Human Resource Management

Lecture 2

Topic:-
“ Organizational Structure”
Definition of Organization:-
Organization refers to a collection of people, who are involved in
pursuing defined objectives. It can be understood as a social system which
comprises all formal human relationships. The organization encompasses
division of work among employees and alignment of tasks towards the
ultimate goal of the company.For example;Government,political
organizations,charity organizations,armed forces,educational institutions
etc.

Types of organizations:-
There are 5 types of organizations which are mentioned
below:
1. Matrix Organization
2. Partnership
3. Corporation
4. Functional
5. Cooperative

1.Matrix Organization:-
A matrix organizational structure is a structure of organization in
which some individuals report to more than one supervisor or leader, which is
described as solid line or dotted line reporting. More broadly, it can also describe the
management of cross-functional, cross-business groups and other work models that do
not maintain rigid business units or silos grouped by function and geography. For
example, an employee may have a primary manager they report to as well as one or
more project managers they work under.
2.Partnership:-
A partnership business, by definition, consists of two
or more people who combine their resources to form a
business and agree to share risks, profits and losses.
Common partnership business examples include law firms,
physician groups, real estate investment firms and
accounting groups.

3.Corporation:-
A corporation is an organization usually a group of
people or a company authorized by the state to act as a
single entity (a legal entity recognized by private and public
law. Almost all large businesses are corporations, including
Microsoft Corp., the Coca-Cola Co., and Toyota Motor
Corp. Some corporations do business under their names
and also under separate business names, such as Alphabet
Inc., which famously does business as Google.

4.Functional:-
Under this structure, the employees are divided into groups
by the organization according to a particular or group of tasks.
This organization is divided into smaller groups based on
specialized functional areas e.g:IT,Finance,Marketing etc.

5.Cooperative:-
This type of orgainzation is operated solely for the
benefit of those who own it and use its services.

•Sectors in which organizations operate:-

There are three basic sectors in which all organizations
operate that are as follows:
 Primary Sector: This sector deals with the extraction and harvesting
of natural resources such as agriculture and mining.
  Secondary Sector: This sector comprises construction,
manufacturing, and processing. Basically, this sector comprises
industries that relate to the production of finished goods from raw
materials.
 Tertiary Sector: Retailers, entertainment, and financial companies
make up this sector. These companies provide services to
consumers.

 Structure of organization:-
Here are 7 types of organizational structures commonly used
by businesses:

 Hierarchical: employees are grouped and assigned a

supervisor. It is the most common type of organizational
structure. Employees may be grouped by their role or
function, geography or type of products or services they
provide
 Functional: the organization is divided into groups by
roles, responsibilities or specialties. For example, an
organization may have marketing, finance and sales
departments that are each overseen by a manager who
also has a supervisor that oversees multiple departments.
 Horizontal:
 Divisional: organizations are split into divisions based on
specific products, services or geographies. For this
reason, this structure is typically used by large companies
that operate in broad geographic areas or own separate,
smaller companies
 Matrix: resembles a grid in which employees with similar
skills are grouped and report to more than one manager.
This often includes a functional manager who oversees
projects and their progress and a product manager who is
responsible for the company's strategy
 Team based: employees are grouped into skills-based
teams to work on specific tasks while working toward a
 common goal. Often, this is a flexible structure that allows
employees to move from team to team as they complete
projects
 Network based: In a network structure, managers at an
organization will coordinate relationships with internal and
external entities to deliver their products or services

 Stakeholders of organizations:
What are stakeholders?
A stakeholder is a party that has an interest in a company and can
either affect or be affected by the business.Some of the stakeholders of
an organization are mentioned below:

 Customers: one that purchases a commodity or service

 Competitors:organizations that have the same goals as yours.
 Employees:people who work for an organization.
 Shareholders:people or companies holding shares in your
organizations
 Investors:persons or companies who invested capital in your
organization
 Suppliers:One from whom you buy all the products or raw
materials
 Distributors: A distributor is an entity that buys noncompeting
products or product lines and sells them direct to end users or
customers.
 Government: the group of people with the authority to govern a
country or state; a particular ministry in office.
 New rivals:Fresh or new organizations rising in industry giving
same products as yours.