TYPES OF ORGANISATION

DIFFERENT TYPES OF ORGANISATION ARE:- Project Organisation Matrix Organisation Committee Organisation Line Organisation Line & Staff Organisation Functional Organisation Divisional Organisation

The Line organization Structure The Line organization authority is delegated directly from top to. There is vertical line of authority running from top to the bottom of the organisation. The man at the top has the highest authority and it is reduced at each successive level down the hierarchy. Suitability: This kind of structure is suitable for smaller organizations.

Structure of Line Organization

Merits Simplicity- easy to understand by workers. Discipline- Required high discipline because each manager has direct contact with his subordinates. Prompt Decision- manager is not suppose to consult staff specialist. Orderly Communication. Easy Supervision and Control. Economical- As no staff specialist are required.

DEMERITS Lack of Specialization due to no specialization. Absence of Conceptual thinking- Since they are overburdened with administrative work. Autocratic Approach- Manager has monopoly of decision making. Little upward communication.

LINE AND STAFF ORGANIZATION Staff authority is used to support the line authority. Line and staff organizations have both line and staff executives. Line executives are assisted by staff specialists in planning, distribution, quality, legal, audit, public relations, etc. For example, a production manager (a line authority) does not have enough time and experience to handle labour relation problems. Staffs help them in doing so.

Line and Staff Structure Organization

Merits Demerits Planned Specialization Quality Decisions Expert Advice Training Ground for Personnel Confusion Ineffective staff Line and Staff Conflicts Suitability: This structure can be followed in large organizations where specialization of activities.

Functional Organization This kind of organizational structure classifies people according to the function they perform in their professional life or according to the functions performed by them in the organization. Under it, organisation is divided into a number of functional areas. Each function is managed by an expert in that area.

Functional Organization

Merits Demerits Specialization Executive Development Scope for Expansion Better Control Violates the principle of unity of command Complexity Lack of coordination Suitability: It has been criticized by many authors due to violation in unity of command. LM Prasad 341, chapter 13 TN Chhabra 263, chapter 14 http://www.transtutors.com/homework-help/Industrial+Management/Organization/limitations-and-suitability-of-functional-organization.aspx

Divisional Organization This is the kind of structure that is based on the different divisions in the organization. For example, same food-processing company may have three separate divisions for biscuits, bread and milk-products, respectively

Divisional structures can be divided into: Product basis – It is based on organizing employees and work on the basis of the different types of products. If the company produces three different types of products, they will have three different divisions for these products. Market basis – It is used to group employees on the basis of specific market the company sells in.

Geographic basis – large organizations have offices at different place, for example there could be a north zone, south zone, west and east zone. The organizational structure would then follow a zonal region structure.

Matrix Organization Combination of function, and product structures. Matrix organization has been developed to meet the need of large organizations for a structure which is flexible and technically sound. An individual has 2 bosses- his permanent and the project manager. Suitability- it can be successful only when there is an agreement amongst the key executive.

Matrix Organization Structure

Merits Demerits Development of general management skills Suited to fast change and flexibility High product, project or program visibility Processes multiple tasks in parallel, easy to cross functional line; better coordination in function Innovation/growth restricted to existing project areas. Shared functions hard to coordinate Less top management control Competition for corporate resources

MERITS OF MATRIX ORGANIZATION  Full time focus of personnel on project of matrix. It stresses authority of knowledge than the status. Specialized technical skills to the product/market. Flexible structure- easily adapted to changes. Helps in the development of both general and functional skills.

Demerits of Matrix Organization Costly to maintain personnel pool of staff matrix. Participants experience dual authority of matrix manager and functional area manager. Little interchange with functional groups outside the matrix. Participants of matrix need to have good interpersonal skill in order for it to work. Frustration and confusion due to dual chain of command.

COMMITTEE ORGANISATION A committee is a group of persons formed to discuss and deliberate on problems and to recommend or decide solutions. It may be authorized to deal with all or specific activities. A committee may be constituted at any level of organisation and its members may be drawn from various departments.

TYPES OF COMMITTEES Standing or Ad Hoc Committee. Executive or Advisory Committee. Line or staff Committee. Formal or Informal Committee.

ADVANTAGES Group Judgement Effective coordination- integrates viewpoint of managers from different departments. Motivation through participation Management development. Consolidation of authority

DISADVANTAGES Expensive Slow decision Compromise decisions Tyranny of few Divided responsibility Misuse of committees