organisation

can do of import determinations.

Authority is decentralized when directors throughout the hierarchy are allowed to

do important determinations.

What are the benefits of decentalisation of authorization?

1. Communication and decision-making jobs because lower-level directors

do non hold to continually confer with or describe up the hierarchy to their higher-ups.

2. At the same clip, greater occupation duties can increase motive by

doing lower-level occupations more interesting and rewarding.

Common Adjustment

Common accommodation – the on-going informal communicating among different people and

maps that is necessary for an achieve its ends.

Common accommodation makes an organisation ‘s construction work swimmingly, and directors

must invariably do attempts to advance it and make all they can to ease

communicating and the free flow of information among maps.

Common accommodation, for illustration, prevents the outgrowth of different orientations that

can do important communicating and decision-making jobs between maps

and divisions.

An organisation has to construct into its construction incorporating mechanism that facilitate

common accommodation and do it easy for directors and employees in different maps

and divisions to run into and organize their activities.

Direct Contact

In utilizing direct contact, directors from different map attempt to set up face-to-face

working relationships that allow them to work out common jobs informally, without

holding to travel through the formal channels of authorization in the hierarchy.

Liaison Roles

Acknowledging the importance of direct contact, organisations frequently set up affair functions

that give specific functional directors the formal duty of keeping a high

degree of direct contact with directors in another map.

To ease communicating and effectual determination devising, directors in affair functions

meet on a regular basis to interchange information, and members of one map transmit

petitions to other maps through these liaison forces. Over clip, the personal

working relationships that develop among directors executing affair functions heighten

coordination and integrating throughout the organisation.

Teams and Task Forces

When two or more maps are involved in determination devising, organisations frequently

make inter-functional squads and undertaking forces to ease communicating and


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The 3rd chief tool that organisations can utilize to command their activities and

integrate maps and divisions is standardization-the development of modus operandi

responses to repeating jobs or chances that specify how single and

maps are to organize their actions to carry through organisational ends.

Standardizing Input signals

Organizational inputs include the accomplishments and capablenesss of directors and workers, the

quality of the natural stuffs and constituent parts used to do merchandises, and the

machinery and computing machines used in the production procedure.

Organizations can standardise the accomplishments of their directors and workers by necessitating

them to hold certain makings and experiences.

Organizations that recruit and choice workers who meet rigorous standards can be

comparatively confident that their employees will react in appropriate ways to uncertain


Standardizing Throughputs

To standardise throughputs ( the transition processes that an organisation uses to

convert inputs into end products ) , organisations develop public presentation plans that specify

the behavior they expect from their employees.

When behaviors are specified, both persons and groups act systematically in ways

that allow an organisation to accomplish its ends.

The chief manner in which organisations standardize behaviors is by the usage of regulations

and criterion operating processs ( SOPS ) . ”

Because regulations and SOPs stipulate the series of actions or determinations that employees are

expected to execute in a given state of affairs, they standardize employee responses to the

state of affairs.

Formalization – is the usage of regulations and criterion operating processs to command an

organisation ‘s activities.

The more an organisation can trust on formalisation to stipulate needed behaviors, the

less it needs to utilize either direct supervising from the hierarchy or common accommodation.

Formalization can ensue in lower operating costs and therefore increased organisational

public presentation. Once regulations have been developed, they are cheap to utilize and be

small to implement and keep. All that is required is that new employees be taught

the appropriate regulations to follow in certain state of affairss. Although some regulations are necessary

to the smooth running of an organisation, excessively many regulations can give rise to a figure of


1. Excessive formalisation can straitjacket employees and forestall them from

reacting creatively and flexibly to new state of affairss.

2. Employees ‘ disposition to obey regulations without believing about their effects

can cut down the quality of organisational determination devising.

3. Excessively much accent on the usage of bing regulations and public presentation plans can

do it particularly hard for an organisation to do alterations and develop

new regulations.

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Standardizing Outputs – Organizations can standardise end products, the goods and

services they produce, by stipulating the degree of public presentation they require from their

employees and puting criterions by which to mensurate existent employee end products.

Alternatively of stipulating the behavior the organisation can anticipate from its employees

( as regulations and SOPs do ) , the organisation specifies what the end product of its employees

must be for the organisation to accomplish its ends. ”

Organizations try to standardise an employee ‘s end product by stipulating gross revenues ends for

sales representative, such as how much they should sell each month or how many clients they

should see each twenty-four hours. Stipulating ends for research workers is more hard because their

work is so long-run and complex, but an R & A ; D map can be measured by the

figure of new merchandises it develops or the figure of new patents it files.



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