lect-9-OrganisationStructure.pptVIP

* Product departmentalization involves the grouping of all activities necessary to manufacture a product or product line. Preferred for product expansion diversification when manufacturing marketing characteristics of each product are of primary concern. Used when the product is relatively complex a great deal of capital is required for plant and facilities. Each product division contains the functions necessary to that service the specific goods or services it produces CEO Func. Managers Sales Design Production Manufacturing Manufacturing Manufacturing = Product Team Manager = Team member Advantages Coordination within product lines made easier More adaptable to changes in environment (e.g., can shut down a division when a product is no longer selling) Responsibility for failures, successes identifiable Competition across divisions can serve as a motivator Disadvantages Redundancy of functions across divisions (e.g., marketing, RD) Competition for resources, power Lack of development of expertise in functional areas FLAT STRUCTURE reduces the levels of management. Widens span of control of management at various levels of organisation. More decentralized with regard to decision-making ADVANTAGES: More delegation of authority More clear policy Development of managers for higher positions because of their initiative authority to make decisions. DISADVANTAGES: Tendency of overloaded superior to become bottlenecks in decision making Requirement of highly trained managerial personnel. Tall structures have many levels of authority relative to the organization’s size. As levels in the hierarchy increase, communication gets difficult. The extra levels result in more time being taken to implement decisions. Communications can also become garbled as it is repeated through the firm. Flat structures have few levels but wide spans of control. Results in quick communications but can lead to overworked managers. Narrow span of control Large number of ma