BUSINESS ARCHITECTURE (BA)
Organization Structure
The organization chart
Organization manual
BP and organization structure
Exercises
Review questions
Organization Structure
• A BP may cross multiple organizations, and, in turn, an
organization may be involved in multiple BPs.
• Organization may be described from a static or dynamic
perspective
• Organizational dynamics describes the behavior of
organizations under certain conditions, as change; this field is
typical of social sciences
• Organization structure describes the static aspect. This field is
typical of business sciences and management culture.
• A structure description is Organization Chart.
• Organization Chart is integrated by Organization Manual that
describes details
Organization Chart: first level (example)
President & Chief
Executive Officer
(CEO)
Vice President
Research &
Development
Vice President
Production
External Relations
Legal & Security
Internal Audit
Human Resources
Vice President Sales
(US)
Vice President
International
Operations
Vice President Finance
Vice President
Marketing
Organization Chart: organization levels
(example)
Regional
Accounting
Branch (6-10 in
a Region)
Sales Support
New
Installations
Sales
VP Sales
Region
(8 regions in US)
Service
Installations
Regional
Operations
Repair
Maintenance
Level 1 (VP)
Level 2 (Director)
Level 3 (Manager)
Level 4 Supervisor /
Employee
Level 5 Foreman/
Employee
Organization Chart: comments
•
President & Chief
Executive Officer
(CEO)
Vice President
Research &
Development
Vice President
Production
External Relations
Legal & Security
Internal Audit
Human Resources
Vice President Sales
(US)
Vice President
International
Operations
The chart defines the responsibility of each
organization unit.
–
–
Vice President
Finance
Vice President
Marketing
–
–
Regional
Accounting
Branch (6-10 in a
Region)
Sales Support
–
New Installations
Sales
VP Sales
Region
(8 regions in US)
Service
Installations
Regional
Operations
–
Repair
President has the authority to decide the objectives
of all Vice Presidents (VP).
At a lower level, each VP plans and controls the
objectives of organizational units that report to him
or her. E.g. The VP of Sales plans and controls
operations of the Regions that report to him, and
each Region in turn plans and controls the actions
of the operations and branches that report to the
Region.
Each first tier unit is further divided in smaller
units, and the breakdown may include up to 5
levels, depending on the size and complexity of the
units.
Sales division is broken down in Regions, each in
charge of an area (e.g. New York City, East Coast,
etc.).
Each Region includes staff (Regional Accounting,
Sales Support), technicians and engineers in charge
of installing, maintaining and repairing elevators,
and local branches, with a small team of salesmen,
in charge, respectively, of selling installations or
service to installed elevators.
Assuming that each region has an 8 branches,
branches would be around 50.
Maintenance
5
Organization Manual
•
Organization charts are often integrated
by text comments, that state objectives,
tasks, responsibility, authority of each
organizational unit.
– Objectives define what the organizational
unit (and its manager) should obtain.
– Tasks are the activities the unit should
perform and ideally coincide with the
activities of the business processes the
unit is involved in.
– Responsibility is given by the results the
unit is accountable for; e.g. a factory is
responsible for the quality of products.
– Authority are the areas where the unit can
decide. E.g. a factory manager is
responsible for the quality but has no
authority to decide on quality standards.
•
The set of these descriptions make an
“organizational manual”, that are also
partially incorporated in ISO 9000
quality requirements.
Organization
Manual
Organization
Chart
Description of
each organization
unit / position
Objectives
Responsibility
Authority
Tasks
6
Forms of Organization Structure
• The structure of any large organization has to deal with diverse
coordination dimensions:
– Geography, where departments are grouped by region, typical of banks,
railways, post office etc.
– Function, where departments are grouped by competence, that are typical of
small companies
– Product or Customer, where departments are grouped by the customers they
serve or the product they deliver
– Program or Projects, where departments are grouped by projects they are
working on
• Traditionally structures are classified in three main categories
– Step 1 Functional
– Step 2 Divisional
– Step 3 Matrix
7
Functional structure:
Railways (early times)
CEO
Regional
Operations
Staff
Personnel
•
•
•
Accounting
Traffic
Equipment
Transport
Functional structures have been
historically the earliest organization form
Railways in late Eighteen Hundred
engineered a functional structure with
central departments and a series of
identical geographic structures
The pure functional structure is rather
rigid and hardly supports cross
organizational BPs
Region 1
Region …
Region n
Personnel
Personnel
Personnel
Accounting
Accounting
Accounting
Traffic
Traffic
Traffic
Equipment
Equipment
Equipment
Transport
Transport
Transport
8
Divisional structure:
Automotive Enterprise
• Divisional structures
were born with large
manufacturers
• In the example Divisions
reflect the product life
cycle from the design
down to the service; each
Division cover a phase of
product life cycle
• The divisional structure is
rather resilient structure
and supports cross
functional BPs
CEO
R&D
Division
Personnel
Finance
Legal, Audit
etc.
IT
Product
Division A
Product
Division B
Production
Division
Sales &
Service Div.
Design
Marketing
Marketing
Production
Staff
USA &
Canada
Test Lab
Product dev
Product dev
Plant A
EU
Plant B
FE (PRC,
Japan etc.)
Plant C
Other
Countries
9
Complex Structures: Aerospace
CEO
•
•
•
•
Complex structures were born
with high technology programs
Typically the vendor is a systems
integrator that assembles
subsystems made by a variety of
suppliers
In the example Divisions reflect
the breakdown of the program in
work packages
The program structure is resilient
and supports cross enterprise
BPs
R&D
Division
Program
XXX
Personnel
Finance
Legal, Audit
etc.
IT
Program
YYY
Production
Division
Sales
Service
Design
QA
QA
Production
Staff
Air Carriers
Spare part
Test Lab
Wings
Wings
Plant A
Government
and Military
Central
serviice
Fuselage
Fuselage
Plant B
Systems
Systems
Plant C
Cockpit
Cockpit
Engine
Engine
Assembly &
Test
Assembly &
Test
10
Milan Municipality
(2007)
11
The assembly line of Boeing 787
Source: The Boeing company: The Mooshine Shop , HBS, 9-607-130
12
Work packages in 787 programs
Source: Boeing 787: The Dreamliner (B)
13
Organization Structure versus Business
Processes
• A many-to-many relation occurs between BP and
Organization Structure.
• Accordingly a BP may be
– Functional: segregated within the boundaries of an individual
organization unit (it seldom happens)
– Cross-functional: across multiple units of the same
organization
– Cross-organizational: across multiple organizations
14
Functional BP: example
Corporate Dpts
Finance Dpt
Info
request
Gather data
Publish
report
Report
Analyze data
15
Cross-functional BP : example
Corporate Dpts
Production
Planning
Production
request
Gather
data
Materials
Mngt
Plant
Production
deliver
y
Expedite
Execute
16
Cross-organizational BP: example
Information
Deliver
Books
Track
Order
Book
request
Order
Books
Front-end
Control
Credit
Credit
Organization
Book
delivery
Pick
Books
Bookshop
Courier
17
Review questions
•
•
•
•
What is an organization structure?
What is an organization chart?
What is the content of an organization manual?
What is the relation between organization structure and business
processes?
• Describe:
– A functional BP
– A cross functional BP
– A cross organizations BP
Exercises
Sketch and comment organization charts
Exercise 1: organization structure of UNIPV
20
Exercise 2: organization structure of MIT
21
Exercise 3: organization structure of IBM
22