ORGANIZIN

G
 Objectives

• Understand the organizational structures

- Types
- Uses; and
- Advantages and disadvantages
• Identify the appropriate type of organization structures
used in different business types
 Big Idea
We use organizational structures :

1. Explain our management team “If you want to go

fast, go alone.
2. Explain the management flow
If you want to go
3. Analyze how the company functions
far, go together.”
4. Give clear instruction on the duties,
responsibilities, and accountabilities of – African Proverb

each person in the company.

 The Different Types of
Organizational Structures
 1.
Functional Structure
• issimple and commonly known as flat organization
wherein members with similar skills are grouped into
functional departments
 Functional Structure

Chief
Executive
Officer

Human
Manufacturing Finance Accounting Marketing
Resource
 Functional Structure
Advantages Disadvantages
- Could readily obtain information and act - some difficulties in implementing organization
rapidly when required. wide programs
- requires little cost to maintain - problems in coordination and cooperation
- members can see clearer path within their - may crop up functional silos (self-centered and
functional areas narrow viewpoint of “our department”)
- promotes efficient use of resources - employees losing touch of the common
- training and skill development focus on objectives of the organization
the specialized areas of members - difficulty in coordination and communication
- abuse of power
 2. Division
Structure
• Members of the organization are grouped together to work on the
same product, services, process, or serve similar customers.

The different types of divisional structure are the following:

1. Product structure- members are grouped according to product or service
2. Geographical structure- members are grouped according to the location of
activity
3. Customer structure- members are grouped according to customers served
4. Process structure- members are grouped according to work process
 Division Structure

President

NCR Region CAR Region

Marketing Operations Finance Marketing Operation Finance

 Division Structure
Advantages Disadvantages
- facilitates diversification - increase costs due to duplication of the
- the power of the top management is functional departments
reduced - rivalries among the different divisions for
- divisional managers have more attention and resources from top
freedom management
- division or manager may be removed - conflict between the division and central
with little effect to the other divisions headquarters
 3. Matrix Structure
• combines functional and divisional structure.
Workers belong to at least two groups at the same
time
Matrix Structure
 Matrix Structure
Advantages Disadvantages
- promotes the development of terms within - two-boss system which may create confusion
projects or programs among members
- facilitates coordination and - problem o “who reports to who” may
interdependence in the organization escalate
- better communication and flexibility - may faster power struggle between the
among members two-bosses
- prevent the formation of functional silos - ambiguity may set in because the principle of
- allows sharing of skill of the specialists unity of command was broken
among group
 4. Team
Structure
• is created to complete special projects, to solve
problems, or to accomplish a task
Team Structure
 Team Structure
Advantages Disadvantages
- pooling of skills from different - it is usually temporary in nature
division with different expertise to - tendency for interpersonal conflict
swiftly and efficiently carry out the among members
special task/s - tendency for any member to be
- sharing of skills from the team self-centered or eccentric that can
members cause conflict in the team
 5. Network Structure
• is formed by having a core of full-time employees working
together with outside partners who provide support or
supply services
Network Structure
 Three Forms of Network Structure
a. Task Force – is a structure formed on a temporary basis to accomplish a
complex task that involves a number of subunits
b. Committee - is composed of selected members from different background to
bring diverse inputs and perspectives into top-level decision-making.
c. Collegial forms - are composed of members from professional background
 Network Structure
Advantages Disadvantages
- highly potential for expanding - difficulty in management if size
membership from diverse becomes too large
backgrounds - work relationship among members
- reduce costs since mostly come may also be temporary
from external groups or institutions
- have greater flexibility in dealing
with changes
 6. Virtual Structure
• is a temporary or permanent collection of geographically dispersed individuals,
groups, organizational units, or entire organizations that depend on electronic
linking in order to complete business goals
• the organization is formed by using information technology (IT) and the Internet
to communicate with members and accomplish specific objectives
Virtual Structure
 Virtual Structure
Advantages Disadvantages
- speedy and real-time communication and - lack strong bond among members
convenient connection despite distance - lack of face to face contact
- workers can work from home or - operational only in areas where IT and
somewhere else outside an office building internet facilities are efficient
- knowledge sharing form the members
Formal and Informal
Organization
 Three Features of Formal
Organization
• pertains to the degree to which the work tasks or job are standardized
Formaliza • it regulates the employee’s behavior and output
tion

• pertains to the degree of differentiation between the units based on the tasks they
Complexit perform (division of labor)
y

• pertains to the degree to which decision-making is concentrated in the organization

Centraliza • Decentralized
organization
- means decision-making is shared with the lower levels in the
tion
 Informal organizations
• have informal structures; it is important because members have
close relationships. Some examples of informal organization are the
organizations formed by wives, friends, or co-workers for special
purposes.