In designing a structure to support the efficient and effective accomplishment of organization goals, managers may choose to follow more traditional organizational organizational designs. The design are including functional, divisional, product, geographical, process and customer. A functional structure is an organizational design that group similar or related occupational specialties together. It’s functional approach to departmentalization applied to the entire organization. Functional departmentalization can be used in all types of organization.
Only the functions different follow the organization’s objectives and activities. For examples, a hosplital may have departments to research, patient care, accounting and so forth. The functional structure have cost – saving advantages from specialization (economies of scale, minimal duplication of people and equipment) and employees are grouped with other who have similar tasks. The weaknesses for this structure is pursuit of functional goals can cause manager to lose sight of what’s best for overall organization. Functional specialists become insulated and have litle understanding of what other units are doing.
Besides, the employess have no chance to know about the other’s unit activities. This can cause the problem of standardization and integration between units. Functional units are effective when the organization has only few products or is small in size; the drawback of limited view of the entire organization gets negligible. The divisional structure is an organizational structure made up of separate business unit or divisions. In this design, each unit or division has limited autonomy with a division manager responsible for performance and who have strategic and operational authority over the unit.
In divisional structure, the parent corporation typically acts as an external overseer to coordinate and control the various division and it often provides support services such as financial and legal. Examples for division structure is the CIMB bank which have the CIMB investment, consumer banking and Islamic banking. The advantages of divisional is it’s focuse on results. Division manager are responsible for what happens to their product or services. The weakness of division is dupplication of activities and resources increases cists and reduce efficiency.
Product divisional always used by the company that produce or selling variety of product. Each major product area in the corporationis placed under the authority of an executive who is a specialist in, and responsible for everthing in his or her line. Each division has its own set of functional units like research, manufacturing, marketing etc and is completely self-contained. A divisional structure is less hierarchical than functional. It is formed by decomposing the functional structure along the product lines. Using this way, it can increase the skill and knowledge of the product or service.
Examples for the company that used product departmentalization is Sony. It’s divided into television, camera, electrical product, computer and peripheral and etc. Structuring along the product lines provides clear correlation between the expense and profit of the individual divisions. The business objectives of the division can be formulated more objectively and the expectations can be better agreed. Another way to departmentalize is followed the geography or teritorry. It is called as geographical departmentalization. This is used by the organization which operated or having a wide market all over the country.
The activities in a one area will be controlled by a manger to coordinates and fullfill the customer needs and wants. An organization’s sales functions might have western, southern, and eastern regions. If an organization’s customers are scattered over a large geographical area, this form of departmentalization can be valuable. This kind of departmentalization can be difficult to controled by the headquarters because the activities is scattered and far from the headquarters. The others form of departmentalization is process departmentalization.
For examples the production department of alumunum plant. Each department specialize in one specific phase or process in the production of aluminium tubing. The metal is cast in huge furnaces sent to the department of where it is extruded into aluminum pipe. It’s then transferred to the tube mill where it is streched into various sizes and shapes of tubing. After that it moved to finishing where it cut and cleaned and finally arrives in the inspect, pack and ship department. This form of departmentilization focuses on the work processes and can be used for processing customer as well as products.
The final form of departmentalization is customer departmantilization. This form of departmentalization can be used if there is necessary to fullfill the different kind of request from the customer. For example the organization can divide their marketing department into industrial market, government market and consumer market. Modern Trends Managers in modern organizations are finding that these traditional hierarchical designs are often aren’t appropriate for the increasingy dynamic and complex environments that they faced.
There are some of the newest consepts in organizational designs. The first design in modern trends is the shorter chain of command. This is the line of authority that links all persons with successively higher levels of management. The seconds design is less unity of command. This is when each person in an organization should report to one and only one supervisor. The objective of this principle is to ensure that subordinates do not receive work directions from more than one source. Cross-functional teams, task forces, and matrix structures are seriously challenging this principle.
The next design in modern trends is wider spans of control. This kind of design increased numbers of people reporting directly to a manager. Many organizations are shifting to wider spans of control as levels of management are eliminated. Managers have responsibility for a larger number of subordinates who operate with less direct supervision. In modern trends of organizing, there is a design that more delegation and empowerment. Delegation is the process of entrusting work to others by giving them the right to make decisions and take action.
The manager assigns responsibility, grants authority to act, and creates accountability. Authority should be commensurate with responsibility. The last design of the modern trends in organizing is decentralization with centralization. Centralization is the concentration of authority for making most decisions at the top levels of the organization. Decentralization is the dispersion of authority to make decisions throughout all levels of the organization. Centralization and decentralization not an “either/or” choice. Delegation, empowerment, and horizontal structures contribute to more decentralization in organizations. Advances in information technology allow for the retention of centralized control.
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