Computer Centre Organizational/Administrative Structure

The Organization structure is a skeleton or a framework that divides the total activities into related groups,
develops superior and subordinate relationship among the persons by prescribing the authorities. Thus, it
indicates the hierarchy (Persons arranged according to rank), authority structure and reporting relationships.

The organizational structure of Computer Centre differs from industry to industry. It usually depends upon,
1. Size of the organization.
2. Nature of the product/services being provided.
3. Complexity of the problems being faced

HORIZONTAL DIMENSION
The horizontal dimension defines the basic departmentation i.e. production, marketing etc. Departmentation is
the process of diving an enterprise into different parts i.e. smaller, flexible administrative units or sections.

VERTICAL DIMENSION
The Vertical dimension of the structure relate to the creation of hierarchy of superiors and subordinates, leading
to the establishment of a managerial structure. It clearly defines that who will report to whom. Considering
both horizontal and vertical aspects the formal structure of the organization gets defined.

Importance of Vertical and Horizontal Dimensions

1. To establish “Superior-Subordinate” relationship
2. To define chain of command
3. To define span of control
4. To establish flow of information
5. To get advantage of specialization
6. To make the role of each individual clear
7. To prevent duplication of work
8. To ensure optimum utilization of resources at minimum possible cost.

Span of Control

It states that how many employees can a manager efficiently & effectively manage ? OR The number of
persons who are directly responsible to the executive is called the span of control.
No single executive should have more people looking to him for controlling & guidance than he can
reasonably manage because :-
Limited time
Limited available energy.

The numbers of persons which can be effectively supervised by single executive is 6 to 8 in an average firm.
However when activities are routine then executive can supervise 20 to 30.
If span is small, an executive may tend to over supervise & may even do span leading to his subordinates.
If span is large, executive may not be able to supervise his subordinates effectively & they may become
careless or feel neglected.
Suppose, you have 4000 workers in Organization. If you divide those workers in 4 groups then you need 1000
Managers. If a span is small, you need 1000 managers and will take large amount of money in terms of
Annual Salary of Managers. But Workers will get proper supervision. Now, if we divide those workers in 8
groups then you need 500 Managers. If a span is big then you need 500 managers and will save company’s
money.

Determinants of Span of Control :

Colonel Urwick stated that the number of subordinates under one superior should range between 4 and 12
depending upon various determinants of the span of control.
(i) Competence of Superior : Competence of Superior is capable enough to handle more subordinates.
(ii) Competence of the subordinates : Competent subordinates disturb less to superior.
(iii) Nature of work : In case of repetitive work, more subordinates can be handled by one superior.
(iv) Means of communication : If subordinates use appropriate media then one superior can handle
more number of supervisors.

(v) Leadership Style : In case of autocratic style, the frequency of meeting of subordinates with
superior is high.

Merits of Span of Control :

1. Superior can supervise effectively and competently
2. Specialization is encouraged and utilized.
3. Superior can concentrate on limited area of operations.
4. Higher degree of disciplines can be exercised,
5. If results into all the advantages of tall structure.
Demerits of Span of Control :
1. It increases the scalar chain from top to bottom.
2. It demotivates the employees as the contacts between top and bottom is lengthened.
3. It results into all disadvantages of tall structure.
The advantages of a narrow span of control are :
A narrow span of control allows a manager to communicate quickly with the employees under them and
control them more easily Feedback of ideas from the workers will be more effective. It requires a higher level
of management skill to control a greater number of employees, so there is less management skill required
The advantages of wide span of control are :
There are less layers of management to pass a message through, so the message reaches more employees
faster
It costs less money to run a wider span of control because a business does not need to employ as
many managers

Describe the six key elements of the organization design ?

The elements are as follows:
1. Work specialization
2. Departmentalization
3. Chain of command
4. Span of control
5. Centralization and decentralization
6. Formalization.

Centralization and decentralization of authority

 The Process of delegation of authority primarily refers to the centralization or decentralization of
authority.
 Centralization is the degree to which decision making takes place at upper levels of the organization. If
top managers make key decisions with little input from below, then the organization is more centralized.
With a centralized structure, line and staff employees have limited authority to carry something out
without prior approval. Centralized organizations are known for decreased span of control – a limited
number of employees report to a manager, who then report to the next management level.
 Decentralization is the degree to which decision making takes place at lower-level employees provide
input or actually make decisions, the more decentralization is there.
 Decentralization seeks to eliminate the unnecessary levels of management and to place authority in the
hands of first line managers and staff – thus increasing the span of control with more employees
reporting to one manager.

