Tasks on Organisation Structure and Management Roles

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Organizational structure refers to the way in which an organization's activities are divided, grouped, and coordinated into relationships between managers and employees, managers and employees.

An organization's departments can be formally structures in three major ways: by function, by product market, or in matrix from.



Perhaps the simplest structure is the functional structure.

The functional structure organizes the firm around traditional functional areas such as accounting, finance, marketing, operations, and so on.

This structure is one of the most common organizational structures in part because it separates the specialized knowledge of each functional area through horizontal differentiation and can direct that knowledge toward the firm's key products or services.

Firms with operations outside their domestic borders might also adopt a functional structure.

The key difference between a purely domestic organization and a multinational organization with a functional structure is the scope of responsibilities for functional heads in the multinational firm.

In a multinational, each department would have worldwide responsibilities.

Thus, while each subsidiary would have a local human resource manager, the top human resource manager would be responsible for directing worldwide human resource activities such as hiring, training appraising, or rewarding employees.

This structure is most common when the technology and products of the firm are similar throughout the world.

CEOFinancialProductionMarketingR&DHuman resourceFigure 1.1ADVANTAGES OF FUNCTIONAL STRUCTURE

Well suited to small to medium-sized firms with limited product diversification

Facilitates specialization of functional knowledge

Reduces duplication of functional resources

Facilitates coordination within functional areas


Often creates problems of coordination across functional groups

Creates restricted view of overall organization goals

Can limit attention paid to customers as functional groups focus on their specific areas

Can lead to slower organization response to market changes

Often burdens chief executives with decisions that involve multiple functions



In a product structure, the firm is organized around specific products or related sets of products.

Typically, each product group contains all the traditional functional departments such as finance, marketing, operations, human resource management, and so on.

Each product is generally treated as a profit center.

That is, the related expenses are subtracted from the revenues generated by the sales of located in the headquarters of the company.

However, this not necessarily the case.

Multinational firms also use global product structures.

This typically happens when customer needs for a given product are more or less the same the world over.

CEOProduct DProduct CProduct BProduct AFinanceR&DH/ResourceProductMarketingFigure 1.2ADVANTAGES OF PRODUCT STRUCTURE

Individuals in different functional areas within the product group focus more on the products and customers

Performance of the product is typically easier to evaluate

There is usually greater product responsiveness to market changes

It often reduces the burden of the top executive in making operating decisions compared to the functional structure


Duplication and lack of economies of scale for functional areas

Can create problems for customers who purchase products across multiple product groups

There can be more conflict between product group objectives and overall corporate objectives.

There is an increased like hood of conflict between product groups and greater difficulty coordinating across product groups



The division structure can be viewed as an extension of a product structure.

Divisions typically consist of multiple products within a generally related area, though specific products may not necessarily be closely related.

Like domestic firms multinational firms can and do use this structure.

In this case, each division is charged with worldwide responsibility.

Because division structures are generally extensions of product structure, they have many of the same advantages and disadvantages.

For large diversified multinational firms, the division structure is of the more common structures.

CEOFinanceDivisionConsumerDivisionAgroDivisionPaintDivisionGeneralManagerGeneralManagerGeneralManagerGeneralManagerR&DProductH/ResourceFinanceMarketingFigure 1.3ADVANTAGES OF DIVISION STRUCTURE

Organizing various product families within a division can reduce functional duplication and enhance economies of scale for activities

To the extent That product families within a division serve common customers, customer focus can increase

Cross-product coordination within the division is eased

Cross-regional coordination within product families and within the division is often eased


Typically only appropriate for diversified, large companies with significant numbers of specific products and products families

Can inhibit cross division coordination

Can create coordination difficulties between division objectives and corporate objectives



As the implies customer structure are organized around categories of customers.

Typically, this structure is used when different categories of customers have separated but broad needs.

Multinational firms find this organizational form difficult to implement because of differences among customers across region and countries.

CEOVice presidentMilitaryVice presidentIndustrialVice presidentRetailSmallArmyDomesticMid-sizeInternationalNavyFigure 1.4ADVANTAGES OF CUSTOMER STRUCTURE

Facilities in-depth understanding of specific customers.

Increases responsiveness to changes in customer preferences and needs as well as responsiveness to moves by competitors to better serve customer


Typically leads to duplication of functional resources in each of the customer units.

