Professional Documents
Culture Documents
Chapter No 4
Organization Structure
Departmentation by Product
Grouping of activities according to products or product lines
especially in multi-line or large enterprises
Departmentation by Product
Growth of firms
Growth of management functions
Growth of problems
Complexity of managerial function
Distribution / delegation of responsibility
Practice is growing in importance in multi-line large scale enterprises
Advantages
Places attention and effort on product line
Facilitates use of specialized capital facilities, skills &
knowledge
Permits growth and diversity of products and services
Improves coordination of functional activities
Places responsibility for profits at the division level
Furnishes measurable training ground for general managers
Disadvantages
• Requires more personnel with general managers’ abilities
• Tend to make maintenance of economic central services
difficult
• Presents increased problems for top management control
Department by Simple Number
• Grouping people into different sections for admin purpose
• People perform some duties
• This type of departmentation is at the lowest level of
organization
Departmentation by Time
• Grouping of activities on the basis of time
• Shift duties is a common practice in many organizations
• Advantages
• Service can be provided round the clock
• Process can used uninterrupted
• Expensive machines and building can be used for longer
durations
• Disadvantages
• Lack of effective supervision at night
• Problem of coordination and control
4
• payment of overtime
Departmentation by Equipment
Grouping of activities around a process ,type of machine, equipment
Advantages Achievement of economics advantage, Use of
specialized technology, Simplifies training
Disadvantages Coordination of department is difficult , Lack of
development for general managers
Matrix Organizations
Combining of functional & project or product patterns of
departmentation in the same organization
Such organization occurs in :
• Construction … Building a bridge
• Aerospace … designing / launching a satellite
• Marketing … Advertising campaign
• Management Consulting Firms
Effective Matrix Management Guidelines
Define objective of project or task
Clarify roles, authority, responsibility to members
Ensure … influence is based on knowledge / information, rather
than on rank
Balance the power of functional & project managers
Select experienced manager to provide leadership for project
Undertake organizational & team development
Install appropriate cost, time & QC that report deviations from
standards in a timely manner
Reward project managers & team members fairly