After the objectives of an organization are established, the functions that must be performed are determined. Each structure has its distinctive advantages and disadvantages which will run through now. In this type of organisational culture a dominant head sits in the centre surrounded by intimates and subordinates who are the dependants (Harrison, 1993). Personnel are assigned to a project from the existing permanent organisation and are under the direction and control of the project manager. 8 Types of Organizational Structures: their Advantages and Disadvantages Types of Organizational Structures: their Advantages and Disadvantages! (ii) Work is unique and unfamiliar to the organisation. Functional Organization : All of the companies define its organizational structure to determine the reporting relationships that will exist in the company. Normally the organisational structure is a web structure that is hierarchical in nature (Brown, 1998). Now that we have seen the advantages and disadvantages of the divisional structure, it is … 2. The line functions are production and marketing whereas the staff functions include personnel, quality control, research and development, finance, accounting etc. Advantages 4. (iv) There is a tendency to become overly dependent on the few key people who an perform numerous jobs. Get step-by-step explanations, verified by experts. 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. A position intended to provide expertise, advice and support for the line positions. Advantages’. There are three main types of organization structure. Exhibit 10.3 illustrates a single line organisational structure. Overemphasis on group decision making. The project manager gets the needed support from production, quality control, engineering etc. Functional manager are in charge of specialized resources such as production, quality control, inventories, scheduling and marketing. The problem with this structure is the negative effects of dual authority similar to that of project organisation. 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. A project organisation is a temporary organisation designed to achieve specific results by using teams of specialists from different functional areas in the organisation. Communication, collaboration and decision-making are enhanced or limited by the organizational structure. 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 functional structure is an organizational structure that divides its operations into separate departments or units according to the role of each department. Most large organisations belong to this type of organisational structure. (i) Use of expertise of staff specialists. Line Organization (Oldest and Simplest Style) In this type of organization, the line of authority flows directly from top to bottom and the line of responsibility 8 Types of Organisational Structures: their Advantages and Disadvantages For example, the total work activities of an enterprise may be divided into various functions like purchases, production, marketing , finance, quality control. (i) Even through a line and staff structure allows higher flexibility and specialization it may create conflict between line and staff personnel. Such organisations have both line and staff departments. Advantages and Disadvantages of Committee Organisation. Quality control, Cost control, Auditing etc. In this type of structure, the organisation can have different basis on which departments are formed. Models planned to be elaborated are: 1. The line officers or managers have the direct authority (known as line authority) to be exercised by them to achieve the organisational goals. 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. (iii) Line and staff organisational structure. Advantages and Disadvantages of Staff Organisation 3. 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. The great advantage of this option is that a business can optimize it structure along multiple dimensions at the same time. TOS 7. and again each region may be subdivided into countries within each region. Maintenance, Purchase, Stores, Finance, Marketing. The matrix organisation is illustrated in Exhibit 10.8. This preview shows page 1 - 4 out of 20 pages. It’s not possible to name one organizational structure as the best for every kind of companies or projects. Group discussion may lead to creative thinking. An third you operate across locations that don't require a lot of customization. In this structure, project members are chosen for their special capabilities in the light of the goals to be accomplished from different functional departments, viz., production, engineering, quality control, marketing research, and marketing. Employees might suffer burnout or overlook or fail to complete tasks or have their quality of work suffer due to time constraints. The matrix organization structure can also sometimes lead to work overload on team members, since their project workload is often in addition to their regular functional duties. 1. Committee Organisational Structure Features: (a) Formed for managing certain problems/situations, 1. … Functional type of organization where the project is part of the functional organization of the enterprise; 2. For example, in a typical firm, line departments include production and marketing. (i) Conflict between line and staff may still arise. Advantages and Disadvantages of Line Organisation 2.   Privacy Potential confusion over authority and responsibility. These organisational structures are briefly described in the following paragraphs: A line organisation has only direct, vertical relationships between different levels in the firm. (iii) Some staff people have difficulty adjusting to the role, especially when line managers are reluctant to accept advice. Has only direct vertical relationships between different levels in the firm. It helps an organization decide how the authority passes on, how message communication happens. Line Organisational Structure: Start Download - View PDF Convert From Doc to PDF, PDF to Doc Simply With The Free Online App! Decision Sciences & Innovation Department, Functional Authority Organisational Structure. (ii) Reduces the degree of predictability and control. Full and free communication is essential among those working on the project. The official reporting relationships are clearly known to every manager. The staff officers or managers have staff authority (i.e., authority to advice the line) over the line. When the project has been completed, this task force is dissolved and personnel are returned to their regular organization units. There may be conflict between the project manager and the departmental manager on the issue of exercising authority over team members. For example the accounting activities of different operations are grouped in on accounting department. Some common organizational types are: Some of the common types of organisational structure are given below: 1. In the line organisation, the line managers cannot be experts in all the functions they are required to perform. (iii) Co-ordination between line and staff may become difficult. (iii) Work is complex having independent activities and specialized skills are necessary for accomplishment. Nature and Characteristics of Organisation Structure 3. Alongside the formal organisation exists are informal organisation which is a set of evolving relationships and patterns of human interaction within an organisation that are not officially prescribed. Course Hero, Inc. The levels of responsibility and authority are likely to be precise and understandable. (ii) Helps to remove weakness in the formal structure. 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). It is a permanent organisation designed to achieve specific results by using teams of specialists from different functional areas in the organisation. 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.). Exhibit 10.9 (b) illustrates a combination structure. 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. 8 Types of Organisational Structures: their Advantages and Disadvantages. It simply states who works for who. Project organization structure is found in industries with highly complex product systems, such as the aerospace or weapon industry. Exhibit 10.5 illustrates the line and staff organisational chart. 1. Prohibited Content 3. 7. 3. The formal organisation in usually delineated by an organizational chart and job descriptions. 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. (iii) Relieves line authorities of routine and specialized decisions. 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. (iv) Increases the time required to complete activities. Line and Staff Organisational Structure. 2. Divisional structure prevents organizations from getting the most out of economies of scale. The functional managers may lose some of their authority because product managers are given the budgets to purchase internal resources. Exhibit 10.4 illustrates a staff or functional authority organisational structure. Excessive focus on internal relations. Report a Violation, Formal and Informal Organization: Features, Advantages and Disadvantages, Functional Organization: Advantages and Disadvantages, Market Types: 4 Important Types of Market (A Study), 2. (ii) Improved speed and flexibility may not offset the lack of specialized knowledge. 2. The authority over the project team members is shared by project manager and the respective functional managers in the permanent organisation. The advantage of functional structure is that the different functional units of th… In some projects (complex activity consisting of a number of interdependent and independent activities) work process may flow horizontally, diagonally, upwards and downwards. 1. All managers must bear that there are two organisations they must deal with-one formal and the other informal. Line and staff have direct vertical relationship between different levels. These organisations have direct, vertical relationships between different levels and also specialists responsible for advising and assisting line managers. The primary advantage is the use of expertise of staff specialists by the line personnel. Group action may lead to compromise and indecision. Committee decisions are better than individual decisions, 2. 3. 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 Before publishing your articles on this site, please read the following pages: 1. An informal organisation is the set of evolving relationships and patterns of human interaction within an organisation which are not officially presented. Privacy Policy 8. The official reporting relationships are clearly known to every manager. Conflicts between corporate departments and units. 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