Forms of organization

transcript

Jul 2012

ORGANIZATION STRUCTURE

Pattern of Relationships

In Which Parts or Components Interrelated

Prescribes Relationships among Activities

and Positions

Relationships among People in the

Organization

Jul 2012

FORMS OF ORGANIZATION

Jul 2012

LINE ORGANIZATION

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LINE ORGANIZATION

SHAREHOLDERSI

BOARD OF DIRECTORSI

CHIEF EXECUTIVEI

MANAGER I

FACTORY SUPERINTENDENTI

FOREMAN FOREMAN FOREMAN FOREMAN

worker worker worker worker

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LINE ORGANIZATION1. Oldest And Simplest Form

2. Also known as Scalar Organization, Military

Organization, Vertical Organization, Departmental

Organization

3. Direct Authority is Exercised By Superior Over

Subordinates

4. Flow Of Authority Is Downwards in a straight line

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1. Simplicity

2. Fixed Responsibility

3. Better Control

4. Quick Decision

5. Flexibility

MERITS

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DEMERITS

1. Overloading

2. Lack Of Specialization

STAFF/FUNCTIONAL ORGANIZATION

Managing Director

Production manager

Marketing Manager

Sales OfficerAdvertising

Officer

Market Research

Officer

Finance manager

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FUNCTIONAL OR STAFF ORGANIZATION

1. Single authority is done away with and multiplicity

of authority is introduced

2. Authority does not flow downwards from the top in

a straight line

3. Authority is diffused

4. Boss issues orders pertaining to specialized function

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5. The worker is responsible and answerable to all his

superiors from whom he takes orders and

instructions for each of his specialized jobs

6. Authority here is divided and does not flow from

one but from many in a diffused manner

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MERITS

• Division Of Labour And Specialization

• Improved Efficiency

• Better Understanding

• Benefits of Large Scale Production

• Comparatively More Elastic

• Better Industrial Relation And Mutual Cooperation

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DEMERITS

• Multiplicity Of Authority

• Problem Of Coordination

• Fixation Of Responsibility Difficult

• Workload Increased

• Unsuitable For Small And Medium Enterprises as

compared to Line Organization

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LINE & STAFF ORGANIZATION

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LINE AND STAFF ORGANIZATION• Two Sets Of Staff Is At Work

1. ADVISORY STAFF –Staff Executive

2. SERVICE STAFF –Line Executives

• Increase In Work Of Executive Requires Services Of

Specialists

• Advice Is Provided To Line Managers By Staff Personnel

• Staff Personnel Have Right To Recommend

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MERITS

• Combination Of Both Forms

• Specialization And Complete Standardization Of

• Expert Services Are Available

• Quick And Correct Decision

• Increase In Efficiency

• Increase In Productivity And Profitability

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DEMERITS• Lack Of Responsibility

• Possibility Of Dispute over a minor issue cannot be

ruled out

• Advice Rendered Is Generally Ignored

• Specialists Feel Isolated And often Neglected

• Costly Form Of Organization

• Not Suitable For Medium And Small Sized Enterprises

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COMMITTEE FORM OF ORGANIZATION

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COMMITTEE FORM OF ORGANIZATION

• Functions Of Whole Enterprise Divided Into

Departments

• No departmental head is empowered to take a

decision on his own

• Constituted consisting of a few department heads

for a specific purpose

• Constituted In Big Enterprises

• Decision Making Body

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• Each Department Assisted By Committee

• Chief Executive is sometimes The

Coordinator/Convener Of All Committees

• He assumes the role of a leader

• The Coordinator/Convener helps in arriving at a

candid decision acceptable to all

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MERITS

• Advantages Of Group Decision

• Advantages Of Expert Advice, Experience And

Knowledge

• Fair And Better Control With Agreement Of All

• Advantages Of Coordinated Effort

• Better Communication

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DEMERITS

• Expensive Device—sessions last long, takes much time,

energy and money

• Compromising Attitude—follow path of least resistance

• Irresponsible Character—joint responsibility means no

responsibility

• Dominance Of A Few—stronger personality becomes

dominant

• Suppression Of Ideas—some members become inactive

results in bitterness, discontent

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PROJECT ORGANIZATION

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PROJECT ORGANIZATION

MANAGING DIRECTOR

Sports Goods

Division

Hosiery Division

Production Sales Finance

Plastics Division

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PRODUCT/PROJECT ORGANIZATION• Company Manufacturing Wide Range Of Products

• Products Are Different From Each Other In Terms Of

Technology, Raw Material And Manufacturing Process

• Company Revolves Around Individual Products and

Product range

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ADVANTAGE

• Main advantage is it facilitates optimal utilization of

specialized machinery and technological processes

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DISADVANTAGE

• Duplication Of Managerial Manpower

• Leading To Higher Costs

TOP MANGEMENT

PRODUCT A

PRODUCTB

PRODUCT D

PRODUCT C

FINANCE

PRODUCTION

MARKETING

PERSONNEL

MATRIX ORGANIZATION

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MATRIX ORGANIZATION

• Combination Of Project And Functional Organization

• Usually created for executing a project which

requires services of functional man as well as

specialist knowledge

• Operates Under Dual Authority

• A person is accountable to two bosses, one his usual

boss and other his boss for duration of the project