Importance of Organizational Structure - Management Perspectives

Summary

This module explores organizational structures, their importance, and various types like functional, multi-divisional, and matrix. It discusses the significance of organizational structures in defining authority, information flow, and control. The module also covers boundary-less structures like modular and virtual organizations. Criteria for choosing a structure include marketing advantage, parenting advantage, people test, and feasibility. Lastly, it touches on leadership theories, marketing, human resource management, and motivation.

Takeaways

• 🏫 Module Six focuses on the management perspective, covering organizational structures, leadership theories, marketing, human resource management, communication, and motivation.
• 📚 Despite being comprehensive, this module has not been heavily emphasized in exams, with questions constituting less than 5% of the syllabus over the past few years.
• 👥 Organizational structure is defined as the arrangement through which authority and information flow within an organization, including hierarchy and boundaries.
• 🔍 Importance of organizational structure includes defining responsibilities, communication paths, authority levels, control spans, and bureaucracy levels within a company.
• 🏢 Types of self-contained organizational structures discussed are functional, multi-divisional, holding company, matrix, transnational, team-based, and project-based.
• 🌐 Boundary-less organizational structures include follow, modular, outsourcing, offshoring, shared services, alliances, virtual, and collaborative.
• 📏 To choose an organizational structure, organizations should consider nine benchmarks related to objectives, marketing advantage, parenting advantage, people test, feasibility test, culture, difficult link, redundancy, accountability, and flexibility.
• 📈 The functional organizational structure aligns departments and divisions based on functions within the organization, like sales, finance, production, and marketing.
• 🌐 The transnational organizational structure aims to balance global scale with local responsiveness, often adopted by companies with international branches.
• 🔄 The matrix organizational structure combines functional structures with other organizational forms, creating dual authority lines within the organization.
• 🔑 The modular organizational structure involves outsourcing non-core processes and assembling components in-house, common in complex manufacturing like airplanes and cars.

Q & A

What is the main focus of Module Six in the syllabus?

Module Six focuses on the management perspective, covering topics such as organizational structures, leadership theories, marketing, human resource management, communication, and motivation.

Why might the examiner have examined less from this section of the syllabus?

The examiner might have examined less from this section because the content is more or less contained in the Level 1 business management and information system modules.

What is the definition of an organization according to the script?

An organization is defined as a social arrangement which pursues collective goals, controls its own performance, and has a boundary separating it from its environments.

What is organizational structure and why is it important for companies?

Organizational structure refers to the hierarchy of authority within an organization and the way authorities and information are routed. It is important because it shows the level of authority, the flow of information, who is responsible for what, and the span of control within the organization.

What are the two classifications of organizational structures mentioned in the script?

The two classifications of organizational structures are self-contained organizational structures and boundary-less organizational structures.

Can you explain the functional organizational structure?

A functional organizational structure is designed in relation to the various departments or functions within the organization, such as sales, finance, production, and marketing departments.

What is a multi-divisional organizational structure?

A multi-divisional structure is where an organization is divided into semi-autonomous divisions that may differ by territory, products, or markets, and is often adopted by companies that produce more than one product or operate in more than one territory.

How is a holding company structure different from other organizational structures?

A holding company structure is an extreme form of division where each division is a separate legal entity, similar to a parent-subsidiary relationship, with each division operating as a distinct entity under a parent company.

What is a matrix organizational structure and how does it work?

A matrix organizational structure attempts to ensure coordination across functional lines by embodying dual authority. It combines functional structures with other organizational structures, allowing individuals to have responsibilities in both a division and a functional department.

What is a transnational organizational structure and its key features?

A transnational organizational structure attempts to reconcile global scope and scale with local perspectives. Its key features include a response to global challenges and a high proportion of fixed responsibilities in a horizontal line of management.

What are the nine benchmarks that organizations have to follow to test which organizational structure will be suitable for them?

The nine benchmarks include marketing advantage, parenting advantage, people test, feasibility test, specialized culture, difficult link, redundancy, accountability, and flexibility.

What is a boundary-less organizational structure?

A boundary-less organizational structure includes various forms such as following, modular, outsourcing, offshoring, shared services, alliances, virtual organization, and collaborative organizational structures, which often involve collaboration with outside parties and flexibility in operations.