1. Fundamentals of Organizational Structure

2. Organization Structure
Three Components
Formal reporting relationships
Grouping of people and departments
Design of systems to ensure effective communication, coordination, and integration

3. Linkages Vertical Control Centralized decision-making How achieved:
Hierarchical referral
Rules and plans
Vertical Information Systems

4. Linkages Horizontal Learning Decentralized decision-making
How achieved:
Information systems
Direct contact
Task forces
Integrator
Teams

5. Organizational Structure
Required Work Activities
Reporting Relationships
Departmental Grouping Options
Functional
Divisional
Multifocused
Horizontal
Modular

6. Functional Structure
CEO
Finance
Marketing
Engineering

8. Divisional Structure AKA Product Structure
Decentralized decision-making
Strengths
Weaknesses

9. Divisional Structure
CEO
Product One
Product Two
Product Three

11. Divisional Structure
CEO
Soft Drinks
Aquafina
Gatorade

12. Geographical Structure
Designed according to where product will be offered

13. Geographic Structure
CEO
United States
Asia
Europe

15. Matrix Structure Combines functional and divisional structure
Conditions
Need to share scarce resources
Two critical outputs:
In-depth knowledge and new products
Complex and uncertain domain
Who’s in charge?
Strengths
Weaknesses

17. Horizontal Structure Reengineering
Faster and better service for customers
Organized around processes and teams
Strengths
Weaknesses

19. Modular Structure Subcontracts processes
Manages them from a central hub
Business focuses only on core competency
Strengths
Weaknesses

21. Hybrid Structure
Centralized functional structure for stable products; other products may have self-contained departments
Certain departments work through entire organization (functional), but processes are focused in other areas (horizontal).

23. Applications Have scarce resources and need efficiency?
Need inter-functional coordination, innovation, and learning?

24. What Causes Problems? Decision-making is delayed
Non-responsiveness to environmental changes
Too much conflict/ “Turf wars”