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Structural Implementation

The document discusses different types of organizational structures including vertical, horizontal, entrepreneurial, functional, divisional, SBU, matrix, and network structures. It provides details on the key characteristics, advantages, and disadvantages of each structure type.

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PANYALA SAHITH REDDY
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35 views

Structural Implementation

The document discusses different types of organizational structures including vertical, horizontal, entrepreneurial, functional, divisional, SBU, matrix, and network structures. It provides details on the key characteristics, advantages, and disadvantages of each structure type.

Uploaded by

PANYALA SAHITH REDDY
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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STRUCTURAL IMPLEMENTATION

STRUCTURE
 Arrangement of tasks and sub tasks required to implement a strategy.
 organizational strategy has 3 key components
1. Identifies Formal Relationships, including span of control, no of levels in hierarchy.
2. It specifies grouping of individuals in departments.
3. Design of system to ensure effective communication, coordination and integration
of efforts across Departments.
KINDS OF STRUCTURE
Vertical Structure
Horizontal Structure
VERTICAL STRUCTURE
 Process of Differentiation
 Involves Division of Labor and Specialization.
Dominates:
1. SPECIALISED TASKS
2. HIERACHY OF AUTHORITY
3. RULES AND REGULATION
4. VERTICAL COMMUNICATION
5. CENTRALISED DECISION MAKING
6. EMPHASIS ON EFFICIENCY
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 Also called as Tall structure.
Best suited for standardized products and services in large volumes.
Established technologies, wide market, seeking customer on
undifferentiated items.
HORIZONTAL STRUCTURE
Process of Integration among members in an organization, cross
functional systems and teamwork.
Dominates:
1. SHARED TASKS.
2. FLEXIBLE RULES AND REGULATION.
3. HORIZONTIAL COMMUNICATION.
4. DECENTRAILISATION DECISION MAKING.
5. EMPHASIS ON LEARNING.
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Its also called lean and mean organization or flat structure.
Liberal exchange of information among different layers and across
departments.
On Negative side, such structure has loss of control and high cost in
coordination.
TYPES OF ORGANISATIONAL STRUCTURES
1. ENTREPRENEURIAL STRUCTURE:
 Elementary form of structure.
 Organization owned and managed by one person.
 Typically organization serving single business, product, or serve local
markets.
 Owner looks after all decisions, day to operations of strategic nature.

Owner- manager

Employees
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ADVANTAGES OF ENTERPRENEURIAL STRUCTURE
1. Quick Decision- Making
2. Timely response to environmental changes.
3. Informal and simple organization systems.

DISADVANATGES OF ENTERPRENEURIAL STRUCTURE


4. Excessive Reliance on owner-manager
5. May divert attention of owner-manager to day-to-day operational matters
and ignore strategic decisions.
6. Increasingly Inadequate for future requirement if business expands.
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2. FUNCTIONAL STRUCTURE:
 Functional structure seeks to distribute decision making and
operational authority towards each function

CEO

Public Relation Legal

Finance HRM Production


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BENEFITS OF FUNCTIONAL STRUCTURE
1. Efficient Distribution of work through Specialization.
2. Delegation of day to day operational functions.
3. Provides time for top management to focus on strategic decisions.
DISADVATAGES OF FUNCTIONAL STRUCTURE
4. Creates difficulty in Coordination among different functions
5. Create only narrow specialization at the cost of the overall benefit of the
organisation
6. Leads to conflicts among line and staff.
3. DIVISIONAL STRUCTRUE
 In divisional structure work is divided on basis of product lines, type of
customers served and geographical area covered.
 Each separate divisions or units are created and placed under divisional-
level management under which functional structure may still operate.
ADVANTAGES OF DIVISIONAL STRUCTURE
1. Enables grouping of Functions.
2. Generate Quick Response
3. Enable top management to focus on strategic matters.
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DISADVANTAGES OF DIVISIONAL STRUCTURE
1. Problems in allocation of resource
2. Inconsistency arising from sharing of authority between cooperate
and divisional level
CEO
Cooperate
Cooperate Legal
Finance

General Manager General Manager


Div A Div B

Marketing HRM Marketing HRM


4. SBU Structure
 Strategic Business Unit
 Defined as “any part of a business organization which is treated separately
for strategic management purpose”.
 SBU created due to difficulty in top management to exercise strategic control
over a division.
ADVANTAGES OF SBU STRUCTURE
1. Establishes coordination between divisions.
2. Facilitates strategic management and control of large, diverse organization.
3. Fixes accountability at level of distinct business units.
DISADVANTAGES OF SBU STRUCTURE
1. There are too many different SBUs to handle effectively.
2. Difficulty in assigning responsibility.
3. Addition of another layer after cooperate and divisional management.

CEO

GROUP GROUP
HEAD HEAD

DIV A DIV B DIV A DIV B


5. MATRIX STRUCTURE
 In large organization, there is often a need to work on more than one products or
projects.
 Such kind of structure is created by assigning functional specialists to special
projects or new product or service.
 During the duration of project, specialists from different areas form group or team
reporting to a team leader.
 Simultaneously, these specialists will also be working in their respective parent
department .
ADVANTAGE OF MATRIX STRUCTURE
1. Allows individual specialists to be assigned where their talent is most needed.
2. Foster creativity because of poolingof diverse talents.
3. Provides good exposure to specialists in general management.
DISADVAVANTAGE OF MATRIX STRUCTURE
4. Dual accountability creates confusion and difficulty for individual team
members.
5. Requires a high level of vertical and horizontal combination.
6. Shared authority may create communication problems.
6. NETWORK STRUCTURE
 Its is also called as ‘ Spider Web Structure’ or ‘Virtual organization’
 Network structure is ‘composed of a series of project groups or collaborations
linked by constantly changing non-hierarchical, cobweb like network.’
 Structure is highly decentralized and organized around customer groups or
geographical regions.
 Core organization is only a shell, with one small headquarter acting as
‘broker’ for integrating suppliers and specialized functions performed by
autonomous teams or workforce.
 Applicable for organization facing continues changes in environment, require
quick response, high level of adaptability and strong innovation skill
ADVANTAGES OF NETWORK STRUCTURE
1. High Level of Flexibility
2. Permits Concentration on core competencies of firm.
3. Adaptability to cope with the changes in environment.
DISADVANTAGE OF NETWORK STRUCTURE
4. Loss of Control and lack of coordination as there are several partners.
5. Risks of Overspecialization as most tasks are performed by others.
6. High cost of duplication of resources could exist.
Network Structure

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