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ORGANIZATIONAL
STRUCTURE Snoddygrind

Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights

 reserved.

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What Is Organizing?
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meaning
• Organizing
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• Poaceae Arranging the activities

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of the enterprise in
such a way that they
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systematically
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contribute to the
enterprise’s goals.

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Depicting the Organization
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• Organization Chart
• A chart that shows the
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structure of the organization awabepartment

including the title of each

manager’s position and, by
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means of connecting lines,
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who is accountable to whom
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and who has authority for
each area.

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Elements of Organizational Structure
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Control

Elements of
Organizational
Structure
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Number of people directly reporting
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• Assumes coordination through
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direct supervision
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• Wide spans: larger number of direct
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reports.
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divition • Narrow spans: fewer number of
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direct reports.

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Tall vs Flat StructuresSnog
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• Tall vs. Flat Organizations
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• Tall organizations: more 7 74
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management layers and more waugu
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hierarchical controls.
• Flat organizations: fewer
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management layer and decision workload
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making closer to the customer.

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Issues with Tall vs Flatter Structures
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• Firms moving toward flatter structures

and
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(delayering) because taller hierarchies have:
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• Higher management overhead costs rimmed

• Less information flow dunno4080825

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• Less staff empowerment Comowernonadoons

• But also problems with flatter hierarchies

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• Increases workload and stress infamous
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• Restricts management career development Enrintomaintowdy

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 Enos cen
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[Link] and Decentralization

Centralizatio
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Formal decision making authority is held by a
few people, usually at the top
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Department conscort
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Decentralization

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Decisionmaking a'Migrity

Decision making authority is

Decentralizatio
dispersed throughout the organization
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• The degree to which organizations standardize behavior

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through rules, procedures, formal training, and related
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mechanisms.
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• Formalization increases as firms get older, larger, and
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more regulated
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Problems with formalization
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• Reduces organizational flexibility
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• Discourages organizational learning/creativity
• Reduceswww
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• Increases job dissatisfaction and work stress

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 mrinuannon

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Specifies how employees and their activities are
grouped together
Three functions of departmentalization
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1. Establishes chain of command inunnonomivorio

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2. Measures of performance, etc inurednoma
measure

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3. Encourages coordination through informal
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communication

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 on
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Types of Organizational Structure

y• Functional Organizational Structure

2• Divisional Structure
3• Matrix Structure (Project-based)
• Network Organizational Structure

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 Type Fun
*Functional Organizational Structure
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Organizes employees around specific knowledge
or other resources (e.g., marketing, production)

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Finance Production Marketing

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D Business Functions Type Fun
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• Accounting ruinin
• Finance numisuviand
Loan

• Engineering
• Supply Chain
mastery
• Material Requirements Planning
and Purchasingcoin
• Shipping transportation logistic

• CRM
• Etc.
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Accounting Type FUN
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• Accounting’s purpose is to track every financial
transaction
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• Accounting systems are required by law and for

proper management
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• Needed to ensure company is making a profit
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• Accounts payable and accounts receivable track
who owes who what
• Balance sheet: picture of financial situation
•
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Includes profit-and-loss report
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Management Information Systems, Sixth Edition 13-0
 Finance Type Fun
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• Firm’s health is measured by its finances

• Information systems can improve financial
management
• Financial managers’ goal is to manage money as
efficiently as possible by: cashflow

• Collecting payables as soon as possible

• Making payments at the latest time allowed
• Ensuring funds are available for daily operations
• Investing funds not used for current activities

Management Information Systems, Sixth Edition 13-0

 Cash Management Type Fun
0

• Financial information systems help managers track

company finances
• Cash management systems: systems that deal
specifically with cash
• Electronic funds transfer: electronic transfer of
cash from one bank account to another

Management Information Systems, Sixth Edition 13-0

 Engineering Type Fun
0

• Time to market: time between generating an idea

for a product and completing a prototype
• Brainstorming: process of a group of colleagues
meeting and collaborating to generate creative
solutions and new ideas
• Minimizing time to market is key to maintaining
competitive edge
• Information systems can contribute significantly to
minimizing time to market

