DAIS 1

““It is It is notnot the s the strontronggest est of the species that of the species that

survives, survives, nornor the the most most intelliintelliggentent, but , but the the

one most one most resrespponsive onsive

to chanto changgee.”.” — Charles — Charles

DarwinDarwin

DAIS 2

Role of HRMRole of HRMOrganizational structure Organizational structure

DAIS 3

DAIS 4

7S - 7S - Richard Pascale, Tony Athos, Richard Pascale, Tony Athos, Tom Peters and Bob WatermanTom Peters and Bob Waterman

The Principles of the model are:• All the elements are equally important. • All elements are inter-connected- altering one element

affects other elements. • Effective strategy is more than individual subjects - it is the

relationship between strategy, structure and systems coupled with skill, style and super ordinate goals.

• Provide a checklist of important variables for evaluating the proposed strategies (coherence)

• It provides a way of examining an organisations operation and its inter-relationships and core competencies.

• Peters and Waterman's in Search of Excellence 1982, uses it as a starting point for identifying and examining other relationships.

DAIS 5

Organizational architectureOrganizational architecture Totality of a firm’s organization :

formal structure, control systems, incentives, processes, organizational culture and people. To be effective:– Strategy and structure must fit– Strategy, structure and competitive

environment must fit

DAIS 6

Organizing human Organizing human resourcesresources

• You can’t see it, but it’s probably the most important thing in a business.• Why do organisations need a

structure?

DAIS 7

Let’s address these questions:Let’s address these questions:

1. What is meant by organisation structure?

2. How does one design a suitable structure?

DAIS 8

Design of structureDesign of structure Nature of function, type of business,

geographical area – Entrepreneur /small team– Functional structure– Product structure– Key customers structure (verticals)

DAIS 9

Key principles of org strucKey principles of org struc1. Span of control: wide/ narrow

– Number of subordinates reporting directly to a manager– Wider the span of control; the greater the degree of

delegation– More trust : everyone made accountable

2. Levels of hierarchy : tall– Slow decision making– Narrow span of control– Greater sense of remoteness at lower levels– Greater the levels of hierarchy, longer the chain of

command

3. Chain of command : route through which authority is passed on

DAIS 10

Key principles of org struc Key principles of org struc (contd)(contd)

4.Delegation : passing down of authority to perform tasks and take decisions from higher to lower levels– Accountability– Authority– Responsibility

DAIS 11

Centralisation/ DecentralisationCentralisation/ Decentralisation

Centralisation Keeping important decision-making

powers in the HODecentralisation Passing decision making powers to

managers in other areas

DAIS 12

Centralisation Decentralisation

Fixed set of rules and procedures

Allows more local decisions to be made which reflect different conditions

Business has consistent policies, prevents conflict

Develops more junior managers and prepares them for challenging roles

Senior managers take decisions in the interest of the whole business

Allows delegation and empowerment and these will have positive effects on motivation

Central buying should allow for greater economies of scale

Decision making in response to changes – local market conditions should be quicker and more flexible

Senior managers at central office will be experienced decision makers

HO involvement not required all the time

DAIS 13

Centralization+ facilitates coordination+ ensures that decisions are consistent

with organizational objectives+ gives top-level managers means to

bring about needed organizational changes

+ can avoid duplication of activities

DAIS 14

Why Decentralization?+ overburdening of top management if decision-

making is centralised+ gives top-management time to focus on critical

issues by delegating more routine issues to lower-level managers

+ motivational theories favour individual freedom and empowerment

+ better decisions made closer to the spot+ increasing control – fewer excuses for poor

performance if power given to (subunits) managers

DAIS 15

Do all organisations need structure? Do all organisations need structure? Draw one for your dream companyDraw one for your dream company

• Formal division of organization to subunits (products, functions)

• Location of decision-making responsibilities within that structure

When done, evaluate it in terms of:1. Speed, accuracy of communication2. Span of control3. Centralization4. Degree of delegation used5. Can structure affect employee motivation,

performance

DAIS 16

Does your org-chart show?Does your org-chart show? Who has overall responsibility for decision making?

Formal relationships between different people and departments

Ways in which accountability and authority may be passed down the organisation = chain of command

The number of subordinates reporting to each senior manager = span of control

Formal channels of communication – vertical, horizontal

Identity of the supervisor or manager to whom each employee is answerable and should report to

DAIS 17

Points to ponder…Points to ponder… Tall v Flat: “Tall” organizations have layers of managers

structured in a hierarchy. ‘Flatter’ companies have fewer layers - which they claim gives them more flexibility.

Chain of Command: A tall company has a long chain of command, but managers have a narrow span of control. Hierarchies have their advantages, but are they too rigid?

