Organizational Structure ORGANIZATIONAL STRUCTURE Chapter 12 Lecture 1 Every by pub14358

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									ORGANIZATIONAL STRUCTURE


     Chapter 12 Lecture 1
Every Organization has a
       Structure
But   structures can differ
    Due to choice

    Due to national laws

The words used to describe them also can
differ
    Organization chart, design, structure

The way they are drawn can differ
     pyramid, sideways pyramid, circle
 The Structural Configuration
 is the skeleton of the organization
 reflects corporate governance
 is intended to meet organizational
  objectives
 arises out of strategic directions
 and causes managers to ask:
    what structure will best aid us in meeting
     our strategy and objectives?
 Restructuring Occurs for Many
 Reasons

 Turnover in top management
 Competitive positioning
 Mergers and/or acquisitions
 Cost-savings
 Even the illusion of managerial control
 The Illusion of Managerial
 Control
―We trained hard—but it seemed that every time we
  were beginning to form up into teams, we would
  be reorganized. I was to learn later in life that we
  tend to meet any new situation by reorganizing;
  and a wonderful method it can be for creating the
  illusion of progress while producing confusion,
  inefficiency, and demoralization.‖
                    –Petronius Arbiter, 210 B.C.
 Structural Choice is Important
 Because
 it focuses attention on particular areas
 shapes how resources will be used
 directs communication flows
 defines control and other processes
 illustrates people’s roles relative to others’
  roles
 Your Job

 Understand   organizational objectives
  (articulated in the varied levels of
  strategy)
 Analyze the structure
 Assess the match between
  organizational strategies and structures
Top Managers Answer to a
Power Greater than Themselves
   God or conscience in a wholly owned private firm
   The family in a family owned firm
   The Board in a publicly owned firm:
      U.S. boards often are chaired by the CEO

      Boards in U.K. usually are chaired by a non
       executive
      European companies often have a two-tier
       board
         In Germany, duties are split between
          supervisory and management boards
         Spain and France often use an executive
          committee
 Beneath the Board are Several
 Structural Types
 Intra and interorganizational networks
 Special cases
 Functional, divisional, hybrids
 Networks
Intraorganizational networks
   internal networks
   shamrock
   spiderwebs
Interorganizational networks
     strategic alliances

     joint ventures

     partial acquisitions/mergers

     cross-sector partnerships
 Special Cases
 Family structure
 Holding companies
 Virtual structure
Except for “born globals,” Most
Companies Grow into
Expansion
Most Common Structural Types
Among Global Firms are:
 Functional structure
 Divisional structure
 Hybrid structures
    Combined functional/divisional structure

    Matrix structure
    Global Functional Structure


                                     CEO


VP Marketing   VP Finance        VP Operations         VP R&D   VP Legal issues


                     Product 1     Product 2     Product 3


               Country A    Country B
 Divisional Structure Can Take
 Different Forms
 Product
 Geographic
 Customer group served
  Global Geographic Division
  Structure

                                        CEO

                        Admin/Finance


VP for the Americas   VP Europe          VP E. Asia           VP Australasia


                                               Australia/NZ     Indonesia      Islands


                                          Marketing   Operations
Global Product Structure


              DIVISIONAL STRUCTURE (BY PRODUCT LINES)


                     COSMETICS CORPORATION


FRAGRANCES   SKIN CARE PRODUCTS   HAIR CARE PRODUCTS    OTHER PRODUCTS
Hybrids Often Emerge to Deal with
Problems of Functional and
Divisional Forms

 Matrix forms are hybrids
 Some hybrids combine a mostly functional
  structure with one or more important
  products or markets, e.g., North America
 Some hybrids combine a mostly divisional
  structure with one or more important
  functions, e.g., marketing
We Use a Matrix to Organize
Roles and Relationships in
Business Education
Global Matrix Structure

                                               Chairman of the Board


                                                Executive Committee

                                        Management


Strategic Business units   N. America                Latin America     Europe   Asia


         autos


      light trucks


     sports utilities


          parts


       financing
     Combined Functional and
     Divisional Structure
            Danone Group, 2003
     Chair and CEO            Vice Chair and COO



General                              Exec VP,         Exec VP,
                   Exec VP,         Fresh Dairy        Water
Secretary
                    Finance

     Exec VP,              Exec VP,            Exec VP,
   Biscuits and           Asia-Pacific        Intl Strategy
   Cereal Snacks
    Intraorganizational Structures

   spiderwebs
   internal
   networks
   shamrocks
   horizontal
   keiretsu
   chaebol
Mitsubishi Group Network
Mitsubishi Village
 Interorganizational Structures
 Strategic alliances
 Joint ventures
 Partial acquisitions
    Special Cases
   Family structures—usually hierarchical with a
    patriarch/matriarch or a set of family members
    who divide tasks according to skill or obligation
   Structures that arise out of national tradition—
    German firms always have union representation
    and two levels of boards
   Holding companies
   Virtual organizations

								
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