Structure of organisations
Organisations are structured in radically different ways ranging
from relatively fixed structures with positions, rules, and established
chains of communication to dynamic structures in which people belong to
teams that are continually being formed and reformed for the duration of
a project.
Typical ways of organising people are:
1. By function -
dividing the organisation up into groups with similar specialisms e.g.
marketing, finance and accounts, human resources, etc.
2. By product -
grouping people together according to the product they make. For
example, BIC has three main divisions - pens, lighters, and razors.
3.
By process - grouping people together according to the processes that
they are carrying out. For example retailing organisations like Argos
and Travis Perkins will group employees according to whether they are
involved in packing and display or customer service.
4. By
geographical area - most large companies are widely dispersed. Companies
like BIC, Gillette, Kellogg's, etc have European and North American
divisions.
A further way of organising organisations, which is very
popular today, is in a matrix pattern. A matrix is often two dimensional
but can have more dimensions. In a matrix system an employee can be in
two or more structures at the same time - e.g. a team in lighter
production, and a team in marketing at the same time. Matrix structures
allow considerable flexibility because employees can shift to different
teams within the overall matrix structure.
Organisations can also be
highly centralised or largely decentralised. In a highly centralised
structure control will be tight from the centre or Head Office of the
organisation. In contrast, in a decentralised organisation power will be
passed down to the various project managers and teams.
Organisation and control
People are organised in different ways in different organisations depending on factors such as:
- the size of the organisation
- culture of the organisation (typical pattern of doing things in the organisation)
- nature of the industry
- managers preferred structures etc.
A basic distinction can be made between tall hierarchical organisations, and flatter teamwork structured organisations.
A tall organisation will have several layers of command:
In
contrast team structures will be based on cells of team members working
together, often belonging to several project teams which form and
reform as projects start and finish.
The term span of control is the
number of people that an individual manages or controls. In tall
hierarchical organisations an individual employee may have a wide span
of control. In contrast in a teamwork structure the span of control may
be narrow or may not exist at all.
