Presentation on theme: "D39BU – Business Management in the Built Environment"— Presentation transcript:
1D39BU – Business Management in the Built Environment Company OrganisationDr. Turker Bayrak
2Learning OutcomesExplain the meaning & nature of organisation structure.Identify levels of organisation & debate the importance of the hierarchy.Explore the factors to be considered in the design of organisation structure.Explain the importance of good structure & consequences of a deficient structure.Review the relationship between the structure of an organisation & the people who work within it.
3IntroductionThe intensification of research on organisational effectiveness by scholars in the fields of management, social anthropology and organisational development has led to the identification of several organisational factors that have influential roles on the determination of organisational performance.(Becker, 2001)
4Organisations are made up of complex & dynamic systems comprising: Organisation Strategy,Structure &Culturewhich affect the implementation of organisational goals & objectives
5In order to achieve its goals & objectives, the work of an organisation has to be divided among its members.
6Some structure is necessary to make possible the effective performance of key activities & to support the efforts of staff.
7Organisation Structure Structure provides the framework of an organisation & its pattern of management.
8Organisation Structure It’s by means of structure that the purpose & work of the organisation are carried out.
9Organisation Structure Who reportsTo whom &For what
10Class ActivityExamine critically arrangements for the division of work & linking together of activities in your own/ some other organisation of your choice.Design the organisation chart.Comment on the apparent effectiveness of this organisation structure.Give reasons, together with practical examples, in support of your comment.Explain fully changes you would recommend in order to help improve organisational performance.
11Organisation Structure is determined by Purpose of the group People who make up the groupTasks involved in goals of the groupCulture (values) of the groupAuthority, formality, centralisation of decision-makingDegree of specialisation, standardisationExternal environment
12Design ProcessThe purpose and goals of the organisation must be very clear.The design process of organisation structure consists of four elements:Assignment of tasks and responsibilities for the individual job positions,Grouping the individual positions into units and departments,Determining various mechanisms for the vertical co-ordination, andDetermining various mechanisms for the horizontal co-ordination
13Organisation ChartAn organisation chart is a simple line diagram showing the organisation’s structure.
14Organisation Chart The organisation chart normally depict: major organisation positions,chain of command,reporting relationship, andcommunication channels
15Chairperson,M.D., and C.E.O.Secretary’s OfficeGMMarketingGeneralCounselOperationsH.R.FinanceMarket SupportCommunicationField Mgmt Region 2Field Mgmt Region 1ActuarialInsurance OperationsIMSHealth UnitH.R. DevelopTrainingInvestmentInternal AuditFinancial AnalysisReal EstateTax
16Types of Organisation Structure Functional organisationProduct-based organisationGeographical organisationDivisionalised organisationMatrix oranisation
18Functional Organisation AdvantagesTasks are linked on basis of common functions (marketing, finance, etc)Better opportunities for advancementDisadvantagesHierarchical chain of commandParticular functional groups are constrained by overall organisational goals
24Divisionalised Organisation AdvantagesDivided into specialised divisions (product and/or geographical)Each division has its own functional groups, in addition to HQ functional groupsGood for highly diversified groups in many regionsDisadvantagesComplex chain of command
26Matrix ManagementAll resources and skills are equally shared across the organisationSuits a project oriented organisationCan be very efficient way of utilising resourcesProvides variety of projects, and hence can be stimulating and satisfying for employeesIt may result in overloading of some membersAllocation of resources between different projects can be challenging.
28Matrix OrganisationsA functional organisation with project-based structuresAdvantagesHelps the functioning of highly complex industries, such as aircraft manufactureProvides stability and efficiency of hierarchical structure with flexibility and informality of team workProject manager has direct contact with clients
30Division C D A B Human Resources Quality Assurance Finance Product ManagementFinance
31Matrix organisation – some practical experiences Enforces uniform policy application across divisions.Facilitates sharing of specialised resources.Brings together functional expertise and customer responsiveness.BUTCan result in responsibility conflicts and confusion in responsibilities and reporting. (Who’s my boss?)Overall resource planning has to be effectively managed – otherwise overloads and/or poor utilisation.
32Matrix Organisations Disadvantages Potential conflict over resources and division of authorityPossibility of divided loyalties between project groups and functional groups
33Informal Organisations As well as formal structures, organisations do have informal structures not designed by management but emerging from common the interest or friendship.Informal organisation elements also impact on how organisations behave.
34Span of ManagementSpan of management, or span of control, is the number of subordinates reporting directly to a specific manager.Managers should have neither too many nor too few subordinates.Then, what is a “good balance” of the span of management?
35Span of Control"The nearer we approach the supreme head of the whole organization, the more we ought to work towards groups of three; the closer we get to the foot of the whole organization, the more we work towards groups of six.“The Soul and Body of an ArmyArnold, London, 1922, p.229
36Wider Span of Management Research indicates spans of management can be wider under certain circumstances:Subordinates' work is such that little interaction with others is required.Managers and/or their subordinates are highly competent.The work of subordinates is similar.Problems are infrequent.
37Subordinates are located in close physical proximity to one another. Managers have few non-supervisory duties to perform.Managers have additional help such as secretaries or assistants.The work is challenging enough to motivate subordinates to do a good job.(From GA’s experience, a critical factor is the individual manager’s ability to delegate. Refer P282 of text –’Guidelines for effective delegating’).
38How span of control affects organisational structure 49 PositionsNo of Levels = 3
39How span of control affects organisational structure 49 PositionsNo of Levels = 4
40Hierarchical LevelsOrganisational effectiveness is influenced by the number of its hierarchical levels.Problems with very tall organisations:high administrative overhead,slow communication and decision making,more difficult to pinpoint responsibility for various tasks, andencouragement of formation of dull, routine jobs.
41Centralisation Decentralisation Allocation of authorityAuthority:Legitimate power to commit people, money and materialsOranisations must decide how much authority to delegateFrom the top (pyramid hierarchy)From the centre (small entrepreneurial)
42Critical ReflectionThe trend is towards more horizontal structures, teamwork, empowerment, flexible working arrangements & informal relationship.Do you believe this has reduced significantly the need for, & importance of formal organisational structures?What do you see as the likely effects of developments in ICT for organisational structure design?
43Centralisation Decentralisation Highly centralisedSenior managers hold the authorityHighly decentralisedAuthority is widely diffused at every levelWhat are the implications of each approach to organisations?
44Decentralisation Advantages Disadvantages Prevents top management overloadSpeeds operational decisionsContributes to staff motivationDisadvantagesRequires good communicationRequires good managerial coordinationMay result in conflict between departments
45Terminology Authority Responsibility (accountability) Legitimate power to commit people, money and materialsAt the top or delegated from the topResponsibility (accountability)Obligation to performCan not be delegated
46Terminology Power Empowered Ability to implement actions May have authority but lack powerEmpoweredManaging people such that team members are given authority to make decisions on day-to-day basis