Organisational Structure and Leadership Styles

Organizational Structures
1. The Simple structure has authority centralized in a single

person, a flat hierarchy, few rules, and low work
specialization and is often used in the very early stages of a
firm
Example for Simple Structure
M. S. Ramaiah School of Advanced Studies 1

2. In a Functional structure, common in both profit and non-

profit organizations, people with similar occupational
specialties are put together in formal groups.
President
Vice-
Vice- Vice- Vice-
President,
President, President, President,
Human
Production Marketing Finance
Resources
Functional Structure: An Example

3. When people with diverse occupational specialties are put

together in formal groups, a Divisional structure is in place
•Product divisions group activities around similar products or
services
•Customer divisions group activities around common
customers or clients
•Geographic divisions group activities around regional
locations

Conglomerate Structure
4. The Conglomerate structure groups divisions or business
units around similar businesses or industries
President
Engineered
Fire & Plastics &
Electronics Healthcare Products
Security Adhesives
& Services
Conglomerate Structure: Typical example of the structure of

Tyco International

Hybrid Structure
5. A Hybrid structure uses functional and divisional structures in
different parts of the same organization
Product President
Divisional
Structure
President President President President
Cadillac Buick Pontiac Chevrolet
Vice-
Vice- Vice- Vice- Functional
President,
President, President, President, divisional
Human
Production Marketing Finance structure
Resources
Manager Manager Manager Manager Geographical

Region I Region II Region III Region IV divisional structure
Hybrid Structure: An Ex. of Org St of General Motors

6. When an organization combines functional and divisional

chains of command in a grid so that there a two command
structures, vertical and horizontal, a Matrix structure is used
President Functional
Structure
Project
Vice Vice Vice Vice
structure
President, President, President, President.
Project Engineering Finance Production Marketing
Manager,
Taurus
Subordinate
Project reports to
Manager,
Mustang Vice
President of
Project marketing
Manager, &
Explorer
Project Project
Manager, Manager for
Expedition Mustang

7. In a Team-based structure, teams, both temporary and

permanent, are used to improve horizontal relations and solve
problems throughout the organization
Functional President
Structure
V President V President V President V President

R&D Design Engineering Marketing
Project Teams
Product Team Product Team Product Team

Mfg Light Truck Mfg Sedans Mfg Sports Cars
Project Team
members

8. The Network structure or Virtual organization has a central

core that is linked to outside independent firms by computer
connections which are used to operate as if all were a single
organization
Design Components
Studio Assembly
Core Company Mexico, Asia
Sweden
USA
Engineering Distribution
Company
Company Canada
Accounting
Japan & Finance
USA

Leadership Styles
Leadership is the art of motivating a group of people to act towards

achieving a common goal
Managers do the things right, Leaders do the right things

Leadership Styles
 Leadership style is the manner and approach of providing

direction, implementing plans, and motivating people
 Different leadership style will result in different impact to
organization
 The leader has to choose the most effective approach of
leadership style depending on situation (because leadership
style is crucial for a team success)

Leadership Styles
Types of Leadership Styles:

 Authoritarian or Autocratic
Leadership
 Democratic or Participative
Leadership
 Delegative or Laissez-faire
Leadership

Leadership Styles
Autocratic or Authoritarian Leadership Style:
 Manager retains as much power and decision
making authority as possible
 Does not consult staff, nor allowed to give any
input
 Staff expected to obey orders without
receiving any explanations
 Greatly criticized during the past 30 years
 Rely on threats and punishment to influence
staff
Leadership Styles
The Most Effective Style to use, When:

 New, untrained staff do not know which tasks to
perform or which procedures to follow
 Effective supervision provided only through detailed orders
and instructions
 Staff do not respond to any other leadership style
 Limited time in which to make a decision
 A manager’s power challenged by staff
 Work needs to be coordinated with another department or
organization
Leadership Styles
Ineffective, When :
 Staff become tense, fearful, or resentful
 Staff expect their opinions heard
 Staff depend on their manager to make all their decisions
 Low staff morale, high turnover and absenteeism and work
stoppage

