1. Lecture 9. The organizational structure of management of enterprise

2. Plan of the lecture 1. Introduction 2. Linear and functional management structure 3. Divisional management structure 4. The principles of the organizational management structure

3. Introduction Under the organizational structure of the enterprise management is understood composition (list) departments, services and departments in management, the system of the organization, the nature of subordination and accountability to each other and the highest governing body of the company, and a set of coordination and information links, the allocation of control functions on different levels and units of management hierarchy.

4. The basis for the organizational structure of enterprise management is the organizational structure of production.

5. The variety of functional relationships and their possible distribution between departments and employees determines a variety of possible organizational structures of management. All these species are generally reduced to four types of organizational structures: linear, functional, and divisional.

6. 1. LINEAR AND FUNCTIONAL MANAGEMENT STRUCTURE FEATURES AND APPLICATIONS. The essence of a linear (hierarchical) structure of management is that control actions on the object can be transmitted only one dominant person - the leader who receives official information only from its directly subordinate to it decision-makers on all issues related to the respective parts of the object and is responsible for his work to a higher manager.

7. This type of management structure is used in the operation of small businesses with a simple production if they have no branched cooperative relationships with suppliers, customers, research and design organizations, etc. At present, such a structure is used in the management of production sites, individual small shops and small firms homogeneous and simple technology.

8. ADVANTAGES AND DISADVANTAGES Advantages Advantages of the linear structure explained by the simplicity of use. All the duties and powers are clearly defined, and therefore the conditions for rapid decision-making process in order to maintain the necessary discipline in the team.

9. Among the shortcomings of the linear construction organization is usually marked rigidity, inflexibility and an inability to further growth and development of the company. The linear structure is focused on the large amount of information transmitted from one level of government to another, limiting the initiative from the lower levels of government employees. It demands much of the skills of managers and their authority in all matters of production and management of subordinates.

10. Increase of scale and complexity accompanied by the deepening division of labor, differentiation of functions of the production system. The growth of the volume of work is accompanied by a deepening of the management of functional separation of administrative work, the isolation of specialized financial control units. This creates a functional type of management structure.

11. Functional structure Functional structure has emerged as the inevitable result of more difficult to manage. The peculiarity of the functional structure is that although preserved unity of command, but the individual control functions form a special unit whose employees have the knowledge and skills to work in the field of management.

12. In principle, the establishment of the functional structure is reduced to a group of staff at that wide tasks that it performs. Specific features or activities of a unit (unit) correspond to the most important areas of activity of the enterprise.

13. If the size of the organization or department of the great, the main functional departments can, in turn, subdivided into smaller functional units. They are called secondary or derivative. The basic idea here is to maximize the benefits of specialization and do not overload management. It is necessary to observe some caution, so that such a department (or division) would not put their own goals above the overall objectives of the enterprise.

14. ADVANTAGES AND DISADVANTAGES The advantages of functional structure is the fact that it encourages business and professional specialization, reduces duplication of effort and consumption of material resources in the functional areas, and improves coordination.

15. However, the specialization of functional departments often an obstacle to the success of the enterprise as difficult to coordinate management actions.

16. 2. Divisional management structure FEATURES AND APPLICATIONS The first development of the concept and the beginning of the implementation of divisional management structures belong to the 20th year, and the peak of their industrial use accounts for 60 70 years.

17. The key figures in the management of organizations in the divisional structure are not heads of functional units, and control (managers) in charge of production department.

18. When using a divisional - product management structure set up offices on the main product. Guide the production and marketing of a product (service) are transferred to one person who is responsible for this type of product. Heads of support services under his control.

19. ADVANTAGES AND DISADVANTAGES Various types of divisional structures have the same goal - to provide a more effective response to the company for a particular environmental factor.

20. The product structure makes it easy to cope with the development of new products, for reasons of competition, technological development and meet the needs of customers. Regional structure allows for more effective integration of local legislation, socio-economic systems and markets as the geographical expansion of market areas.

21. 3. The principles of the organizational management structure In general, rational organizational structure of the company must meet the following requirements: have the fit and function, to ensure reliability and to ensure good governance at all levels; be quick, to keep up the production process; have a minimum number of layers of management and rational connection between governments; be cost-effective, to minimize the cost to perform management functions.

22. Terms and Concepts 1. The organizational structure of the enterprise management 2. The linear structure of governance 3. Functional management structure 4. Divisional management structure

23. Questions 1. What is meant by the organizational structure of the enterprise management? 2. What are the main types of organizational structures of management. What are the advantages and disadvantages of each of these types of control structures? 3. What factors influence the choice of a governance structure? 4. That may be indicative of the effectiveness of management structures?