Advantages and Disadvantages of Functional Organizational Structure In this type of organization, the emphasis is on managing some functions wherever the function may be performed in the enterprise. Committee members can be motivated to participate in group decision making. Decision Sciences & Innovation Department, Functional Authority Organisational Structure. Exhibit 10.9 (b) illustrates a combination structure. Advantages and Disadvantages of Functional Organisation 4. The services of the specialists (project team members) are temporarily loaned to the project manager till the completion of the project. 8 Types of Organizational Structures: their Advantages and Disadvantages Types of Organizational Structures: their Advantages and Disadvantages! Alongside the formal organisation exists are informal organisation which is a set of, evolving relationships and patterns of human interaction within an organisation that. These types of specialized staff are (a) Advisory, (b) Service, (c) Control e.g., Management information system, Operation Research and Quantitative Techniques, Industrial Engineering, Planning etc. In the line organisation, the line managers cannot be experts in all the functions they are required to perform. Matrix Organizational Structure Features: playe Reporting levels both horizontally as well as vertically with cross-company teamwork playe Employees may be part of a functional group (i.e. However, there are some disadvantages also. Functional Organization : All of the companies define its organizational structure to determine the reporting relationships that will exist in the company. Group discussion may lead to creative thinking. (iii) Managers may have to become experts in too many fields. Line and Staff Organisational Structure. Better interaction between committee members leads to better co-ordination of activities. Nature and Characteristics of Organisation Structure 3. Our South Carolina business formation lawyers review the four most common types of business entities in this article and some of the pros and cons of each business structure. 1) Line organization 2) Functional organization 3) Line and Staff organization. All managers must bear that there are two organizations they must deal with-one formal and the other informal. (ii) A line structure promotes fast decision making and flexibility. Once the project has been completed, the team members from various cross functional departments may go back to their previous positions or may be assigned to a new project. Some staff specialists may exert direct authority over the line personnel, rather than exert advice authority (for example, quality control inspector may direct the worker as well as advise in matters related to quality). (vi) Provides emotional support for employees. (iii) Line and staff organisational structure. Some of the common types of organisational structure are given below: 1. 4. The different organisational structures described above have their own advantages and disadvantages. The advantage of functional structure is that the different functional units of th… In a matrix organisation, the product or business group managers and functional managers have somewhat equal power. (iv) Work is critical in terms of possible gains or losses. (v) It has a pecking order: certain people are assigned greater importance than others by the informal group. Advantages & Disadvantages of Different Organizational Structure Types. 2. An organisation where staff departments have authority over line personnel in narrow areas of specialization is known as functional authority organisation. Advantages 4. (i) Use of expertise of staff specialists. (iv) Staff people may resent their lack of authority and this may cause line and staff conflict. They are: Exhibit 10.6 illustrates organisational structures formed based on the above basis of departmentation. (ii) Improved speed and flexibility may not offset the lack of specialized knowledge. For example, the total work activities of an enterprise may be divided into various functions like purchases, production, marketing , finance, quality control. The direction of work flow depends on the distribution of talents and abilities in the organisation and the need to apply them to the problem that exists. The staff officers or managers have staff authority (i.e., authority to advice the line) over the line. A project organisation is a temporary organisation designed to achieve specific results by using teams of specialists from different functional areas in the organisation. Maintenance, Purchase, Stores, Finance, Marketing. While the focus is on international geographic structures, companies may also choose functional or process or product departmentation in addition to geographic pattern while at the head quarter’s the departmentation may be based on function. The jobs or positions in an organisation can be categorized as: a position in the direct chain of command that is responsible for the achievement of an organisation’s goals and. ADVERTISEMENTS: The formal organisation in usually delineated by an organisational chart and job descriptions. This preview shows page 1 - 4 out of 20 pages. (i) Conflict between line and staff may still arise. Prohibited Content 3. Even though an informal organisational structure does not have its own formal organisational chart, it has its own chain of command: (i) Assists in accomplishing the work faster. The line, line and staff and functional authority organisational structures facilitate establishment and distribution of authority for vertical coordination and control rather than horizontal relationships. Project teams are groups of employees who work collectively toward shared goals. All managers must bear that there are two organisations they must deal with-one formal and the other informal. The matrix organisation is illustrated in Exhibit 10.8. Because all of these three organizational structures has advantages and disadvantages. The official reporting relationships are clearly known to every manager. In some projects (complex activity consisting of a number of interdependent and independent activities) work process may flow horizontally, diagonally, upwards and downwards. (iii) Relieves line authorities of routine and specialized decisions. It’s not possible to name one organizational structure as the best for every kind of companies or projects. Advantages and Disadvantages of Staff Organisation 3. basic forms of the organization for project management, with their description, characteristics, advantages and disadvantages, as well as to try to identify cases where some of them can be seen. An advantage of a divisional structure is that each division can operate as a separate, self-sufficient unit without having to rely heavily on the parent company or top management of the organization. The official reporting relationships are clearly known to every manager. 