Organizational Theory And Design:

TOPIC:
“MINTZBERG’S ORGANIZATIONAL
TYPES”

PRESENTED BY:

MBA (HRM) - VI
What Is Organizational
Structure:
 Introduction:

 An organization's structure can make a real difference to the way it performs. The

implementation of a business strategy intrinsically demands cooperation with the
human workforce.

 Successful organizations are those that have figured out the best way to integrate
and coordinate key internal and external elements.

 They also reviewing and redesigning their structures on an ongoing basis.They also
 Mintzberg's Organizational
Types
 The main five successful organizational structures that he identifies are as
follows:

1) The Entrepreneurial Organization.

2) The Machine Organization (bureaucracy).
3) The Professional Organization.
4) The Divisional (diversified) Organization.
5) The Innovative Organization (adhocracy).
 Entrepreneurial Organization:

 Entrepreneurial company has informal, non-standardized structure and

rules
 Direct supervision
 Key part of organization is Strategic Apex
 Type of organization has a simple and flat structure
→ Example: start-up companies, one-person company, family companies
 Missionary Organization
(bureaucracy):
 Achieve control through standardization of norms
 Work is very clear, focused, inspiring and distinctive
 Small tasks and units are clear through the clarity of the
mission
 Centralization through leaders who want to achieve the goal
of the clear mission (decentralization)
 Key part of organization is Ideology
→ Example: Fairphone
Professional Organization:
 Is complex, lots of rules and procedures
 Difference is that prof. org. rely on highly trained professionals who
demand
 Control of their own work
 Allows different professionals to work within a social structure while
maintaining their own work a key principle of professional organizations
is the autonomy
 Structure is typical for org. who has a large number of knowledge workers
 Disadvantage: lack of control that senior executives can exercise, because
authority and power are spread downthrough the hierarchy
 → Example: Universities
 Divisional (Diversified)
Organization:
 Has many different product lines and business units
 Central headquarter supports number of autonomous divisions that make own
decisions and have own unique structure
 Iarge and mature organizations, that have a variety of brands,
 Produce a wide range of products or operate in different geographical regions
 Allows managers to maintain more control and accountability (other than in
machine structure)
 Day-to-day decision making → central team can focus on main strategic plans
 Key part of organization is Middle line
→ Example: Apple
 Innovative Organization
(Adhocracy)
 Best suited to traditional organization
 Highly flexible → pool of talents → workers move from team to team
 Relatively low standardization and formality with little hierarchy,
 Its form is often driven by the need for speed
 Operation is based on trust in others to be able to do their jobs well
 → Example: Google
 Practical Study Of
organization:
With Respect To My Topic Is:
 Pratical Study Of Organization:
NIKE

 Nike,  is an American multinational corporation that is engaged in the

design, development, manufacturing, and worldwide marketing and sales
of footwear, apparel, equipment, accessories, and services.

 The company is headquartered near Beaverton, Oregon, in the Portland

metropolitan area.
 The company was founded on January 25, 1964,as Blue Ribbon Sports,
by Bill Bowerman and Phil Knight, and officially became Nike, Inc. on
May 30, 1971.

 It is the world's largest supplier of athletic shoes and apparel and a major

manufacturer of sports equipment, with revenue in excess of
 US$24.1 billion in its fiscal year 2012 , it employed more than 44,000
people worldwide.
 In 2014 the brand alone was valued at $19 billion,
 And of 2017, the Nike brand is valued at $29.6 billion.
Nike and Mintzberg's
Organizational Parts:
1. Ideology :halo of beliefs and traditions; norms values and culture
2. Strategic Apex: top management → role is to interpret/define mission of
organization and to ensure its objectives are consistens with mission
3. Operating Core operations,: operational processes → people who perform
basic work of producing the products
4. Middle Line: middle management → Form a chain joining the
strategic apex to the operating core by the use of delegated formal authority
5. Technostructure: analysts that design systems, processes, etc
6. Support Staff: support outside of operating workflow
 Review of theoretical and
practical situations:
 Organizations exist to achieve goals. These goals are broken down into tasks
as the basis for jobs.
Henry Mintzberg’s (1992, 2009) suggests that organizations can be differentiated
along three basic dimensions:
(1) The key part of the organization, that is, the part of the organization that
plays the major role in determining its success or failure
(2) The prime coordinating mechanism, that is, the major method the
organization uses to coordinate its activities
(3) The type of decentralization used, that is, the extent to which
the organization involves subordinates in the decision-making process.
 SWOT Analysis:

Strengths:
 Nike is a very competitive organization.
 Phil Knight (Founder and CEO) is often quoted as saying that ‘Business is
war without bullets.’
 Nike has a healthy dislike of is competitors. At the Atlanta Olympics,
Reebok went to the expense of sponsoring the games. Nike did not.
 Nike sponsored the top athletes and gained valuable coverage.
 Weakness:

 The organization does have a diversified range of sports products.

 The income of the business is still heavily dependent upon its share of the
footwear market. This may leave it vulnerable if for any reason its market
share erodes.
 The retail sector is very price sensitive.
 Nike does have its own retailer in Nike Town. However, most of its income
is derived from selling into retailers.
 Opportunities:

 Product development offers Nike many opportunities. The brand is fiercely

defended by its owners whom truly believe that Nike is not a fashion brand.
 However, like it or not, consumers that wear Nike product do not always buy it
to participate in sport.
 Some would argue that in youth culture especially, Nike is a fashion brand. This
creates its own opportunities, since product could become unfashionable before
it wears out i.e. consumers need to replace shoes.
 The business could also be developed internationally, building upon its strong
global brand recognition.
 There are also global marketing events that can be utilised to support the brand
such as the World Cup (soccer) and The Olympics.
 Threats:
 Nike is exposed to the international nature of trade. It buys and sells in
different currencies and so costs and margins are not stable over long periods
of time.
 Nike is strong at research and development, as is evidenced by its evolving
and innovative product range.. If prices rise, and products can be made more
cheaply elsewhere (to the same or better specification), Nike will move
production
 Nike is a global brand. It is the number one sports brand in the World. Its
famous ‘Swoosh’ is instantly recognizable, and Phil Knight even has it
tattooed on his ankle.
 Conclusion:
 Nike is the clear cut leader in the sporting goods and apparel industry.
 They have created a stronghold on the market that no one can seem to take
from them.
 Nike has no factories. It does not tie up cash in buildings product through
endorsement deals.
 Nike continuously attracts and signs the top athletes in each professional sport
to lucrative deals to endorse their products.
 Sponsoring world sporting events like the Olympics and the World Cup has
also propelled Nike to the top of their industry
 Recommendations:
 Nike would be for them to remain aware of small upstart companies who
enter the market and rocket to near the top of the market quickly.
 Armour became a serious competitor to Nike by perfecting the technology
that they introduced to the market.
 Nike should remain cognizant of competitions willingness to risk everything
to take a piece of their market share.
 Nike should also monitor the personal conduct and lives of the athletes the
tenders their product. With Tiger Woods scandal Nike chose money over
morality and ethics
The End……………