Team Working: In multinational drugs company Eli Lily, staff work in numbers of different teams in a matrix structure.

Human Costs: Firms flatten hierarchies by cutting staff, but what about the human cost?

DAIS 18

size, range of activities influence size, range of activities influence org-structure?org-structure?

• Small firms entrepreneurial

Owner

DAIS 19

Does style of mgmt, retrenchment, adopting Does style of mgmt, retrenchment, adopting new technologies affect org-structure?new technologies affect org-structure?

• Theory X => smaller span of control• Theory Y => wider span of control,

few levels of hierarchy• Retrenchment => delayering,

shortening the chain of command• Adopting new technologies => ???

DAIS 20

Hierarchical or BureaucraticHierarchical or Bureaucratic

Advantages Divisions could be based on functional

departments or regions or products Role of every employee clearly defined Clearly identifiable chain of command ‘Role’ determines hierarchy

DAIS 21

Hierarchical or BureaucraticHierarchical or BureaucraticDisadvantages1. One-way (top-down) communication is

the norm2. Minimal horizontal links between

departments = lack of coordination3. Tunnel vision – looking at problems from

the point of view of their department alone

4. Inflexibility5. Not pro-active - cannot cope with

change!

DAIS 22

Matrix structuresMatrix structures

• Matrix– Eliminates many problems associated

with hierarchy, cuts across departments and creates project teams made up of people from all departments, divisions

– Task or project focused

DAIS 23

Matrix structureMatrix structure

Marketing Operations Mgmt

Finance Personnel

Product Development

√ √

Sales, Service

√

Promotion, PR team

√ √ √

DAIS 24

MatrixMatrixAdvantages• Allows total communication between

managers • Approach – what is good for the

business as a whole• Specialist knowledge in different

areas = more creative solutions• Can respond to changing market

conditions

DAIS 25

MatrixMatrixDisadvantages• Teams empowered – less direct

control from the top• Conflicts – two bosses• Faster reaction but reduced control

DAIS 26

Why did matrix emerge?Why did matrix emerge?• The matrix model came from the recognition that companies not

only have vertical chains of command but that people also work horizontally, across their functional specialisation. In theory, the matrix allows managers to harness the services of employees irrespective of their function, to work collaboratively on key projects.

• The matrix manager can pool necessary resources in order to achieve what, from the strategic objective, is the overriding priority.

• It slices through unwieldy lines of control. It frees up leadership in everyone concerned, not relying on few people who have positional power.

A single multidisciplinary or cross-functional team is one thing - but what happens when a number of these cross-functional teams are working simultaneously requiring people to relate to one another vertically, horizontally, and diagonally,  all at the same time?

DAIS 27

DelegationDelegationReleases managers to undertake a more strategic role

If the task is not made clear, training not provided, then delegation is unsuccessful

Shows trust in subordinates and this motivates staff to do well

If sufficient authority not granted, then delegation will be unsuccessful

Develops and trains staff for more positions and is one way of assisting people to achieve

Managers may delegate boring jobs that they do not want to do – this will not prove to be motivating

DAIS 28

DelayeringDelayeringReduces business costs There could be one-of

costs of making managers redundant

Shortens chain of command

Increased workloads for those who remain

Increases span of control Overwork and stress

Increase opportunity for delegation

The fear that redundancies might be used to cut costs creates insecurity

Increases workforce motivation due to less remoteness

‘Need for security’ is an important need - Maslow’s theory

advantages disadvantages

DAIS 29

questionsquestions1. Would you advise a multinational

furniture retailer to adopt a centralised management structure? Explain your answer

2. Explain the link between span of control and degree of delegation exercised

DAIS 30

Henry MintzbergHenry Mintzberg• Interpersonal roles

– Figurehead– Leader– Liaison

• Information roles• Decision making roles

DAIS 31

Mintzberg contdMintzberg contd• A manager is not always a

systematic planner. Planning carried out on a day-to-day basis

• Managers perform a number of routine duties

• Managers prefer verbal communication

DAIS 32

Tom PetersTom PetersIn Search of Excellence - the eight themes

• A bias for action active decision making - 'getting on with it'.

• Close to the customer - learning from the people served by the business.

• Autonomy and entrepreneurship - fostering innovation and nurturing 'champions'.

• Productivity through people - treating rank and file employees as a source of quality.

• Hands-on, value-driven - management philosophy that guides everyday practice - management showing its commitment.

• Stick to the knitting - stay with the business that you know.

• Simple form, lean staff - some of the best companies have minimal staff.

• Simultaneous loose-tight properties - autonomy in shop-floor activities plus centralised values.

DAIS 33