Often crease difficulty in coordinating resources in each of the customer units and corporate objective

Can fail to leverage technology or other strengths in one unit across other units.



Firms can structure themselves around various geographical areas or region.

Within this structure, regional executives are generally responsible for all functional activities and products in their regions.

A number of multinational firms employ geographical structures.

This is primarily because customers demands.

Government regulations, competitive conditions, availability of suppliers, and other factors vary significantly from one region of the world to another.

The size or scope of the region is typically a function of the volume of business.


Vice president Africa

Vice president America


Vice president

North America

Vice president


Vice president



Typically leads to in-depth understanding of the market, customers, governments, any competitors within a given geographical area.

Usually fosters a strong sense of accountability for performance in the regional managers.

Increase responsiveness to unique changes in the unique market, government regulations, economic conditions, etc.

for the geography.


Often inhabits coordination and communication between regions.

Can increase conflict and coordination difficulties between regions and corporate office

Normally leads to duplication of functional resources across the regions.

Separating production facilities across multiple regions can inhabit economies of scale

Can foster competitive behavior among the regions, which is particularly frustrating for customer who have operations across multiple regions



A matrix structure consists of two organization structures superimposed on each other.

Consequently, there are dual reporting relationships.

That is one person essentially reports to two bosses.

These two structures can be a combination of the general forms already discussed.

In multinational companies, matrix structure comes and goes with some frequency.

They come into play quite often because while economies of scale for global product, division or even customer structures are compelling, often-regional differences relative to governments, culture, languages, and economies are also strong.

In multinational firms, matrix structure goes out because they are difficult to manage.




R & D





Typically Facilitates information flow throughout the organization

Can enhance decision quality because before key decisions are made, the organization considers the two interesting perspectives.

Is best suited to a changing and complicated business environment

Can facilitate the flexible use of human resources.


Often increases complexity of performance evaluation because people often have two bosses

Can inhabit the organization's ability to respond to changing conditions quickly

Can diffuse accountability

Often leads to conflicts as the differing perspectives and objectives of the intersecting units come together


Culture is expressed by handy's has been "The way we do things" arround here.

The concept of culture involves how people want to view their relationships to one another around the globe, you can expect to find divers experiences, traditions, and practices regarding power in human relationship.


Power and influence stem from a central source.

Perhaps the owner - directors or the founder of the business.

The degree of formalization is limited, and there are few rules and procedures.

Such a firm is likely to be organized on a functional basis.

Role culture

These organizations have a formal structure, and operate by well-established rules and procedures.

Job description establishes definite tasks for each person's job and procedures are established for many work routines.

Communication between individuals and departments, and the settlement of dispute and appeals.

Task culture

Task culture is reflected in a matrix structure or else in project teams and task forces.

In such organization, there is no dominant or clear leader.

The principal concern in a task culture is to get the job done.

Person culture

In the three cultures, the individual is subordinate to the organization or task.

A person culture is found in an organization whose purpose is to serve the interest of the individuals within it.

Now we will move on to selected organization structures and culture

ABX is internationally well performing company.

This is communicating all over the island.

And three of the branches are operating as franchise branches.

ABX provides those with affiliation of UK universities.

Therefore, the Matrix structure is most suitable for it.

But, the ABX is under Flat structure.

ABX is defined by their functions, that is, the work that they do.

It is a traditional, common sense approach and many organizations are structured like this.

It is based on work specialism and managers can be technical experts.

ABX can benefit from economies of scale and division of labor.








B 9

B 8

B 7

B 6

B 4

B 5

B 3

B 3

B 2

B 1


When compare the Flat structure with Matrix structure mainly hierarchical concept of subordination of entities that collaborate and contribute to serve one common aim in all branches

The matrix structure sometimes referred to as a multiple command system." Is a hybrid that attempts to combine the benefits of both types of designs while avoiding their drawbacks.

ABX has two types of structure existing simultaneously.

Employees have in effect two bosses-that is, they work in two chains of command.

One chain of commands is functional or divisional, the type diagrammed vertically in the preceding charts.

The second is a horizontal overlay that combines people from carious divisions or functional departments into a projects or business team led a projector group.

Advantages of the structure

Easy communication among specialist- people grouped together according to similarities in their position can easily communicate and share information with each branches.

Decisions - people who approach problems from the same perspective can often make decisions more deeply and effectively than can people whose perspective differ.

Learning - makes it easy for people to learn from one another's experiences.

Thus a helps employees to improve their skills and abilities and thereby enhances individual and organizational performance.

Facilitates communication - between functions improve decision making, thereby increasing performance.

Facilitates teamwork - people are sometimes able to pool their skills and knowledge and brainstorm new ideas for products or improved customer service.

Even though there are some disadvantages :-

Coordination - as organization attract customer with different needs, they may find it hard to service these different needs by using a single set of functions.

High operating and managing costs - because each division has its own set of functions, operating costs - the cost associated with managing an organization-increase.

Poor communication between divisions - Structures normally have more managers and more levels of management than functional structure have communications problems can arise as various managers at various levels in various divisions attempt to coordinate their activities.

Conflict among divisions - divisions may start to complete for organizational resources and may start to pursue divisional goals and objectives at the expense of organizational ones.


And the selected organization depends on mix of power and task culture.

Power culture tends to rely on central figures for its strength and has lines of communication which not only radiate out form this centre but link sideways across the organization.

The boss is sits in the centre, surrounded by ever widening circles of intimates and influence.

Power does derive simply from an individual's level in the organizational hierarchy.

The culture supports a belief that power in organizations should be unequally distributed.

Power has long been a subject of considerable interest.

Task culture is concerned with the continuous and successful solution of problems.

Judged in terms of results and problems solved.

A different set of variables internal to the ABX are prominent in the task culture approach to ABX design that emerged in the 1990s.

Unit production refers to the production of individual items tailored to a customer's specification.

The span of management for first level management increases as we move from unit to mass production, but decrease when we move from mass to process production.

Because lower level employees in both unit and process production division usually do highly skilled work, they tend to from small work groups, making a narrow span inevitable.


ABX structure has a vertical component of hierarchy and a horizontal structure of working groups.

These can be arranged by territory; function; product; brand; customer; staff number and work patterns; and equipment specialization.

ABX culture is part of the wider culture of society.

It emphasizes aspect of behavior that is acceptable in the ABX context.

Culture is both internal to ABX and external to it.

The culture of ABX is embedded in the culture of the wider society.

It is true if a management culture is developed, all the managers will adopt the same way of performing the task.

if we observe the selected organization that management styles adopted in different areas we can well know that though they have mostly the same management culture, the styles adopted by these areas have distinction in between them.

There are two reasons why the management culture is differing.

Firstly, which have varied purpose, size, the environment in which they have to operate etc.

thus is becomes difficult rather unreasonable to adopt the same type of management culture.

Stability in negotiations process is a major concern of structure and their culture counter parts because their relationship is one that they usually anticipate will continue into the future indefinitely.

It is also a concern because, generally speaking across industries in the ABX and over many decades stability has been elusive in structure - culture relationship.

FACTORS INFLUENCE THE INDIVIDUALBEHAVIORThe individual's expectation of the organization

This is mainly reflected in is word call psychological contracts formal contracts between people are written documents, which state rights and obligations.

However, the same contracts can sometimes be mentally entered into without it being in writing.

These are psychological contracts.

These contracts can now exist between employees and the organizations.

The employee is willing to put forward effort and intern has certain expectation of the organization.

The employer intern has certain expectation from the employee for which to take salaries and benefits.

Does if a person's expectations are not properly met by the organization.

This can have an adverse effect on performance and it can demotivate problems.

The job fit

Effective performance comes through when the person and the job have a good fit.

The person knowledge, experience and skill levels need to match with the requirements of the job.


The employees' personality

A person's personality can have three traits, which effect their behavior at work

Agreeableness - effects how people get along with others

Conscientiousness - a person's commitment towards work and dedication

Attitude - this could form through experience, family background level of education, religious believe etc


A contingency approach is one which argues that the ability of a manger to be a leader, and to influence the subordinate work group, depends on the particular situation, and will vary from case to case.

Contingency theory asserts that when staffs take a solution, they should have into responsible all aspects of the current situation and act on those aspects that are steps to the situation at hand.

Basically, it's the approach that "it depends."

This approach is linked to the theories to designing organizations, which rejects the notion of universally applicable principles and proceeds via a consideration of the dominant factors in a given situation.