Management Information Systems, Sixth Edition 13-0

 amnion
Type Fun
Supply Chain Management
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into
• Supply chain: consists of procurement of raw
materials, processing materials into goods, and
delivering goods
• Processing raw materials into goods is also known
as manufacturing
• Supply chain management: monitoring,
impo t
controlling, and facilitating supply chains

Management Information Systems, Sixth Edition 13-0

 Type
Material Requirements Planning Fun
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and Purchasing
• Material requirements planning (MRP):
inventory control
• Determines when inventory needs to be restocked
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• Can predict future need based on demand forecasts
• Takes customer demand as input,g then works back to
calculate resources needed to produce goods

Management Information Systems, Sixth Edition 13-0

 Shipping
Type Fun
costreduction

• Performed by manufacturer or shipping company

• Many variables affect cost and speed of shipping,
including:
O• Length of routes
O• Sequence of loading and unloading
Sworn
O• Type of shipped materials (e.g., perishable, hazardous,
fragile)
•
O Fuel prices
•
O Road tolls

Management Information Systems, Sixth Edition 13-0

 Customer Relationship
Management Type Fun
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• Customer relationship management (CRM)

systems: designed to support any and all
relationships with customers costomer membership

• Supports three areas

• Marketing
• Sales
• Customer service
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• CRM systems capture the entire customer
experience with an organization
• All company employees who deal with the customer
have access to this information

Management Information Systems, Sixth Edition 13-0

 Targeted Marketing
0
Type Fun
• Targeted marketing: promotes to people most
likely to purchase products
• Database technology allows all companies to use
targeted marketing, even small companies
• Can direct promotional dollars to customers most
likely to buy
• Spam: cheap method of advertising involving
sending mass e-mail communications
Winning onumoudnut

Management Information Systems, Sixth Edition 13-0

 Type
Evaluating Functional StructuresFun

• Benefits
• Economy of scale
• Supports professional identity and career paths
• Easier supervision

• M Limitations
• More emphasis on subunit than organizational goals
• Higher dysfunctional conflict
• Poorer coordination -- requires more controls

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*Divisional OrganizationalType Div
Structure
Organizes employees around outputs,
clients, or geographic areas

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Lighting Consumer
Healthcare
Products Lifestyle

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 Divisional Structure Type Div
• Different forms of divisional structure
• Geographic structure
• Product structure
• Client structure
• Best form depends on environmental diversity or
uncertaintybillion

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 Type
Evaluating Divisional StructuresDiv
•
P Benefits
• Building block structure -- accommodates growth
• Focuses on markets/products/clients

• A Limitations
• Duplication, inefficient use of resources
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• Specializations are dispersed--silos of knowledge
• Politics/conflict when two forms of equal value

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 Type Matt
*Matrix Structure (Project-based)
Employees ( ) are temporarily assigned to a specific
project team and have a permanent functional unit

CEO

Game3
Game2 Project Leader
Game1 Project Leader
yepartment
Project Leader
Art Dept
Leader

Software
Dept Leader

Audio Dept
Leader

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 Matt
Type
Evaluating Matrix Structures
Benefits
I
iii
•
• Uses resources and expertise effectively
• Improves communication, flexibility, innovation
• Focuses specialists on clients and products
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• Supports knowledge sharing within specialty
• Solution when two divisions have equal importance
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•
•
B Limitations
Increases goal conflict and ambiguity
• Two bosses dilutes accountability
• More conflict, organizational politics, and stress

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 Type Net
* Network Organizational Structure
lowern'ignite
cost
Product Callcenter
development partner
partner (Philippines)
Alliance of firms (U.S.A.)
creating a product or
service Core
Firm

Supporting firms Accounting Package

partner design partner
beehived around a “hub”
(U.S.A.) (UK)
or “core” firm
Assembly
partner
(Mexico)

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 AW
Conclusion: Factors of Structure
• Size of business
• Style of leadership
• Reducing overhead costs leads to flattening of
organizational structure
• Corporate objectives – expanding to new markets
• New technologies can make current employee types
obsolete

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 Question? AIMO
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• Who defines the responsibilities of each department, and
roundowing
how can you, as an interested party, help accomplish this?

Grand

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Organizational Structure
Can divide in 2 way to
responsibilities each
department rst one is
Centralization (อ บาย)
Decentralization (อ บาย)