Types of Organisation Structure:
1.
Line Organisation
2.
Line and Staff organisation
3.
Functional Organisation
4.
Committee organisation
5.
project organisation
6.
matrix organisation
Line Organisational
Structure:
A line organisation has only direct, vertical relationships
between different levels in the firm. There are only line
departments-departments directly involved in accomplishing the primary goal of
the organisation. For example, in a typical firm, line departments include
production and marketing. In a line organisation authority follows the chain of
command.
Has only direct vertical
relationships between different levels in the firm.
Advantages:
1. Tends to simplify and clarify
authority, responsibility and accountability relationships
2. Promotes fast decision making
3. Simple to understand.
1. Neglects specialists in
planning
2. Overloads key persons.
Some of the advantages of a pure
line organisation are:
(i) A line structure tends to
simplify and clarify responsibility, authority and accountability
relationships. The levels of responsibility and authority are likely to be
precise and understandable.
(iii) Because line organisations
are usually small, managements and employees have greater closeness.
However, there are some
disadvantages also. They are:
(i) As the firm grows larger,
line organisation becomes more ineffective.
(ii) Improved speed and
flexibility may not offset the lack of specialized knowledge.
(iii) Managers may have to become
experts in too many fields.
(iv) There is a tendency to become overly dependent
on the few key people who an perform numerous jobs.
Line and Staff
Organisational Structure:
Most large organisations belong
to this type of organisational structure. These organisations have direct,
vertical relationships between different levels and also specialists
responsible for advising and assisting line managers. Such organisations have
both line and staff departments. Staff departments provide line people with
advice and assistance in specialized areas (for example, quality control
advising production department).
The line functions are production
and marketing whereas the staff functions include personnel, quality control,
research and development, finance, accounting etc. The staff authority of
functional authority organisational structure is replaced by staff
responsibility so that the principle of unity of command is not violated.
Three types of specialized staffs
can be identified:
(i) Advising,
(ii) Service and
(iii) Control.
Some staffs perform only one of
these functions but some may perform two or all the three functions. The
primary advantage is the use of expertise of staff specialists by the line
personnel. The span of control of line managers can be increased because they
are relieved of many functions which the staff people perform to assist the
line.
Some advantages are:
(i) Even through a line and staff
structure allows higher flexibility and specialization it may create conflict
between line and staff personnel.
(ii) Line managers may not like
staff personnel telling them what to do and how to do it even though they
recognize the specialists’ knowledge and expertise.
(iii) Some staff people have
difficulty adjusting to the role, especially when line managers are reluctant
to accept advice.
(iv) Staff people may resent
their lack of authority and this may cause line and staff conflict.
Features:
1. Line and staff have direct
vertical relationship between different levels.
2. Staff specialists are
responsible for advising and assisting line managers/officers in specialized
areas.
3. These types of specialized
staff are (a) Advisory, (b) Service, (c) Control e.g.,
(a) Advisory:
Management information system,
Operation Research and Quantitative Techniques, Industrial Engineering,
Planning etc
(b) Service:
Maintenance, Purchase, Stores,
Finance, Marketing.
(c) Control:
Quality control, Cost control,
Auditing etc. Advantages’
(i) Use of expertise of staff
specialists.
(ii) Span of control can be
increased
(iii) Relieves line authorities
of routine and specialized decisions.
(iv) No need for all round
executives.
Disadvantages:
(i) Conflict between line and
staff may still arise.
(ii) Staff officers may resent
their lack of authority.
(iii) Co-ordination between line
and staff may become difficult.
Committee Organisational Structure Features:
(a) Formed for managing certain
problems/situations
(b) Are temporary decisions.
Advantages:
1. Committee decisions are better
than individual decisions
2. Better interaction between
committee members leads to better co-ordination of activities
3. Committee members can be
motivated to participate in group decision making.
4. Group discussion may lead to
creative thinking.
Disadvantages:
1. Committees may delay
decisions, consume more time and hence more expensive.
2. Group action may lead to
compromise and indecision.
3. ‘Buck passing’ may result.
Divisional Organisational Structure:
In this type of structure, the
organisation can have different basis on which departments are formed. They
are:
(i) Function,
(ii) Product,
(iii) Geographic territory,
(iv) Project and
(iv)
Combination approach
Project Organisational Structure:
The line, line and staff and
functional authority organisational structures facilitate establishment and
distribution of authority for vertical coordination and control rather than
horizontal relationships. In some projects (complex activity consisting of a
number of interdependent and independent activities) work process may flow
horizontally, diagonally, upwards and downwards. The direction of work flow
depends on the distribution of talents and abilities in the organisation and
the need to apply them to the problem that exists. The cope up with such
situations, project organisations and matrix organisations have emerged.
A project organisation is a
temporary organisation designed to achieve specific results by using teams of
specialists from different functional areas in the organisation. The project
team focuses all its energies, resources and results on the assigned project.
Once the project has been completed, the team members from various cross
functional departments may go back to their previous positions or may be
assigned to a new project. Some of the examples of projects are: research and
development projects, product development, construction of a new plant, housing
complex, shopping complex, bridge etc.
Feature:
Temporary organisation designed
to achieve specific results by using teams of specialists from different
functional areas in the organisation.
Importance of Project
Organisational Structure:
Project organisational structure
is most valuable when:
(i) Work is defined by a specific
goal and target date for completion.
(ii) Work is unique and
unfamiliar to the organisation.
(iii) Work is complex having
independent activities and specialized skills are necessary for accomplishment.
(iv) Work is critical in terms of
possible gains or losses.
(v) Work is not repetitive in
nature.
Characteristics of project organisation:
1. Personnel are assigned to a
project from the existing permanent organisation and are under the direction
and control of the project manager.
2. The project manager specifies
what effort is needed and when work will be performed whereas the concerned
department manager executes the work using his resources.
3. The project manager gets the
needed support from production, quality control, engineering etc. for
completion of the project.
4. The authority over the project
team members is shared by project manager and the respective functional
managers in the permanent organisation.
5. The services of the
specialists (project team members) are temporarily loaned to the project
manager till the completion of the project.
6. There may be conflict between
the project manager and the departmental manager on the issue of exercising
authority over team members.
7. Since authority relationships
are overlapping with possibilities of conflicts, informal relationships between
project manager and departmental managers (functional managers) become more
important than formal prescription of authority.
8.
Full and free communication is essential among those working on the project.
Matrix Organisational Structure:
It is a permanent organisation
designed to achieve specific results by using teams of specialists from
different functional areas in the organisation. The matrix organisation is
illustrated in Exhibit 10.8.
Feature:
Superimposes a horizontal set of divisions and
reporting relationships onto a hierarchical functional structure
Advantages:
1. Decentralised decision making.
2. Strong product/project
co-ordination.
3. Improved environmental
monitoring.
4. Fast response to change.
5. Flexible use of resources.
6. Efficient use of support systems.
