Organizations and organizational
structures
Prof. Alessandro Sancino
Business Economics
1
Learning outcomes
• Describe the different ways in which
organisations may be structured
• Understand
the
factors
affecting
organizational structures and the concept of
job design
• Appreciate the different types of changes
that may occur within and among
organisations
2
Designing organizational
structures
• Organizational design
– The process by which managers create a specific type of
organizational structure and culture so that a company can
operate in the most efficient and effective way.
• Organizational Structure
– Formal system of roles, tasks and reporting relationships showing
how operations occur in a given organization
• Organizing
– The process by which managers establish working relationships
among employees to achieve goals.
3
Factors affecting organizational
structures
Job design
• Job Design
– The process by which managers decide how to divide
tasks into specific jobs.
– The appropriate division of labor results in an effective
and efficient workforce.
https://www.youtube.com/watch?v=7NbccAJYN_E
Grouping jobs into functions
• Functional Structure
– An organizational structure composed of all the
departments that an organization requires to produce its
goods or services.
Functional Structure
• Advantages
– Encourages learning from others doing similar
jobs.
– Easy for managers to monitor and evaluate
workers.
– Allows managers to create the set of functions
they need in order to scan and monitor the
competitive environment
• Disadvantages
– Difficult for departments to communicate with
others.
– Preoccupation with own department and losing
sight of organizational goals.
Divisional Structures
• Divisional Structure
– Managers create a series of business units to
produce a specific kind of product for a
specific kind of customer
Types of Divisional Structures
• Product Structure
– Managers place each distinct product line or business in its
own self-contained division
– Divisional managers have the responsibility for devising an
appropriate business-level strategy to allow the division to
compete effectively in its industry
• Geographic Structure
– Divisions are broken down by geographic location
– Managers locate different divisions in each of the world
regions where the organization operates.
– Generally, occurs when managers are
pursuing a multi-domestic strategy
Types of Divisional Structures
• Market Structure
– Groups divisions according to the particular kinds
of customers they serve
– Allows managers to be responsive to the needs
of their customers and act flexibly in making
decisions in response to customers’ changing
needs
Product, Geographic, Market
Structures
Matrix Design Structure
• Matrix Structure
– An organizational structure that simultaneously
groups people and resources by function and product.
• Results in a complex network of superiorsubordinate reporting relationships.
• The structure is very flexible and can
respond rapidly to the need for change.
• Each employee has two bosses (functional
manager and product manager) and
possibly cannot satisfy both.
Matrix Structure
Types of Changes in Organization
Restructuring
Reengineering
Mergers &
Acquisition
Strategy
Change
Cultural
Change
Changing
organizationa
l structures
and reporting
lines
Changing
processes,
the way work
is done
Changing the
identities of
organizations
Changing
priorities,
ultimate
direction and
purposes
Changing
values,
attitudes and
behavior
+ =
Selected indicators in HRM
HR Marketing & Recruiting
Training & Development

Employer ranking

Days of training/employee

Number of applications

High-Potential rate

Cost per hire


Time to fill
Average time on current
level (HiPos)

Early turnover (during
probation period)

Internal placement rate

Trainee rate
Workforce/Organization
Compensation & Benefits
Retention

Turnover rate
(general, differentiated)

Tenure

Employee commitment

Reasons for leaving
Performance & Productivity

Average age

Labor costs/total costs

Revenue/employee

Female/male ratio

Labor costs/employee

Human Capital ROI

Women in leadership
positions (%)

Tariff employees (%)

Sick leaves/employee

Compensation structure

Accidents/1000 employees

Span of control

Temporary contracts (%)
References, acknowledgement and/or sources
•
Prof. Armin Trost http://www.armintrost.de/
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