3. Organizations choose their organizational structure based on many factors like: size, its geographic location, the manner of delivering different products and services that they will offer. Employees might suffer burnout or overlook or fail to complete tasks or have their quality of work suffer due to time constraints. engineer) while serving on a team (i.e. Committees may delay decisions, consume more time and hence more expensive. But in the functional authority organisation, staff personnel who are specialists in some fields are given functional authority (The right of staff specialists to issue orders in their own names in designated areas). The project manager gets the needed support from production, quality control, engineering etc. Functional type of organization where the project is part of the functional organization of the enterprise; 2. The formal organisation in usually delineated by an organisational chart and job descriptions. It helps an organization decide how the authority passes on, how message communication happens. Some of the advantages of a pure line organisation are: (i) A line structure tends to simplify and clarify responsibility, authority and accountability relationships. Meaning of Organisation Structure: Organisation structure is the pattern of organisational hierarchy based on authority responsibility relationship. After the objectives of an organization are established, the functions that must be performed are determined. Types of Organisational Structures: their Advantages and Disadvantages! Some of the examples of projects are: research and development projects, product development, construction of a new plant, housing complex, shopping complex, bridge etc. While this type of organisational structure overcomes the disadvantages of a pure line organisaional structure, it has some major disadvantages: They are: (i) the potential conflicts resulting from violation of principle of unity of command and (ii) the tendency to keep authority centralized at higher levels in the organisation. (iv) There is a tendency to become overly dependent on the few key people who an perform numerous jobs. (iii) Because line organisations are usually small, managements and employees have greater closeness. The formal organisation in usually delineated by an organizational chart and job descriptions. (vii) Matrix organisational structure and, These organisational structures are briefly described in the following, A line organisation has only direct, vertical relationships between different levels in the, firm. Product or business group managers are incharge of one or more products and are authorized to prepare product strategies or business group strategies and call on the various functional managers for the necessary resources. From the hierarchal organizational structure to flatter, less bureaucratic structures and the team-oriented matrix, all organizational structures have advantages and disadvantages in key areas. In matrix structures, there are functional managers and product (or project or business group) managers. Models planned to be elaborated are: 1. Advantages and Disadvantages of Committee Organisation. It simply states who works for who. 1.3: Advantages and Disadvantages of Organization Culture: There are some advantages and some disadvantages in each type of the organization. (v) Provides an additional channel of communication. There are three main types of organization structure. Copyright 10. Has only direct vertical relationships between different levels in the firm. 1. A position intended to provide expertise, advice and support for the line positions. This type of structure is used by multinational companies operating in the global environment, for example, International Business Machines USA. 8 Types of Organizational Structures: their Advantages and Disadvantages, assignment help Please respond to the discussion questions below – references must be provided Wk 4: Organizational Culture – Learning Activity 2A – $3.00 Normally the organisational structure is a web structure that is hierarchical in nature (Brown, 1998). 8. Committee decisions are better than individual decisions, 2. If you want to learn more about these three types of organizational structures a detailed article can be found here. There are only line departments-departments directly involved in accomplishing the primary goal of the organisation. and again each region may be subdivided into countries within each region. Course Hero, Inc. Chapter 11: ORGANIZATIONAL STRUCTURES: CONCEPTS AND F0RMATS When two or more people work together to achieve a group result, it is an organization. The levels of responsibility and authority are likely to be precise and understandable. descriptions. 3. 5. 3. a specific product) Advantages: playe Employees have responsibility for their department and organizational projects Line Organisational Structure: Start Download - View PDF Convert From Doc to PDF, PDF to Doc Simply With The Free Online App! (iv) Increases the time required to complete activities. Organizational Types and Considerations for a Small Business Participant Guide Money Smart for a Small Business Curriculum Page 7 of 21 Factors for Choosing an Organizational Type The organizational type you choose for your business, sometimes called a “legal structure,” can impact your taxes and income. The project team focuses all its energies, resources and results on the assigned project. 1. Each business entity has certain advantages and disadvantages that may make one entity preferable over other entities based on your specific circumstances. Get step-by-step explanations, verified by experts. The international divisions or foreign subsidiaries may be grouped into regions such as North America, Asia, Europe etc. Three types of specialized staffs can be identified: Some staffs perform only one of these functions but some may perform two or all the three functions. 2. Excessive focus on internal relations. According to Lounsbury Fish, “Organisation Structure is more than a chart. For example, in a typical firm, line departments include production and marketing. This is also known as functional authority. 3. Slow response to exceptional situations. These organisations have direct, vertical relationships between different levels and also specialists responsible for advising and assisting line managers. Some common organizational types are: Temporary organisation designed to achieve specific results by using teams of specialists from different functional areas in the organisation. 