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Chapter 5 Business organisation, structure and strategy
Qiang Jiang School of Business Sichuan University, China
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Topic list 1 The informal organisation 2 Organisational structure 3 Levels of strategy in the organisation 4 Centralisation and decentralsation
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1 The informal organisation
Benefits of the informal organisation Employee commitment Knowledge sharing Seed Responsiveness Co-operation
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1 The informal organisation
Problems of informal organisation: Collectively against organisational interests Moral-damaging rumours Too important to fulfilling employees’ needs Violating safety or quality assurance measures
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1 The informal organisation
Managers can minimize problems by: Meeting employee’s needs as far as possible Harnessing the dynamics of the informal organisation Involving managers themselves in the informal structure
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2 Organisational structure
Components of the organisation Strategic apex Operating core Middle line Technostructure Support staff
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2 Organisational structure
Functional departmentation Advantages: Expertise is pooled Avoid duplication Facilitates Centralised Disadvantages: Communication problems Poor co-ordination Vertical barriers
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2 Organisational structure
Geographic department Advantages: Local decision-making Cheaper Disadvantages: Duplication Inconsistency
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2 Organisational structure
Product/brand departmentation Advantages: Accountability Specialisation Co-ordination Disadvantages: Increases the overhead costs Fail to share resources
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2 Organisational structure
Customer departmentation Sales department Business customers Divisionalisation Properly delegated authority Large enough Management support Potential for growth Scope and challenge ‘arm ‘s length’ transaction
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2 Organisational structure
Hybrid structures The simple structure A pull to centralise The simple structure is characteristic of small, young organisations
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2 Organisational structure
Matrix and project organisation Advantages： Greater flexibility of people, workflow and decision-making, tasks and strucure Inter-disciplinary co-operation Motivation and employee development Market awareness Horizontal workflow
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2 Organisational structure
Matrix and project organisation Disadvantages： Dual authority Conflicting demands or ambigurous roles Cost Slower decision making
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2 Organisational structure
The new organisation Flat structures Horizontal structures Chunked and unglued structures Output-focused structures Jobless structures Virtual organisations
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2 Organisational structure
The shamrock organisation Professional core Self-employed professionals Contingent work force Consumers Three kinds of flexibility: Personal costs Personnel numbers Skills
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2 Organisational structure
Span of control refers to the number of subordinates responsible to a superior Capabilities Nature of the manager’s workload Geographical dispersional
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2 Organisational structure
Tall and flat organisations Scalar chain Delayering Information technology Empowerment Economy Fashion
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3 levels of strategy in the organisation
Corporate strategies Scope of activities Environment Resources Values Timescale Complexity
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3 levels of strategy in the organisation
Business strategy Functional/operational strategies Marketing Production Finance Human resources management Information systems R&D
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3 levels of strategy in the organisation
Corporate strategies Business strategy Functional/operational strategies The anthony hierarchy
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3 levels of strategy in the organisation
Corporate strategies Business strategy Functional/operational strategies The anthony hierarchy
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3 levels of strategy in the organisation
The anthony hierarchy Strategic management Tactical management Operational management
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4 Centralisation and decentralisation
Geography Authority Advantages an disadvantages of centralisation
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