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    Essentials of Management: An International Perspective: Chapter 8: Organizational Structure: Departmentation

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    Jagadeesh Putturu

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    Essentials of Management: An International Perspective: Chapter 8: Organizational Structure: Departmentation

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    Jagadeesh Putturu
    42 views16 pages

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    Essentials of Management: An International Perspective: Chapter 8: Organizational Structure: Departmentation

    Uploaded by

    Jagadeesh Putturu

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
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    You are on page 1of 16

    ESSENTIALS OF MANAGEMENT:

    An International Perspective
    Sixth Edition
    Weihrich and Koontz

    Chapter 8: Organizational Structure:


    Departmentation
    After studying this chapter, you should understand:

    1. The basic patterns of traditional


    departmentation, their advantages and
    disadvantages
    2. Matrix organizations
    3. Strategic business units (SBUs)
    4.The virtual organization
    5. That there is no single best pattern of
    departmentation.

    Chapter 8. Organizational Structure: 2


    © 2004 H. Weihrich Departmentation
    Departmentation
    By Enterprise
    Function

    Chapter 8. Organizational Structure: 3


    © 2004 H. Weihrich Departmentation
    Departmentation by Enterprise
    Function
    • There is no generally accepted terminology: A
    manufacturing enterprise employs the terms
    "production," "sales," and "finance"; a wholesaler is
    concerned with such activities as "buying," "selling,"
    and "finance"; and a railroad is involved with
    "operations," "traffic," and "finance"
    • Functional departmentation is the most widely
    employed basis for organizing activities and is
    present in almost every enterprise at some level in
    the organization structure

    Chapter 8. Organizational Structure: 4


    © 2004 H. Weihrich Departmentation
    Departmentation by Territory or Geography

    Chapter 8. Organizational Structure: 5


    © 2004 H. Weihrich Departmentation
    Departmentation by Territory or
    Geography
    • Departmentation based by territory is
    rather common in enterprises that
    operate over wide geographic areas
    • The advantages and disadvantages of
    departmentation by territory or
    geography are shown in Figure 8-2

    Chapter 8. Organizational Structure: 6


    © 2004 H. Weihrich Departmentation
    Departmentation by Customer Group

    Chapter 8. Organizational Structure: 7


    © 2004 H. Weihrich Departmentation
    Departmentation
    by Product

    Chapter 8. Organizational Structure: 8


    © 2004 H. Weihrich Departmentation
    Matrix Organization

    • Matrix Organization is the combining


    of functional and project or product
    patterns of departmentation in the same
    organization structure

    Chapter 8. Organizational Structure: 9


    © 2004 H. Weihrich Departmentation
    Matrix Organization

    Chapter 8. Organizational Structure: 10


    © 2004 H. Weihrich Departmentation
    Guidelines for Making Matrix
    Management Effective
    1. Define the objectives of the project or task
    2. Clarify the roles, authority, and responsibilities of managers
    and team members
    3. Ensure that influence is based on knowledge and
    information, rather than on rank
    4. Balance the power of functional and project managers.
    5. Select an experienced manager for the project who can
    provide leadership
    6. Undertake organization and team development
    7. Install appropriate cost, time, and quality controls that report
    deviations from standards in a timely manner
    8. Reward project managers and team members fairly

    Chapter 8. Organizational Structure: 11


    © 2004 H. Weihrich Departmentation
    Strategic Business Units (SBUs)

    • Strategic Business Units are distinct


    little businesses set up as units in a
    larger company to ensure that a certain
    product or product line is promoted and
    handled as though it were an
    independent business

    Chapter 8. Organizational Structure: 12


    © 2004 H. Weihrich Departmentation
    Strategic Business Units (SBUs)

    Chapter 8. Organizational Structure: 13


    © 2004 H. Weihrich Departmentation
    Organization Structures for the
    Global Environment
    • Organization structures differ greatly for
    enterprises operating in the global
    environment
    • The kind of structure depends on a
    variety of factors, such as the degree of
    international orientation and
    commitment

    Chapter 8. Organizational Structure: 14


    © 2004 H. Weihrich Departmentation
    The Virtual Organization

    • The virtual organization is a rather loose


    concept of a group of independent firms
    or people that are connected often
    through information technology
    • These firms may be suppliers,
    customers, and even competing
    companies

    Chapter 8. Organizational Structure: 15


    © 2004 H. Weihrich Departmentation
    Choosing The Pattern Of Departmentation
    • There is no one best way of departmentizing
    that is applicable to all organizations and all
    situations
    • Managers must determine what is best by
    looking at the situation they face
    – the jobs to be done and the way they should be
    done,
    – the people involved and their personalities,
    – the technology employed in the department,
    – the users being served, and
    – other internal and external environmental factors in
    the situation
    Chapter 8. Organizational Structure: 16
    © 2004 H. Weihrich Departmentation

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