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Organizational Structure : Types and Classification

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This document discusses different types of organizational structures. It begins by defining an organization and organizational structure. There are two main types of traditional structures discussed: line structure and functional structure. Line structure is the simplest with a clear chain of command, while functional structure groups employees by skills. Another traditional structure is the line and staff structure, which combines operational and support roles. Modern structures discussed are project structure, where experts from different functions work temporarily on a project, and matrix structure, which combines functional and project approaches simultaneously. The document provides details on the characteristics, advantages, and disadvantages of each structure type.

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Types andTypes and Classification OfClassification Of OrganizationalOrganizational structuresstructures
Group members • Dhruvin Modi (Group Leader) • Saumya Kotiyan • Prachi Biyala • Hinal Goradia • Priyanka Gholap • Sneha Mishra
What is organization? • Basically, an organization in its simplest form ,is a person or group of people intentionally organized to accomplish an overall, common goal or set of goals.
What is a structure? ACC. TO KAST AND ROSENZWEIG, “STRUCTURE IS THE ESTABLISHED PATTERN OF RELATIONSHIPS AMONG THE COMPONENT PARTS OF THE ORGANIZATION.”
What is Organizational structure? • Organizational structure determines the manner and extent to which roles, power, and responsibilities are delegated, controlled, and coordinated, and how information flows between levels of management. • An structure depends entirely on the organization's objectives and the strategy chosen to achieve them.
Types of organisation ›TRADITIONAL STRUCTURE 1.LINE STRUCTURE 2.FUNCTIONAL STRUCTURE 3.LINE & STAFF STRUCTURE › MODERN STRUCTURE 1. PROJECT STRUCTURE 2.MATRIX STRUCTURE
Line Structure Line Structure is the OLDEST and SIMPLEST form of INTERNAL ORGANIZATION STRUCTURE. It was first developed by the ROMAN ARMY and the latter adopted by ARMIES all over the world. Factory owners also used LINE ORGANIZATION in its purest form in the NINETEENTH CENTURY IN ENGLAND. In LINE ORGANIZATION, top management has complete control and the CHAIN of COMMAND is clear and simple. MANAGEMENT has complete control.
Advantages  SIMPLICITY  DISCIPLINE  ECONOMICAL  STRICT CONTROLS  FLEXIBILITY  HIGH MORAL
Disadvantages
Line and Staff Organization ACCORDING TO LOUIS ALLEN, “LINE REFERS TO THOSE POSITIONS AND ELEMENTS OF AN ORGANIZATION, WHICH HAVE THE RESPOSIBILITY AND AUTHORITY AND ARE ACCOUNTABLE FOR ACCOMPLISHMENT OF PRIMARY OBJECTIVES. STAFF ELEMENTS ARE THOSE WHICH HAVE RESPONSIBILITY AND AUTHORITY FOR PROVIDING ADVICE AND SERVICE TO THE LINE IN ATTAINMENT OF OBJECTIVES.”
Advantages  LESS BURDEN ON EXECUTIVES  SERVICES OF EXPERTS AVAILABLE  LIMITED TENSION ON LINE MANAGERS  BENEFITS OF SPECIALIZATION  TRAINING OPPURTUNITIES TO EMPLOYEES  FLEXIBILITY
Limitations  DELAY IN DECISION-MAKING  BUCK PASSING AMONG EXECUTIVES  CONFLICTS BETWEEN LINE AND STAFF  EXECUTIVES  COSTLY ORGANIZATION  COMPLICATED IN OPERATION  DISCIPLINE IS AFFECTED
Reasons for conflicts between line and staff ARGUMENTS OF LINE EXECUTIVES AGAINST STAFF  DILUTION OF AUTHORITY  LACKS PRACTICAL KNOWLEDGE  LACKS HUMAN SKILLS  DOMINATION OF STAFF MANAGERS  STRESS ON PAPERWORK ARGUMENTS OF STAFF EXECUTIVES AGAINST LINE  RESISTANCE TO NEW PLANS AND IDEAS  INADEQUATE SUPPORT FROM LINE EXECUTIVES  LIMITED COOPOERATION FROM LINE EXECUTIVES  SUPPLY OF INADEQUATE INFORMATION
Solutions for resolving the conflicts  RELATIONSHIP SHOULD BE NOTED IN WRITING  CLEAR UNDERSTANDING OF STAFF ROLE  FREQUENT MEETINGS  SELECTION OF COMPETENT STAFF  STAFF SHOULD BE TREATED AS TEAM MEMBERS OF THE GROUP  QUICK SETTLEMENT OF CONFLICTS
Project Structure THE TERM PROJECT REFERS TO A UNIQUE AND COMPLEX CLUSTER OF ACTIVITIES TO BE COMPLETED WITHIN FIXED TIME AND COST. THEY ARE DISSOLVED ONCE THE GOAL IS ACHIEVED. EG- THE GOAL MAY BE TO CONSTRUCT A NEW RAILWAY BRIDGE. SPECIALISTS FROM DIFFERENT FUNCTIONAL DEPARTMENTS ARE BROUGHT TOGETHER TO WORK IN HARMONY. THE FUNCTIONAL DEPARTMENT MAY BE PRODUCTION, ENGINEERING, QUALITY CONTROL, PRODUCT ANALYSIS, ETC. WHEN THE PROJECT IS COMPLETED, THESE SPECIALISTS RETURN TO THE RESPECTED DEPARTMENTS
Uses a) OBJECTIVES b) TIME-BOUND c) UNRELATED WITH DAILY ADMINISTRATIVE WORK d) IN NEED OF SPECIALISED SKILLS e) ITS TEMPORARY
Limitations  CONFLICTS IN APPROACH  LACKS CLARIFY OF ROLES  CONFLICTS BETWEEN DEPARTMENTS  UNCERATIN FUTURE  LACKS CLEARITY OF COMMANDS
Functional organizational structure • Employees are grouped together according to their similar tasks, skills or activities. Functional structures are suitable for SMEs with high level of specialization. The decision making is centralized at the top of the organization.
