ORGANIZATIONAL STRUCTURE – AN OVERVIEW:

Structural implementation of strategy involves designing of organization structure and to interlink the various units of organization resulted from such structural design. Organizational structure is a pattern which helps in determining how the various organizational parts are inter-related to one another. It consists of activities such as allocation of task, supervision and coordination etc. which are directed towards achieving the ultimate goal of organization. Simply stated, the structure designates formal reporting relationship and also defines the levels of hierarchy.

Thus, organizational structure basically involves issues as to how the work will be divided among different departments and divisions and the coordination among such divisions to ensure that the organizational objective will be achieved.

TYPES OF ORGANIZATIONAL STRUCTURE:

The basic forms of organizational structure include the following:

  1. Line organization:

    Under this type of organizational structure, the authority flows from top level to bottom level. Each and every employee knows it clearly as to who are their superiors and who has the authority to issue orders to them.

  1. Line & staff organization:

    A line position is directly involved in the day-to-day operations of the organization. Line positions are occupied by line executives and Staff supervisors. Line personnel carry out the primary activities of a business and are considered essential to the basic functioning of the organization. Staff supervisors make the majority of the decisions and direct line executives to achieve company goals.

  1. Functional organization:

    It is a structure where units and sub units of organizational activities are on the functional basis such as Marketing, Manufacturing, Accounting, Research and Development and so on. It works very well for small and medium business concerns where the employees of work together pooling their skills and, and there are not many products or production demands

  2. Divisional organization:

    In this the organization is divided into separate autonomous units. Each unit is self-contained and can operate independently without the help of other divisions.

  3. Project organization:

    Here, the project manager is in charge of his project, and he has full authority over it. Its main objective it to overcome the weaknesses of functional structure such as delays in decision making, absence of unity of command etc.

  4. Matrix organization:

    This type of structure is usually found in large multinational business organizations. It is a company’s structure in which the reporting relationships are set up as a grid, or matrix, rather than in the traditional hierarchy. In other words, employees have dual reporting relationships – generally to both a functional manager and a product manager.

 

MATCHING ORGANIZATIONAL STRUCTURE WITH STRATEGY:

Both the structure and strategy are closely related. It is important to understand their relationship so that the structure is designed as per the needs of strategy.

Managers should keep their structures simple as possible and should cut any extra layers of management. Therefore the managers should examine the merits as well as demerits of each structural building block and try to match it with requirement of strategy.

 

Related posts: