5C001- Organizational Performance and Culture in Practice

5C001- Organizational Performance and Culture in Practice

Week 1: Organizational Structure and Strategy: fit for purpose?

1- Introducing organizational types and structure

Different types of structure

The main types of organizational structure which we will be covering are:

· Tall (hierarchical): describes organizations that include many layers of management resulting in operational employees (on the ground) separated by some distance from senior leaders and strategic decision-making.

· Management layers may result in managers have relatively small span of control when compared to flatter organizations.

· Decisions are usually made at the top of the organization with implementation of these decisions cascaded down through the management layers below.

· The hierarchy may be combined with a split of functions (HR, Finance, etc..) or by project, or product type.

· Flat: Employees who carry out essential operations of business have regular access to or involvement with senior managers without layer of middle management.

· As business grow, this can result in a very large number of employees reporting into a very small number of managers.

· Functional: is where people are grouped according to function (HR, Finance, etc.). A hierarchical structure is commonly used within the function splits.

· A challenge for managers can be ensuring team within one function don’t forget the need to consult and communicate with other functions, or become too preoccupied with functional goals to the cost of the wider organization.

· Divisional: a set of functions all geared towards producing a specific product or service, or alternatively the are responsible for producing product or service for a certain region.

· Each division will have its own functional departments (HR, Finance, etc.) to support its operations.

· Matrix: Combines functional structure with another organizational perspective, such as products.

· This often manifests itself with different project teams working with members of different functions for specific purpose. Because of this it is often described as a project-based organizational structure.

· Network (dispersed, decentralized): Consists of a core firm at the center of the network that makes the major strategic decisions surrounded by a supporting alliance of other business that all work together to produce a particular product or service.

· The network involves both internal and external reporting lines.

· The structure is dispersed or decentralized.