9

Creating Effective
Organizational Designs
Dr Md Moazzam
Husain
 10 - 2

Traditional Forms of
Organizational Structure
Organizational structure refers to formalized patterns
of linking interactions

Structure provides a means of balancing two

conflicting forces

- Need for the division of tasks into meaningful groupings

- Need to integrate the groupings for efficiency and

effectiveness
Dr Md Moazzam
Husain
 10 - 3

Simple Structure

Simple structure is the oldest and most common

organizational form

- Direct supervision of all tasks

- Decision making is highly centralized

Dr Md Moazzam
Husain
 10 - 4

Functional Structure

Functional Structure is found where there is a single or closely

related product or service, high production volume, and some
vertical integration

Advantages? Disadvantages?
Adapted from Exhibit 10.2 Functional Organizational Structure
Dr Md Moazzam
Husain
 10 - 5

Dominant Growth Patterns

of Large Corporations

Adapted from Exhibit 10.1 Dominant Growth Patterns of Large Corporations

Source: Adapted from J. R. Galbraith and R. K. Kazanjian, Strategy Implementation: The Role
of Structure and Process, 2nd ed. (St. Paul, MN: West Publishing Company, 1986), p. 139. Dr Md Moazzam
Husain
 10 - 6

Divisional Structure

Organized around
products, projects, or
markets

Divisions are relatively autonomous and

consist of products and services that are
different from those of other divisions
Adapted from Exhibit 10.3 Divisional Organizational Structure Dr Md Moazzam
Husain
 10 - 7

Divisional Structure

What are some advantages of the divisional structure?

What are some disadvantages of the divisional

structure?

Dr Md Moazzam
Husain
 10 - 8

Divisional Structure
Strategic business unit (SBU) structure

Divisions with similar products, markets, and/or technologies

are grouped into homogenous SBUs

Appropriate when the businesses in a corporations portfolio

do not have much in common

Dr Md Moazzam
Husain
 10 - 9

Matrix Structure

Adapted from Exhibit 10.4 Matrix Organizational Structure

Dr Md Moazzam
Husain
 10 - 10

Matrix Structure

A combination of the functional and divisional

structures

Individuals who work in a matrix organization become

responsible to two managers

Some advantages and disadvantages of matrix

structure?
Dr Md Moazzam
Husain
 10 - 11

Boundaryless Organizational Designs

Boundaries that place limits on organizations

Barrier-free type
of organization
Permeable internal boundaries

Dr Md Moazzam
Husain
 10 - 13

Boundaryless Organizational Designs

Boundaries that place limits on organizations

Barrier-free type
of organization Permeable internal boundaries

Modular type of
Outsources non-vital functions organization

Dr Md Moazzam
Husain
 10 - 15

Boundaryless Organizational Designs

Boundaries that place limits on organizations

Barrier-free type
of organization Permeable internal boundaries

Modular type of
Outsources non-vital functions organization

Virtual type of Continually evolving network of

organization independent companies linked together

Dr Md Moazzam
Husain
 10 - 17

Boundaryless Organizations:
Making Them Work

What are some factors facilitating effective

coordination and integration of boundaryless
structures?

Dr Md Moazzam
Husain
 10 - 18

Other

Two contradictory challenges faced by firms

- Adaptability
- Alignment

International Organizations
- Strategy
- Product Diversity
- % Foreign Sales

Dr Md Moazzam
Husain