Organisations - structure,functions and culture
Objectives
nBe able to describe the ways in whichorganisations may be structured
nKnow the characteristics of tall and flatorganisational structures
nUnderstand centralisation/decentralisation
nHave an overview of organisational functionalareas
nKnow the importance of information systems inorganisations
First - a definition!
n“the structure of an organisation can bedefined simply as the sum total of theways in which it divides its labour intodistinct tasks and then achievescoordination between them”
(Mintzberg, 1979)
Purpose of Organisational Structure
nTo allocate tasks and responsibilities(DISINTEGRATION)
nTo identify and clarify roles and levels ofresponsibility
nTo coordinate activities and roles onceallocated
n(INTEGRATION)
nTo facilitate and regulate information flowsand decision making processes
nTo serve, in some measure, as a means ofresolving differences
Issues!
nTask differentiation - how much?
nTight or loose control?
nMechanistic Vs organic?
nCentral or devolved authority?
nPrescriptive job definition?
nSpan of control?
nCommunication flows/decision making?
nExternal (environmental) factors?
Basic factors involved
nPurpose and goals
nTasks
nPeople
nTechnology
nCulture
nExternal environment
Functional Specialisation
nProfessional expertiseenhanced
nUsually effective inpractice
nTraditional form ofdepartmentalisation
nReadily accepted byemployees
nSub-optimality
nProblems adapting tochange (geographical,product diversification)
nNarrow functionalexperience less suitableas training for generalmanagers
Advantages
Disadvantages
Geographical Specialisation
nFaster decisionmaking
nUses local knowledge
nSpeedier reaction time
nSome operating costslower (storage,transport)
nAll round experiencegood training formanagers
nLoss of control by “headoffice”
nProblems co-ordinatinglocal activities
nDuplication of effort
Advantages
Disadvantages
Product Specialisation
nDevelops expertise inproducts/services
nResponsibilities clearlyidentified
nDiversification andtechnological changeeasier to handle
nSub optimality again!
nPossible co-ordinationproblems
nLoss of control bysenior management
Advantages
Disadvantages
Project C
Manager
Matrix Structure (1)
Chief Exec
Production
Finance
Research
Marketing
Project A
Manager
Project B
Manager
Vertical flows - functional authority
Horizontal flows - Project authority
Matrix Structure (2)
nCan help motivation
nHelps direct effort
nCan result in “division ofauthority/responsibility”conflicts
nResource allocationproblems
nResentment of “functionalheads”
nOne man, One boss?!
Tries to combine stability & efficiency of “functional” division with
flexibility and directness of “project based” division
Factors influencing span of control
Narrow span
Wider Span
Complex work
Simple work
Uncertain environment
Stable environment
Less able subordinates
Able subordinates
More risk/danger
Less risk/danger
Less able manager
Able manager
“Tall” Vs “Flat” structures
nSize of organisation
nComplexity & nature of operations
nProduction methods
nTechnology
nManagement style
nAmount of delegation
nSpans of control
nAbility of managers & personnel
“Tall” Vs “Flat” structures
nLarger size
nMany levels
nNarrow span ofcontrol
nLong chain ofcommand
nMore formality,specialisation &standardisation
nSmaller size(usually)
nFewer levels
nBroad span ofcontrol
nShort chain ofcommand
Decentralisation advantages
nImprovement of local decision making
nImprovement of strategic decision making
nIncreased flexibility
nReduced communication problems
nIncrease motivation of local management
nBetter training for junior management
Decentralisation disadvantages
nPossible sub-optimal decision making
nMore co-ordination problems
nControl and monitoring problems
nNeeds intelligent & well motivated juniormanagers
Don’t decentralise!
nDecisions about technologies, markets &products
nDecisions about diversification andcontraction
nDecisions about corporate finance
nDecisions about corporate personnelpolicy and key appointments
(Drucker)
The “Flexible Firm”
nCore versus peripheral activities
nFunctional flexibility for core activities
nPolyvalence/multiskilling
nOne man, one job?
nNumerical flexibility for peripheral activities
nOutsourcing
n“Hire & fire”
Business Functions
nMarketing
nProduction
nFinance
nPersonnel
nAdministration
Marketing
nWhat does the customer need?
nProduct design
nProduction levels
nStorage, distribution and delivery
nMarket Research
nAdvertising
nSelling
Production
nMaking or assembling product from rawmaterials or components
nTypes of production
äOne-off
äSmall batch
äLarge batch
äContinuous process
Finance (1)
nFinancial accounting
ä“keeping the books”
äprovision of info for taxation authorities
äproduction of statutory and traditionallyrequired documents
Finance (2)
nManagement accounting
äProvision of information for decisionmaking
nBudgets
ästatements of resources available for agiven period
äexpenditure monitoring and control
nFinancing
äAmounts and methods of raising funds
Personnel(1)
nRecruitment
nDeployment
nTraining
nSelection for promotion/advancement
Personnel(2)
n Wages/salaries & benefits
ngrievances and discipline
nTermination of employment
äretirement
äredundancy
ädismissal
ädeath!
Administration
nCreating and operating rules,procedures and regulations
nImplementing decisions and directives
nCreating and maintaining channels andmedia for communication
nImplementing changes in organisationalpolicy
Effects on Info. Systems
nIS must be tailored to suit needs
nConsider information flow requirements
nConsider control issues
nConsider culture
nConsider degree of centralisation
nConsider empowerment/delegation issues
nConsider available technology!
Further Reading
nBott et al sections 2.3, 3, 4, 8
nButel L et al (2002), BusinessFunctions, an Active LearningApproach, Blackwell, Oxford
äSections 1.1 and 4