Benefits of functional organizational structure • Efficient use of resources; • In-depth skill development; • Clear career paths; • Strategic decisions are made on the top of the organization.
Disadvantages of functional design • Slow decision making • Less innovative. • Performance responsibility is unclear; • Limited management training. • Poor coordination across functions.
Matrix Organization • Matrix Organization was introduced in USA in the early 1960's. It was used to solve management problems in the Aerospace industry. • 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. Purchase, Production, R & D, etc. Each function has a Functional (Departmental) Manager, e.g. Purchase Manager, Production 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 employees has to work, under two authority (bosses). The authority of functional manager flows downwards while the authority of project manager flows across (sideward). So the authority flows downwards and across. Therefore, it is called “MATRIX ORGANISATION”.
Matrix design • It implements functional and divisional structures simultaneously in each department. • The worker in each department is being supervised by two bosses at the same time. • It is suitable for the following situations: - Environmental pressure exists for a dual focus; - Large amount of information needs to be processed; - Innovations are performed - Organization is working on several projects together. - Efficiency is needed in the use of resources.
Strengths of matrix design • Provides flexibility; • Encourages resource efficiency; • Enhances skill development; • Increase motivation and commitment; • Helps top management in planning process.
Weaknesses of matrix design • Creates dual authority confusion; • Is time consuming; • Generates high implementation cost; • Requires interpersonal skill training; • Spawns power struggle.
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Organizational Structure : Types and Classification

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Organizational Structure : Types and Classification

  • 1. Types andTypes and Classification OfClassification Of OrganizationalOrganizational structuresstructures
  • 2. Group members • Dhruvin Modi (Group Leader) • Saumya Kotiyan • Prachi Biyala • Hinal Goradia • Priyanka Gholap • Sneha Mishra
  • 3. What is organization? • Basically, an organization in its simplest form ,is a person or group of people intentionally organized to accomplish an overall, common goal or set of goals.
  • 4. What is a structure? ACC. TO KAST AND ROSENZWEIG, “STRUCTURE IS THE ESTABLISHED PATTERN OF RELATIONSHIPS AMONG THE COMPONENT PARTS OF THE ORGANIZATION.”
  • 5. What is Organizational structure? • Organizational structure determines the manner and extent to which roles, power, and responsibilities are delegated, controlled, and coordinated, and how information flows between levels of management. • An structure depends entirely on the organization's objectives and the strategy chosen to achieve them.
  • 6. Types of organisation ›TRADITIONAL STRUCTURE 1.LINE STRUCTURE 2.FUNCTIONAL STRUCTURE 3.LINE & STAFF STRUCTURE › MODERN STRUCTURE 1. PROJECT STRUCTURE 2.MATRIX STRUCTURE
  • 7. Line Structure Line Structure is the OLDEST and SIMPLEST form of INTERNAL ORGANIZATION STRUCTURE. It was first developed by the ROMAN ARMY and the latter adopted by ARMIES all over the world. Factory owners also used LINE ORGANIZATION in its purest form in the NINETEENTH CENTURY IN ENGLAND. In LINE ORGANIZATION, top management has complete control and the CHAIN of COMMAND is clear and simple. MANAGEMENT has complete control.
  • 8. Advantages  SIMPLICITY  DISCIPLINE  ECONOMICAL  STRICT CONTROLS  FLEXIBILITY  HIGH MORAL
  • 10. Line and Staff Organization ACCORDING TO LOUIS ALLEN, “LINE REFERS TO THOSE POSITIONS AND ELEMENTS OF AN ORGANIZATION, WHICH HAVE THE RESPOSIBILITY AND AUTHORITY AND ARE ACCOUNTABLE FOR ACCOMPLISHMENT OF PRIMARY OBJECTIVES. STAFF ELEMENTS ARE THOSE WHICH HAVE RESPONSIBILITY AND AUTHORITY FOR PROVIDING ADVICE AND SERVICE TO THE LINE IN ATTAINMENT OF OBJECTIVES.”