Contingency approach to ABX developed as a reaction to the idea that are "universal principles" for designing ABX and moving staff and so on.

Newer research indicated that different forms of ABX structure could be equally successful, that there was no inevitable effectiveness, and that there were a number of variables to be considered in the design of the ABX and their styles of management.

Essentially it depends on the total picture of the internal factors and external environment of ABX.

2.1.2 Systems approachThere are 4 concepts underlie Systems approach.Which is :-

Specialization :- A system is divided into smaller components allowing more specialized concentration on each component.

Grouping :- To avoid generating greater complexity with increasing specialization, it becomes necessary to group related disciplines or sub-disciplines.

Coordination :- As the components and subcomponents of a system are grouped, it is necessary to coordinate the interactions among groups.

Emergent :- Dividing a system into subsystems (groups of component part within the system), requires recognizing and understanding the "emergent properties" of

a system; that is recognizing why the system as whole is greater than the sum of its parts.

For example, 2 forest stands may contain the same tree species, but the spatial arrangement and size structure of the individual trees will create different habitats for wildlife species.

In this case, an emergent property of each stand is the wildlife habitat.

Let's look at ABX.

Inputs will include things such as raw materials, money, technologies and people.

These inputs go through a process where they're planned, organized, motivated and controlled, ultimately to meet the ABX's goals.

Outputs would be products or services to a market.

Outcomes would be, enhanced quality of life or productivity for customers/clients, productivity.

Feedback would be information from human resources carrying out the process, customers/clients using the products, etc.

Feedback also comes from the larger environment of the ABX.

The systems approach emphasizes the existence of sub systems, or parts of the bigger system.

Trist and bam forth developed an approach which suggested that an organization can be treated as an open "Socio-technical" system.


Scientific management

Concerned with improving the performance of individual workers.

Fredric Taylor developed this system, which he believed would lead to a more efficient and productive work force.

Develop a science for each element of the job

Scientifically select employees and then train them to do the job

Supervise employees to make sure they follow prescribe methods

Continue to plan replace employees who do not show high achievement


Administrative management

Whereas scientific management deals with the jobs of individual employees, administrative management focuses on managing the total ABX.

Administrative management laid the foundation for later development in management Theory.

It is more appropriate for stable and simple organizations than for today's dynamic and complex ABX.

14 principle of management

Division of work

Authority with responsibilities


Unity of command

Unity of direction

Subordination of individual interests


Scalar chain



Personnel tenure


Spirit de corps


Bureaucracy management

Outline the concept of Bureaucracy based on a rational set of guidelines.

Most logical and rational structure.

Traditional authority

Founded on legal or rational authority, which is based on law, procedures or rules.

Charismatic authority stems from personal qualities of the individual.

Foundation of contemporary organization theory.

Works not know in English until 1947.

Efficiency in Bureaucracies comes from:

Clearly defined and specialized functions.

Use of legal authority

Hierarchical form

Written rules and procedures

Technically trained bureaucrats

Appointment to positions based on technical expertise.

Promotions based on competence

Clearly defined career paths.


Elton mayo - the Hawthorne experiment

The Hawthorne experiment was originally done by the western electric company in the US within their hawthorn plant.

The main purpose of the experiment was to examine how different working conditions had impact on worker output & efficiency.

In lieu with this lighting, heating, the working week, working hours within a day, breaks were altered to see its effects on output.

However the results were contradictory in that no matter how adverse working conditions were made outputs was still rising.

Since this scenario could not be explain a professor Elton Mayo was called in.

Mayo continued the experiment by isolating six vary workers in a special room.

They were given changing working conditions.

Productivity was still rising.

Mayo concluded two factors to be causing this.


Group Atmosphere

The workers enjoyed in the company and had well inter personal relationship.

Their social needs were effectively affected.


The experimenter effect

Mayo himself was having an impact on the result; since the workers were isolated for the study they felt special and recognized.

This was motivating well.

The overall conclusions of the experiment indicate people are not nearly motivated by money and working conditions as indicated by Taylor.

They want to be treated with respect and have their social needs main in their work place.

We shall compare ABX with another organization.For an example,We shall compare ABX management theories with DIALOG.

DIALOG uses Entrepreneurial style.

Every human is innovative and thus always tries to initiate unfolding the mysteries of nature.

Conservation leads to survival whereas entrepreneurship leads to seeking, rather creating opportunities for growth.

