The stages of management process

(organizational structure)

THE SENIOR TEACHER OF

" S Y S T E M A N A LY S I S A N D
M AT H M O D E L I N G “ D E PA R T M E N T
K A S I M O VA N . D J .
 Outline
Organizational structure
The concepts of "delegation",
"responsibility", "authority"
Linear organizational structure
Functional organizational structure
Linear functional organizational
structure
Line- staff organizational structure
Matrix, project-based, product-based
organizational structures
ORGANIZATION (AS A FUNCTION)
It is the process of creating an enterprise structure that enables
people to work together effectively to achieve goals.
The organizational structure of management is understood as an
ordered set of stably interconnected elements that ensure the
functioning and development of the organization as a whole.
The tasks of forming the
organizational structure are:
Resource allocation
Formation of a management chain (power structure)
Choosing a decision-making system (centralization and
decentralization)
Selection of coordination mechanisms for joint
activities
 DELEGATION

in management theory means the transfer of tasks

and powers to a person who takes responsibility
for their implementation.
 RESPONSIBILITY
represents a commitment to fulfill the tasks at hand
and to be responsible for their satisfactory resolution.
 AUTHORITY
represent a limited right to use the resources of an
organization and direct the efforts of some of its
employees to accomplish certain tasks.
 Scalar chain (chain of command)
Delegating line authority
creates a hierarchy of the
management. The process
of creating a hierarchy is
called a scalar process (the
result of building a
hierarchy is a scalar chain
(chain of commands)).
 Linear organizational structure
The structure under which
management influences include
administrative functions
(organization) and procedures
(decision making). These
influences build linear
connections.
 Linear organizational structure
Advantages: ease of Disadvantages: effective
construction; full personal for small organizations; the
responsibility for the complexity of the
results of work coordination of production
and management
processes; the need for
breadth of knowledge and
experience of the leader
 Functional organizational structure
A structure in which
management actions are divided
into linear and functional (both
are mandatory). In this structure,
the general manager and heads
of departments divide their
influence on the performers by
function.
 Functional organizational structure
Advantages: attraction of Disadvantages: violation of the
specialists competent in a principle of one-man
particular field to the management; impersonal
leadership; efficiency in solving responsibility; the difficulty of
non-standard situations; rapid coordinating the activities of all
growth of professionalism of departments
functional leaders
 Linear- functional organizational
structure
The structure, in which the
management impacts are divided
into linear - mandatory for
execution, functional
(technological assistance) -
recommendatory for execution.
 Linear- functional organizational structure
Advantages: attracting more Disadvantages: difficulty in
competent specialists in a coordinating the activities of
particular field in the all departments; big
management; efficiency in workload for the leader in
solving non-standard situations; solving operational issues of
the growth of professionalism production and
among the functional management
management, personal
responsibility for the results of
work
 Line- staff organizational structure

A structure that assumes

the formation of specialized
functional departments to
help line managers - staff for
solving problems (analytical,
coordinating,
recommendatory, special).
 Line- staff organizational structure
Advantages: involving Disadvantages:
highly qualified personnel, lengthening the decision-
high quality solutions, making process, the
increasing the ability to possibility of inconsistent
quickly resolve non- activities of individual staff
standard situations units
 Matrix organizational structure

A structure that combines vertical

linear and functional control
connections with horizontal ones.
Aims at the mutual consistency of
all departments of the organization
to achieve the goals of various
projects.
 Matrix organizational structure
Advantages: creates the Disadvantages: creating of
prerequisites for the most double subordination
qualified performance of relations, the control
individual functions, mechanism becomes more
simplifies the coordination complicated, there is a
of work danger of conflicting
situations
 Project-based organizational structures

A structure aimed at ensuring

effective management of the
parallel execution of a number
of large projects or works at
enterprises (has a temporary
nature).
Main advantage: concentration
of efforts on solving one
problem
 Product -based organizational structure
Modification of the hierarchical
scheme of the management
structure, in which functions
are segregated in the
production organizational
structure for a separate
manufactured product
(departments are created for a
separate main product).
 Product -based organizational structure

Advantages: improving the Disadvantages: increasing

product quality; increasing the costs due to
the personal responsibility duplication of the same
of managers and work for different types of
employees products
Criteria Product Structure Project Structure
Focus Long-term product development Execution of temporary projects
Management Decentralized, each product has Centralized or matrix-based,
Structure its own leadership managed by project managers

Flexibility Moderate – processes are High – teams are formed for

standardized but allow specific tasks
autonomy
Resource Allocation Assigned to products, may lead Flexibly redistributed between
to duplication projects

Team Duration Permanent teams working on Temporary teams disbanded after

products project completion

Costs Higher due to function Optimized, resources are used as

duplication needed

Company Examples Apple, Procter & Gamble, IT outsourcing, consulting

Samsung (Accenture, McKinsey),
construction
 Network organizational
structure
A network structure is a special type of
organization in which departments
(network nodes) enjoy broad autonomy
and establish cooperative relationships
(network relationships) among
themselves, all of which is flexibly
coordinated by the company's overall
management. A network structure is
especially suitable for companies that are
included in an ecosystem; it is an
organizational structure consisting of an
internal network of autonomous
departments and an external network of
partners.
 Advantages & Disadvantages of Network
Organizational Structure
Criteria Advantages Disadvantages

Easily adapts to market changes Complex coordination

Flexibility
and scales quickly between multiple partners

Reduces internal costs by Hidden or unpredictable

Cost Efficiency
outsourcing non-core functions costs in external contracts

Allows the company to specialize Loss of in-house expertise

Core Competency Focus
in its strengths for outsourced functions

Shares risks among network High reliance on third-party

Dependency Risks
participants reliability and security

The organization is no longer a stable object, but a simple attribute of a complex

interactive process between moving entities that sometimes cooperate with and
sometimes compete with each other.
Apple structure
AMAZON STRUCTURE FACEBOOK STRUCTURE