What is Decentralization: Advantages & Disadvantages of Decentralisation. A team-based organization is considered to be better than group-based organization as the former leads to enhanced performance, reduced costs, organizational enhancement, and better employee satisfaction. iii. The simple structure becomes inadequate as the business grows. It places responsibility for profits at the divisional level. Specialists get higher satisfaction while working on complex projects. Cost and profit responsibilities may not be very clear in the matrix organisation. ii. Organization structure is the pattern in which various organizational activities are divided and assigned among positions, groups, departments, and divisions and the coordinating mechanism among these activities to achieve organizational objectives. The structure and behavior of an organization can change and evolve, as functions and roles change and evolve (Sandhu & Introduction The organizational structure is concerned with the mapping of the various organizational departments as well as teams, the hierarchical organization, the goals and objectives in each department. In this system, an individuals performance is appraised by his superior, peers, subordinates, and outsiders interacting with him. Away from of control, obligation relationship workplaces way better comprehension of the targets and the procedures of the undertaking. The organisational structure of an enterprise may undergo changes when there are changes in such factors as the size of the enterprise, nature of business, marketing characteristics, etc. iii. Number of employees in such organizations tends to be quite low. (ii) Project organisation provides greater flexibility in organisation; greater check over the project work, provision of determining exact responsibility and better co-ordination of organisational resources. Through these networks, people of boundary less organizations communicate across intra-organizational and extra-organizational boundaries. Many of these problems can be overcome through sharp focus on tasks and responsibilities of corporate and divisional management, measurement of performance of divisions, long-term policy for performance and incentives, creating more autonomy and decentralisation of authority, and finally the explicit strategies for both the firm as a whole and its various divisions. If people are not sure whom they report to, they may discover they are given conflicting assignments by two or more supervisors above them. Organizational Structure. Retrieved from Chron: https://smallbusiness.chron.com/importance-good-organizational-structure-3792.html, Ingram, D. (2019, March 12). Various O/S are accessible in open source, for example, Unix/Linux. The major advantages of departmentation by territory are the following: i. A structure depends upon the associations objectives and strategy. Market-oriented long-range growth-oriented strategies can be planned and implemented. Divisional Structure 4. Thus, a subordinate in matrix structure may receive instructions from two bosses. When making beyond any doubt your organization is well organized, a couple of steps must be taken after: When it comes to advancing the structure of a company it is basic to communicate the proper stream of information to everyone inside the organization. 6. It is appropriate when each product is relatively complex and a great deal of capital is required for each product. ii. Thus, one can see marketing, materials management, production, finance and accounting, personnel and maintenance departments in the functional design of a company engaged in manufacturing. 7. Businesses require structure to develop and be productive, otherwise youd have individuals pulling in all sorts of different directions. WebDivisional structure has some advantages: i. Data were gathered through grammaticality judgment and translation tasks. (v) Attempts to enforce uniform marketing and personnel policies in all the regional units may be contrary to the local needs of some units. It also highlights the various roles and responsibilities. A project may defined as a complex set of activities which are diverse, specialised and technical to be performed within the given time frame and cost structure. Special knowledge and experience contribute to the common goals of the concern. iv. Its applied in GE (General Electric Company) that contains aviation, transportation, currents digital and renewable energy departments. Allows new business and new products to be added easily. 7. Account Disable 12. Such an organizational structure is This is common with multi- product companies with diverse business lines. The core of the network structure is the central organisation which coordinates relationships and activities with the other organisations in the network. In India, many companies have diversified into unrelated businesses and have found functional structure quite unsuitable for them. Divisional managers can concentrate on responsible area and can improve performance. iii. 5. Chance of differences in image and quality may occur across divisions. The benefits of structure based on customers are as follows: (i) Customer departmentation can focus on the special needs of different kinds of customers. Each division regulates the LIC branches in its territory and each branch has separate departments for operations such as new policies, collection of premium, adjustment of claims and administration. While growth through expansion of same line of business forces an organization to organize on functional basis, growth through geographic and product diversification necessitates the adoption of divisional structure. vi. It is not suitable for enterprises with very diverse lines of businesses. Under this structure, there could be confusion regarding job and task responsibilities. The activities of the individuals and the groups will become more rational, stable and predictable. It may give rise to conflicts between divisions. The products are often unrelated and require different emphasis on different functions. Thus, each functional staff has two bosseshis administrative head and his project manager. iv. An Organization structure helps in: Ineffectively structured organizations discover that critical deadlines are not met since there were not adequate human resources in each department to achieve all parts of a given assignment, or because it was not clear whose obligation the project was. As said above, product based structure is suitable only for fairly large organisations having multi-product lines and which can appoint top managerial personnel to handle semi-autonomous product divisions. Even the earliest adopter of this concept, GE, has not yet achieved this boundary less status. ii. However, advantages of divisional structure score over its disadvantages. iii. Boundary Less Organisation 9. 