  • 11. Advantages  LESS BURDEN ON EXECUTIVES  SERVICES OF EXPERTS AVAILABLE  LIMITED TENSION ON LINE MANAGERS  BENEFITS OF SPECIALIZATION  TRAINING OPPURTUNITIES TO EMPLOYEES  FLEXIBILITY
  • 12. Limitations  DELAY IN DECISION-MAKING  BUCK PASSING AMONG EXECUTIVES  CONFLICTS BETWEEN LINE AND STAFF  EXECUTIVES  COSTLY ORGANIZATION  COMPLICATED IN OPERATION  DISCIPLINE IS AFFECTED
  • 13. Reasons for conflicts between line and staff ARGUMENTS OF LINE EXECUTIVES AGAINST STAFF  DILUTION OF AUTHORITY  LACKS PRACTICAL KNOWLEDGE  LACKS HUMAN SKILLS  DOMINATION OF STAFF MANAGERS  STRESS ON PAPERWORK ARGUMENTS OF STAFF EXECUTIVES AGAINST LINE  RESISTANCE TO NEW PLANS AND IDEAS  INADEQUATE SUPPORT FROM LINE EXECUTIVES  LIMITED COOPOERATION FROM LINE EXECUTIVES  SUPPLY OF INADEQUATE INFORMATION
  • 14. Solutions for resolving the conflicts  RELATIONSHIP SHOULD BE NOTED IN WRITING  CLEAR UNDERSTANDING OF STAFF ROLE  FREQUENT MEETINGS  SELECTION OF COMPETENT STAFF  STAFF SHOULD BE TREATED AS TEAM MEMBERS OF THE GROUP  QUICK SETTLEMENT OF CONFLICTS
  • 15. Project Structure THE TERM PROJECT REFERS TO A UNIQUE AND COMPLEX CLUSTER OF ACTIVITIES TO BE COMPLETED WITHIN FIXED TIME AND COST. THEY ARE DISSOLVED ONCE THE GOAL IS ACHIEVED. EG- THE GOAL MAY BE TO CONSTRUCT A NEW RAILWAY BRIDGE. SPECIALISTS FROM DIFFERENT FUNCTIONAL DEPARTMENTS ARE BROUGHT TOGETHER TO WORK IN HARMONY. THE FUNCTIONAL DEPARTMENT MAY BE PRODUCTION, ENGINEERING, QUALITY CONTROL, PRODUCT ANALYSIS, ETC. WHEN THE PROJECT IS COMPLETED, THESE SPECIALISTS RETURN TO THE RESPECTED DEPARTMENTS
  • 16. Uses a) OBJECTIVES b) TIME-BOUND c) UNRELATED WITH DAILY ADMINISTRATIVE WORK d) IN NEED OF SPECIALISED SKILLS e) ITS TEMPORARY
  • 17. Limitations  CONFLICTS IN APPROACH  LACKS CLARIFY OF ROLES  CONFLICTS BETWEEN DEPARTMENTS  UNCERATIN FUTURE  LACKS CLEARITY OF COMMANDS
  • 18. Functional organizational structure • Employees are grouped together according to their similar tasks, skills or activities. Functional structures are suitable for SMEs with high level of specialization. The decision making is centralized at the top of the organization.
  • 19. Benefits of functional organizational structure • Efficient use of resources; • In-depth skill development; • Clear career paths; • Strategic decisions are made on the top of the organization.
  • 20. Disadvantages of functional design • Slow decision making • Less innovative. • Performance responsibility is unclear; • Limited management training. • Poor coordination across functions.
  • 21. Matrix Organization • Matrix Organization was introduced in USA in the early 1960's. It was used to solve management problems in the Aerospace industry. • 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. Purchase, Production, R & D, etc. Each function has a Functional (Departmental) Manager, e.g. Purchase Manager, Production 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.
  • 22. • The employees has to work, under two authority (bosses). The authority of functional manager flows downwards while the authority of project manager flows across (sideward). So the authority flows downwards and across. Therefore, it is called “MATRIX ORGANISATION”.
  • 23. Matrix design • It implements functional and divisional structures simultaneously in each department. • The worker in each department is being supervised by two bosses at the same time. • It is suitable for the following situations: - Environmental pressure exists for a dual focus; - Large amount of information needs to be processed; - Innovations are performed - Organization is working on several projects together. - Efficiency is needed in the use of resources.
  • 24. Strengths of matrix design • Provides flexibility; • Encourages resource efficiency; • Enhances skill development; • Increase motivation and commitment; • Helps top management in planning process.
  • 25. Weaknesses of matrix design • Creates dual authority confusion; • Is time consuming; • Generates high implementation cost; • Requires interpersonal skill training; • Spawns power struggle.