Leadership Styles
Democratic or Participative Leadership Style:
 Encourages staff to be a part of the
decision making
 Keeps staff informed about everything that affects their work and
shares decision making and problem solving responsibilities
 Group members feel engaged in the process and are more

motivated and creative
 Participative leaders encourage group members to participate, but

retain the final say over the decision-making process

Leadership Styles
Effective ,When :
 Wants staff to share in decision-making and
problem-solving duties.
 Wants to provide opportunities for staff to develop a high
sense of personal growth and job satisfaction.
 A large or complex problem that requires lots of input and
feedbacks to solve
 Want to encourage team building and participation

Leadership Styles
Ineffective , When:
 Not enough time to get everyone’s input
 Easier and more cost-effective for the manager to make the
decision
 Can’t afford mistakes
 Manager feels threatened by this type of leadership
 Staff safety is a critical concern

Leadership Styles
Delegative or Laissez-faire Leadership

This Leadership style is a ‘hands off’ approach in
which a leader transfers decision making power to one or
more employees, but remains responsible for their decisions.

Leadership Styles
Effective , When:
 Staff highly skilled, experienced, and educated
 Staff have pride in their work and the drive to do it
successfully on their own
 Outside experts, such as staff specialists or consultants used
 Staff trustworthy and experienced

Leadership Styles
Ineffective , When:
Staff feel insecure at the unavailability of a manager
The manager cannot provide regular feedback to staff on how
well they are doing
Managers unable to thank staff for their good work
The manager doesn’t understand his or her responsibilities and
hoping the staff cover for him or her

References.
[1] Prof V.G.S. Mani, Manufacturing Strategy, Module notes, M S Ramaiah
school of advanced studies, Bangalore , January 2010.
[2] John Miltenburg, Manufacturing Strategy: How to formulate and implement

a winning plan, 2nd Edition, Productivity Press, New York, 2005
[3] unknown, ACE designers logo, httpwww.leanmachinetool.comIndustry.aspx,

retrieved on 5th december 2010.
http://www.nwlink.com/~donclark/leader/leadstl.html
http://www.fao.org/docrep/w7503e/w7503e04.htm#type of organizational structu
re
http://gametlibrary.worldbank.org/FILES/864_Types%20of%20Organograms.pdf
[4] unknown, Maruti logo, httpwww.topnews.incompaniesmaruti, retrieved on
5th december 2010.


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Organizational Structures

1. The Simple structure has authority centralized in a single

Example for Simple Structure

M. S. Ramaiah School of Advanced Studies 1

2. In a Functional structure, common in both profit and non-

Functional Structure: An Example

M. S. Ramaiah School of Advanced Studies 2

3. When people with diverse occupational specialties are put

M. S. Ramaiah School of Advanced Studies 3

Conglomerate Structure: Typical example of the structure of

M. S. Ramaiah School of Advanced Studies 5

Manager Manager Manager Manager Geographical

Hybrid Structure: An Ex. of Org St of General Motors

6. When an organization combines functional and divisional

M. S. Ramaiah School of Advanced Studies 7

7. In a Team-based structure, teams, both temporary and

V President V President V President V President

Product Team Product Team Product Team

M. S. Ramaiah School of Advanced Studies 8

8. The Network structure or Virtual organization has a central

M. S. Ramaiah School of Advanced Studies 9

Leadership is the art of motivating a group of people to act towards

Managers do the things right, Leaders do the right things

 Leadership style is the manner and approach of providing

M. S. Ramaiah School of Advanced Studies 11

Types of Leadership Styles:

M. S. Ramaiah School of Advanced Studies 12

The Most Effective Style to use, When:

M. S. Ramaiah School of Advanced Studies 15

 Group members feel engaged in the process and are more

 Participative leaders encourage group members to participate, but

M. S. Ramaiah School of Advanced Studies 16

M. S. Ramaiah School of Advanced Studies 17

M. S. Ramaiah School of Advanced Studies 18

Delegative or Laissez-faire Leadership

M. S. Ramaiah School of Advanced Studies 19

M. S. Ramaiah School of Advanced Studies 20

M. S. Ramaiah School of Advanced Studies 21

[2] John Miltenburg, Manufacturing Strategy: How to formulate and implement

[3] unknown, ACE designers logo, httpwww.leanmachinetool.comIndustry.aspx,

M. S. Ramaiah School of Advanced Studies 22

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