Centralization
(1) Environment is stable.
(2) Lower-level managers are not as capable or experienced at making decisions as upper level managers
(3) Decisions are relatively minor.
(4) Organization is facing a crisis or the risk of company failure.
(5) Company is large.
(6) Lower-level managers do not want a say in decisions.

Decentralization
(1) Environment is complex, uncertain.
(2) Lower-level managers are capable or experienced at making decisions.
3) Decisions are significant.
(4) Corporate culture is open to allowing managers a say in what happens.
(5) Company is geographically dispersed.
(6) Lower-level managers want a voice in decisions.

Dictatorship is an example of centralized structure and democracy is an example of decentralization.

Advantages of Centralization :
1. Uniformity of decision can be maintained.
2. Quality of decision is better since each and every decision comes from top.
3. Duplication of resource utilization can be prevented.
4. Better integration of planning, directing and control activities.
5. Better coordination of work and efforts of different departments.
6. Flexibility will be high.

Advantages of Decentralization
1. Higher level management can concentrate on work.
2. It develops lower level managers to be promoted to higher level responsibilities.
3. It develops creativity and innovativeness in lower level managers.
4. It increases the morale of the lower level employees.
5. It enables to use the opportunities and local level advantages.
6. It facilitates quick and spot decision making.
7. It helps in locating the responsibilities for wrong decisions.

The degree of centralization and decentralization will depend upon the amount of authority delegated to the
lowest level. According to Allen, “Decentralization refers to the systematic effort to delegate to the lowest
level of authority except that which can be controlled and exercised at central points.

Centralization is the systematic and consistent reservation of authority at central points in the organization.

Business owners should carefully consider which type of organizational structure to use in their company.
Small organizations typically benefit from centralized organizational structures because owners often remain
at the forefront of business operations.
Larger organizations usually require a more decentralized structure since such companies can have several
divisions or departments.

Tall Structure of Organization

Meaning : If the span of control is narrow, then there will be many management levels. That is, there will be
many managers. This organization structure is called "Tall Organization Structure".
Formal : In Tall Organisation Structure, a manager has to manage only a few subordinates. Therefore, the
relationship between them will be informal. Personal relationships are possible.
Control : In Tall Organisation Structure, there is a close control because there are few subordinates.
Mistakes : In Tall Organisation Structure, there are less mistakes because of close supervision and control.
Discipline : In Tall Organisation Structure, Good discipline can be maintained because there are few
subordinates.

Flat Structure of Organization

Meaning :
If the span of control is wide, then there will be fewer management levels. That is, there will be fewer
managers. This organization structure is called "Flat Organization Structure".

Formal :
In Flat Organisation Structure, a manager has to manage many subordinates. Therefore, the relationship
between them will be formal.

Control :
In Flat Organization Structure, there is a loose control because there are many subordinates.
Mistake :
In Flat Organization Structure, many mistakes
may occur because of loose supervision and control.
Discipline :
In Flat Organization Structure, the possibility of indiscipline exists because there are many subordinates.
Cost :
Flat Organization Structure is less costly because it has less managers.
Process :
In Flat Organization Structure, Decision making and Communication is quick because there are few levels of
management.

Matrix organization is a hybrid structure. Matrix Organization is a combination of two or more organization
structures. For example, Functional Organization and Project Organization.
The organization is divided into different functions, e.g. Networking, Software Engineering, R & D, etc. Each
function has a Functional (Departmental) Manager, e.g. Network Manager, Data Processing Manager, etc.
The organization is also divided on the basis of projects e.g. Project A, Project B, etc. Each project has a
Project Manager e.g. Project A Manager, Project B Manager, etc.
The employee has to work under two authorities (bosses). The authority of the Functional Manager flows
downwards while the authority of the Project Manager flows across (side wards). So, the authority flows
downwards and across. Therefore, it is called "Matrix Organization".
Functional Manager : The Functional Manager has authority over the technical (functional) aspects of the
project.
Project Manager : The Project manager has authority over the administrative aspects of the project. He has
full authority over the financial and physical resources which he can use for completing the project.
For example, all engineers may be in one engineering department and report to an engineering manager but
these same engineers may be assigned to different projects and report to a project manager while working
on that project. Therefore each engineer may have to work under several managers to get their job done.