1. (iii) Work is complex having independent activities and specialized skills are necessary for accomplishment. Potential confusion over authority and responsibility. All managers must bear that there are two organisations they must deal with-one formal and the other informal. 8 Types of Organisational Structures: their Advantages and Disadvantages. The functional structure is an organizational structure that divides its operations into separate departments or units according to the role of each department. download.fromdoctopdf.com 6/16/2018 8 Types of Organisational Structures: their Advantages and Disadvantages 3/20 A line organisation has only direct, vertical relationships between different levels in the firm. Course Hero is not sponsored or endorsed by any college or university. Used in organisations that face considerable environmental uncertainty that can be met through a divisional structure and that also required functional expertise or efficiency. For example, in a typical firm, line departments, include production and marketing. They are: (i) As the firm grows larger, line organisation becomes more ineffective. Staff or Functional Authority Organisational Structure. Has only direct vertical relationships between different levels in the firm. Tends to simplify and clarify authority, responsibility and accountability relationships. Types of Organisational Structures: their Advantages and Disadvantages! (iii) It involves members from various organisational levels. (ii) Staff officers may resent their lack of authority. An third you operate across locations that don't require a lot of customization. 4. 4-Common-Types-of-Organizational-Structures (1).docx, MGMT 3000 Tutorial Quiz SAMPLE Questions and Solutions 2016.pdf, The University of Western Australia • COM MISC, Mzumbe University Dar es salaam Campus • MANA MISC, Techno India College of Technology • MBA 209, Copyright © 2020. 8 Types of Organisational Structures: their Advantages and Disadvantages Article shared by Types of Organisational Structures: their Advantages and Disadvantages! Every structure has certain challenges that must be met, but when these negatives are proactively approached, their impact to the business and each worker can be effectively minimized. In a line organisation authority follows the chain of command. (ii) Work is unique and unfamiliar to the organisation. Multinational corporations may have their corporate offices in the country of origin and their international divisions established in various countries reporting to the CEO or president at the headquarters. In this type of structure, the organisation can have different basis on which departments are formed. Advantages’. (iv) It is affected by relationship outside the firm. Since authority relationships are overlapping with possibilities of conflicts, informal relationships between project manager and departmental managers (functional managers) become more important than formal prescription of authority. The clan culture in which friendly environment is present the advantage of this culture is that it has supportive advantage if any problem occurs then the employees eradicate that problem and the operations keep on going without any further delay. 3. In a line organisation authority follows the chain of. (iii) Some staff people have difficulty adjusting to the role, especially when line managers are reluctant to accept advice. Alongside the formal organisation, an informal organisation structure exists which consists of informal relationships created not by officially designated managers but by organisational members at every level. Although the r… Divisional structure prevents organizations from getting the most out of economies of scale. Introducing Textbook Solutions. There are majorly five main types of formal organizational structures – line, functional, line and staff, project management and matrix. After reading this article you will learn about the advantages and disadvantages of different types of organisation:- 1. Convert From Doc to PDF, PDF to Doc Simply With The Free Online App! In choosing a company's organizational structure, management is searching for the one that will bring the company's moving parts together into a well-coordinated, efficient and effective unit. The problem with this structure is the negative effects of dual authority similar to that of project organisation. Conflicts between corporate departments and units. Each of these has their own advantages and drawbacks. Quality control, Cost control, Auditing etc. Importance of Project Organisational Structure: Project organisational structure is most valuable when: (i) Work is defined by a specific goal and target date for completion. Demerits. Image Guidelines 5. 7.   Privacy For a limited time, find answers and explanations to over 1.2 million textbook exercises for FREE! Since managers cannot avoid these informal relationships, they must be trained to cope with it, The informal organisation has the following characteristics, (i) Its members are joined together to satisfy their personal needs (needs for affiliation, friendship etc.). Line and staff have direct vertical relationship between different levels. All managers must bear that there are two organisations they must deal with-one, The formal organisation in usually delineated by an organisational chart and job. Exhibit 10.4 illustrates a staff or functional authority organisational structure. (iv) Compensation for violations of formal organisational principles. Exhibit 10.3 illustrates a single line organisational structure. Group action may lead to compromise and indecision. The organizational structure examples are usually a subject of study so that there can be a perfect structure for a particular company. Personnel Speaking of a multinational organization, accounting activities from all the regional offices and the headquarters would be handled by one accounting department. The cope up with such situations, project organisations and matrix organisations have emerged. Communication, collaboration and decision-making are enhanced or limited by the organizational structure. Let's take a look at the advantages and disadvantages of each so you know what you're up against when you join a new structure. Organisational hierarchy based on authority responsibility types of organisational structures and their advantages and disadvantages pdf line authorities of routine and specialized decisions members! Show us that when it is affected by relationship outside the firm by types of organisational structures above! From the existing permanent organisation and are under the direction and control of the enterprise ; 2 others! 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