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Part I
Organisation
Organisations
Organisations are social entities with a focus on goals and are deliberately designed with
structure and activity coordination systems. Organisations are liked to the external
environment. Its not a just the set of policies and procedures rather it comprises the people
and relationships.
Organizational structure
Organizational structure shows how workers use resources with the formal system of task
and reporting relationships.
Organizational design
Organizational design is a process by which the designer of a organizations creates the
organizational structure and culture.
Departmentalization
Departmentalization is the grouping of jobs into functions and divisions.
The functional structure distinguishes between all the departments necessary for the
organization to create output. It encourages learning from others since you work closely with
others of your field of expertise and this makes it easy to monitor and evaluate workers.
Downsides of the system are the creation of silos making it difficult to communicate across
silos and that departments could lose the sight of organizational goals due to preoccupation
with its own issues. The adaptability to change is rather slow due to fractured
task/department structure. Many products can also lead to disconnection and lost sight of
organizational goals. Profit portions can’t be attributed to a single department decreasing its
incentive to increase profits
The divisional structure creates separate business units for (a group of) specific outputs for a
specific costumer. Different departments are found in one business unit. The business units
can be created for product divisions, geographic structure and/or market structure. It has a
quick response to external environmental changes and it helps with solving the issue of
sharing resources across functional departments. But a dysfunctional competition among
divisions can arise making the expensive that is focused on short-term goals. It also can be
rather easily duplicated by competitors.
The matrix structure combines the advantages of the divisional and functional structure as it
groups the organization by function and product. This network is complex with a variety of
superior-subordinate reporting lines (every employee has a functional manager and a
product boss, difficult to satisfy both of them equally). The structure is very flexible and can
adjust quickly to environmental changes. But its also costly and coordination and
communication can be an issue. Also, redundancies arise due to two managers for a
department and this can also lead to conflicts due to overlapping responsibilities.
Span of Control
The span of control is basically the oversight of a manager, how many employees does she
manage? For a set of complex and dissimilar tasks a smaller span of control is recommend
as its necessary for the manager to keep track of who is doing what and how. With more
routine and similar tasks, a larger span of control is favourable since not as much monitoring
and managing is necessary because tasks are carried out over and over again.
Disadvantageous is a larger span of control as the number of relationships in the department
increases exponentially with every employee added.
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