Advantages of Matrix Organization

Sound Decisions
Development of Skills
Top Management can concentrate on Strategic Planning : Responds to Changes in Environment
Specialization
Optimum Utilization of Resources
Motivation
Limitations of Matrix Organization
Increase in Work Load
High Operational
Absence of Unity of Command
Difficulty of Balance

Power Struggle
Morale
Complexity
Shifting of Responsibility
Virtual (Remote) Organization
You might ask yourself the question "Why do we need to go to a specific physical place to work?”
The answer often is that either "this is where the people that you work with are" or "that this is where you find
the information you need as well as the means to process it"- in summary where your office is.
But what if you no longer had to go to this place to contact the people or get the information? Instead all this
could be done electronically and you and everyone else would do their work from any location. In that case you
can have taken the first few steps to a virtual organization.

A Virtual Computer Centre is a network of Centre held together by the product. A Virtual Organization might
not have even have a permanent office. For example, “John Taylor” is a renowned company. When you try to
track down the John Taylor company, you find there are no John Tyalor designers, no John Taylor manufactures.
It is just 3 people in an office subcontracting out all functions.

A virtual organization consists a group of companies, acting as one company to fulfill a need in the marketplace.
These companies collaborate, share skills, information, products, services etc in order to meet the goal of
customer fulfillment. Indeed, a company can itself be a virtual enterprise consisting of interdependent
departments. These companies operate independently of each other but work together to meet a common goal
of meeting a need in the market.
A virtual organization or company is one whose members are geographically apart, usually working by
computer e-mail and groupware while appearing to others to be a single, unified organization with a real physical
location.

Self-Organizing Systems
Self-organizing systems are to put in simple manner – the system whose parts are separate, independent of
each other, and then these parts acts in such a way that they form connections with each other. Thus, this
system is a system that emerges from “independent parts” to interdependent parts” of the system.
Formalization 2. Responsibility :- A manager assign work to employees
Formalization refers to how standardized an organization’s & these employees has to perform the assigned duties. This
jobs are and the extent to which employee behavior is obligation is known as responsibility.
guide by rules and procedures. 3. Unity of Command :- It states that a person should
In highly formalized organizations, there are explicit jobs report to only one manager, without unity of command it
descriptions, numerous organizational rules, and clearly creates confusion & problems.
defined procedures covering work processes.

Employees have little discretion over what’s done, when

it’s done, and how it’s done. However where formalization
is low, employees have more discretion in how they do If this question will be asked, Types of
their work. organization (Line, Functional, Staff etc) should
Work Specialization be written to avoid confusion.
It is also known as division of labor. An organization is There are three main types of organizational structure:
composed of man power of different specialization or functional, divisional and matrix structure.
skills. So there should be proper division of work among Functional Structure
different workers. Functional structure is set up so that each portion of the
Advantages :- organization is grouped according to its purpose. In this type
1. Increase in production rate. of organization, for example, there may be a marketing
2. Quality of product is better. department, a sales department and a production
department. The functional structure works very well for
Disadvantages :- small businesses in which each department can rely on the
1. Workers may lose interest due to repetition of jobs. talent and knowledge of its workers and support itself.
2. Workers may not get change for job enlargement. However, one of the drawbacks to a functional structure is
3.Work becomes boredom & chances of absenteeism that the coordination and communication between
increased & reduced performance. departments can be restricted by the organizational
Chain of command boundaries of having the various departments working
It is the line of authority extending from upper separately.
organizational levels to lower levels, which clarifies who Divisional Structure
reports to whom. Mangers need to consider it when Divisional structure typically is used in larger companies
organizing work because it helps employees with questions that operate in a wide geographic area or that have separate
such as “Who do I report to?” and “ Who do I go to if I smaller organizations within the umbrella group to cover
have a problem?” different types of products or market areas. For example,
1. Authority :- It refers to the rights inherent in a managerial the now-defunct Tecumseh Products Company was
position to tell people what to do and to expect them to do organized divisionally--with a small engine division, a
it. Authority empowers the superior to make a subordinate compressor division, a parts division and divisions for each
to do the work. Lines of authority should be clearly geographic area to handle specific needs. The benefit of
established in the structure of organization in order to avoid this structure is that needs can be met more rapidly and
overlapping actions. more specifically; however, communication is inhibited
because employees in different divisions are not working
together. Divisional structure is costly because of its size
and scope. Small businesses can use a divisional structure
on a smaller scale, having different offices in different
parts of the city, for example, or assigning different sales
teams to handle different geographic areas.
Matrix Structure
The third main type of organizational structure, called the
matrix structure, is a hybrid of divisional and functional
structure. Typically used in large multinational companies,
the matrix structure allows for the benefits of functional
and divisional structures to exist in one organization. This
can create power struggles because most areas of the
company will have a dual management--a functional
manager and a product or divisional manager working at
the same level and covering some of the same managerial
territory.