This very fact nurtured the inherent qualities of innovation, probing and adventures.

This has breaded entrepreneurship in the world of trade and commerce as well as in all fields of life.

ABX management theory follows Taylor's scientific management; man is an economic creature, responding directly to money.

Therefore, workers follow management's orders and work harder if they can earn money.

An employee related to their work, rather like machines, and made as efficient as it was theoretically possible to make them.

Extend of work in a task performance is determined by employees physical capacity.

Therefore productivity increased by the efficiency of the workers.

The managers approach their jobs in arbitrary rule of thumb way.

If ABX use entrepreneurial style,

That which leads the ABX to the ditch of failure.

If ABX ignores any of the fundamentals of management excellence, it is sure that it may not give desired results.

If all the powers and decision making, rights are concentrated in one person, his decisions, may be overpowered.

Aged are more conservative on the other hand younger's that means new generation possesses entrepreneurship.

But unless this style is backed with conservatism in true sense, it may lead to over enthusiasm which is prone to unnecessary risk taking and thereby landing in trouble.

TASK 033.1 DIFFERENT TYPES OF LEADERSHIP3.1.1 Autocratic leadership style

Under this all the authority and decision making powers are vasted in leader himself.

He is workcentred or leadercentred.

He designs the workload and work situation for his employees.

3.1.2 Democratic leadership style

Under this style leader allows the participation of subordinates in decision making process.

Leader gives responsibility as well as freedom to the subordinates.

3.1.3 Group centered leadership style

Under this style a leader gives full freedom to his subordinates to take decisions.

Entire authority in decision making is given to subordinates.

Under this type of leadership, a little direction is involved.

3.1.4 Bureaucratic leadership style

As is clear from the name of the style all activities of the groups are governed by the rules and regulations already framed and brought into operation.

The leader are not supposed rather are not required to take any decision, as even the procedures are already laid down.

3.1.5 Manipulate leadership style

This is typically style of leadership.

The leader uses his acquaintance with the subordinates for achievement of his goals.

As the subordinates believe in their leader they tell him all their needs and desires with an expectation that the leader will help them in fulfillment of these needs and desires.

3.1.6 Expert leadership style

This type of leadership style is basically meant for meeting critical situations.

A regular leader needs not be expert in all the matters and therefore may not be able to sort out some problems.

In selected organization following an autocratic leadership style, all the decisions are taken by him only; subordinates are not to participate in decision

Making process.

Autocratic leader directs, motivates and controls his subordinates.

The subordinates are bound obedience and adherence to his directions.

In this type of style, quick decisions and its quick implementation is possible.

It is a style of one way communication.

In this style the leader instructs the subordinates and the subordinates have simply to follow.

Leadership function is a matter of pushing people in ABX until they do what the leader wishes them to do.

Leadership is primarily a matter of removing barriers so that people can act with freedom and independence.

Leadership encourages and stimulates action from workers by innovating them in planning and decision making activities.


There are varieties of Motivational theories in practically.

3.2.1 Abraham Maslow higherarchy of needs

Maslow is a clinical physiologist presents his fighting on motivation after doing research amongst his patients according to him.

Man is motivated towards achieving fire category of needs which can be arranged in a higherarcy or order of importance.

The theory is based on two important principles

The deficiency principle

The progressive principle

Self needsSelf esteem needsSocial needsSafety needsPhysiological needsFigure 3.1

Once the need met the next need on the higheracy now motivates behavior.

Physiological needs: The need for food, water, shelter, which must we met for survival.

Safety needs: The need for order security, certainty and predictability in life and freedom from the eat.

Social needs: The need for friendship, affection, love and relationships.

Self esteem needs.

The need for recognition and respect and to sealed as important in the eyes of others.

Self actualized needs: The need to reach once fullest potential.

3.2.2 Hertz Berg - Two Factor Theory

Hertz Berg research indicates two sets of disinfectors are responsible for

Preventing dissatisfaction at work

Causing satisfaction at work

The factors which prevent dissatisfaction are referring to as the hygiene factors and our normally associated with the job contexts.

However just because hygiene factors are made job satisfaction doesn't occur.

Simply prevented dissatisfaction for satisfaction occurs the motivational factor needs to be presented these are connect to the job content.

Hygiene Factors Motivations

Looking conditions