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