21 days ago. What is Decentralization: Advantages & Disadvantages of Decentralisation. v. In order to develop multi skills among employees, emphasis is put on horizontal transfer, just as is the case with job rotation. This essay is available online and was probably used by another student. Functional structure is generally found in organisations in which, single product/services is offered. (b) Are temporary decisions. Each regional office has its own set of functional departments and operates under the strategic policies and guidelines established by corporate management. h. They may hire their own replacement or assume responsibility for disciplining their own members. The functions will differ in non-industrial concerns or institutions. It facilitates product expansion and diversification. Such organizations operate in a single product/service or very closely related products/services. In this project we are going to talk about the definition of Organizational Structures, its Importance, we will go deeper to present each type, state why, how and when they are used, their advantages and disadvantages, Features, Purpose, Factors for Designing them, the added value for using the organizational structures and at the end we will state our conclusion and recommendations. iv. The basic forms of organization structure are simple or entrepreneurial, functional, divisional, and matrix. All major functions are under the direct control of the chief executive, making control easy and effective. Through this way, the horizontal boundaries are also minimised. The owner manager gets invested with a complete knowledge of his organisation and its business. Recently, in telecommunication sector in India, many virtual organizations have been created to provide different services. This is being applied to various fields of activities because of pressure for dual focus, pressure for high information processing, and pressure for shared resources. Divisional structure based on territories served. i. It needs no specialized knowledge for them to understand that there are several departments, each performing a separate function, and all departments must work in unison to achieve an organizations goals. For instance, the marketing department may be divided into four sections; namely, advertising, sales, customer service and marketing research. The word simple has many other senses as Plagiarism Prevention 5. 2. Territorial departmentation has the following advantages: (i) It leads to the benefits of local operations. i. On the completion of project, the internal staff will be sent back to their respective parental departments or may be shifted to other projects. iv. clear, understandable; easy adj. Flatarchy structure is best used when the company has an innovative program or internal incubator, where its able to operate in an existing structure, however through this structure and at any of its levels, employees are preached to suggest ideas and run with them potentially to invent a new flat form. The atmosphere of mistrust may lead to inter-departmental conflicts. feeble-minded; not intelligent synonyms for simple Compare Synonyms clean elementary plain quiet smooth straightforward transparent uncomplicated cinch light picnic snap walkover child's play easy as pie effortless iii. Coordination and control processes tend to be tightly structured. Intel was not happy about that venture and decided not to participate in any such venture. Second, creating self-managing teams is a long-drawn process full of anxiety and tension. ii. This problem gets magnified when there is a tendency for the functional departments to become jealous of their prerogatives and fight to promote and preserve their specialisation rather than work towards unified project objectives. It places attention and efforts on product lines and fixes responsibility for profits at the division level. 2022 Mar 17 [cited 2023 Jan 18]. Upon completion of the project, these people may return to their original departments for further assignment. v. The division can be made responsible for volume of business and profitability. A team-based organization has self-managing teams and coordinating mechanism among these teams as against the traditional groups of people. Divisional structure is similar to dividing an organization into several smaller organizations but it is not quite the same, since each smaller organization is not completely independent. The disadvantages of product based structure are as under: (i) It results in the duplication of personnel and physical facilities. 8. There are some disadvantages to having a simple organizational structure in a business, some of which include: In an organization with no managers to lead employees, the leader becomes the sole provider for employee guidance and instructions for tasks. This can give the leader more work than any other employee in the business. They offer day courses, evening courses and correspondence courses to meet the requirements of different types of students. The major disadvantages of the functional structure are the following: i. The problems emerge because of the following reasons: i. Thus, virtual organization is a temporary alliance between two or more organizations that band together to undertake a specified venture. The concentration camps were the prisoners worst nightmare, involving death, hard labor, and Introduction In todays globalized world business and management is developing dramatically around the world and most people always want to achieve higher goals in various ways. Such departments may be personnel, industrial relations, accounting, research and development, general administration, and so on. In India, several companies like DCM, Gwalior Rayons, Century Mills and Voltas follow divisional structure to organise their operations. Functional Structure 3. Organisation involves establishing an appropriate structure for the goal-seeking activities. No one in the organization is responsible for the project cost and profit. (2013, October 4). Its a hybrid organizational, a blending of the functions and projects. However, top management will continue to control decisions that involve strategic and coordinative variables. Employees who work in such a structure are well organized and grouped according to tasks and functions, Employees focus on specific work or mission, This structure lacks teamwork, communication and discussion, This structure also lacks creativity and it limits the employees ability to develop and improve, Each department operates as an independent company that work on its own aspects & divisions and specify budgets to control its own resources, It offers flexibility by allowing each employee to operate as if its own company, reporting to CEO, one or two upper supervisors, Employees working in different departments, but the same function are unable to communicate well, Divisional structure may have tax implications by raising issues with accounting practices, Sharing knowledge between the employees across different functional divisions, Attaining strong communicational skills & understanding roles, Broadening employees skills & knowledge, thus increasing professional company growth, Creating confusion and conflict between supervisors and bosses about the issue to be reported, Creating confusion regarding employees job roles if not clearly defined, It eliminate red tape that might stall innovation in functional structure, This structure could be confusing and inconvenient if all employees involved dont agree on the way of organizing the structure, Makes it more difficult to coordinate the activities and functions of a larger number of subordinates, This structure have been criticized on the ground that they put a lot of pressure on subordinates by imposing on them too much of responsibility. 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