This is appropriate for a large corporation with many product lines in several related industries

08 Mar 2011

in Basic Organizational Structures Tags: among, appropriate, area, assemblage, attempt, authority, basic, basis, business, category, characteristic, company, competitor, complex, compose, conglomerate, control, corporate, corporation, create, current, decentralize, decide, depict, division, divisional, dominate, element, employee, entrepreneur, external, feasible, finance, firm, focus, form, function, functional, gain, general, generalist, holding, horizontal, Human, idea, identifiable, independent, industry, infinite, jack, legal, level, line, linkage, management, manufacturing, market, Marketing, medium, Mission, modern, modification, nature, Niche, operate, Organization, organize, predominate, prevent, previous, primary, Product, propose, reasonable, recent, relate, Resource, responsibility, SBU, segment, separate, several, size, small, span, speak, specialist, strategic, strategy, Structure, subsidiary, support, synergy, tend, top, trade, type, typical, umbrella, unique, unit, unrelated, variant, variety

Although there is an almost infinite variety of structural forms, certain basic types predominate in modern complex organizations. There are three basic organizational structures. The conglomerate structure is a variant of divisional structure and is thus not depicted as a fourth structure. Generally speaking, each structure tends to support some corporate strategies over others.

• Simple Structure has no functional or product categories and is appropriate for a small, entrepreneur-dominated company with one or two product lines that operates in a reasonably small, easily identifiable market niche. Employees tend to be generalists and jacks of all trades.
• Functional structure is appropriate for a medium-sized firm with several related product lines in one industry. Employees tend to be specialists in the business functions important to that industry, such as manufacturing, marketing, finance, and human resources.
• Divisional structure is appropriate for a large corporation with many product lines in several related industries. Employees tend to be functional specialists organized.
• Strategic business units (SBU)are a recent modification to the divisional structure. Strategic business units are divisions or groups of divisions composed of independent product-market segments that are given primary responsibility and authority for the management of their own functional areas. An SBU may be of any size or level, but it must have 1) a unique mission, 2) identifiable competitors, 3)an external market focus, and 4) control of its business functions. The idea is to decentralize on the basis of strategic elements rather than on the basis of size, product characteristics, or span of control and to create horizontal linkages among units previously kept separate.
• Conglomerate structure is appropriate for a large corporation with many product lines in several unrelated industries. A variant of the divisional structure, the conglomerate structure (sometimes called a holding company) is typically an assemblage of legally independent firms (subsidiaries) operating under one corporate umbrella but controlled through the subsidiaries’ boards of directors. The unrelated nature of the subsidiaries prevents any attempt at gaining synergy among them.

If the current basic structure of corporation does not easily support a strategy under consideration, top management must decide if the proposed strategy is feasible or if the structure should be changed to a more advanced structure.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Basic Organizational Structures

08 Mar 2011

in Basic Organizational Structures Tags: among, appropriate, area, assemblage, attempt, authority, basic, basis, business, category, characteristic, company, competitor, complex, compose, conglomerate, control, corporate, corporation, create, current, decentralize, decide, depict, division, divisional, dominate, element, employee, entrepreneur, external, feasible, finance, firm, focus, form, function, functional, gain, general, generalist, holding, horizontal, Human, idea, identifiable, independent, industry, infinite, jack, legal, level, line, linkage, management, manufacturing, market, Marketing, medium, Mission, modern, modification, nature, Niche, operate, Organization, organize, predominate, prevent, previous, primary, Product, propose, reasonable, recent, relate, Resource, responsibility, SBU, segment, separate, several, size, small, span, speak, specialist, strategic, strategy, Structure, subsidiary, support, synergy, tend, top, trade, type, typical, umbrella, unique, unit, unrelated, variant, variety

Although there is an almost infinite variety of structural forms, certain basic types predominate in modern complex organizations. There are three basic organizational structures. The conglomerate structure is a variant of divisional structure and is thus not depicted as a fourth structure. Generally speaking, each structure tends to support some corporate strategies over others.

• Simple Structure has no functional or product categories and is appropriate for a small, entrepreneur-dominated company with one or two product lines that operates in a reasonably small, easily identifiable market niche. Employees tend to be generalists and jacks of all trades.
• Functional structure is appropriate for a medium-sized firm with several related product lines in one industry. Employees tend to be specialists in the business functions important to that industry, such as manufacturing, marketing, finance, and human resources.
• Divisional structure is appropriate for a large corporation with many product lines in several related industries. Employees tend to be functional specialists organized.
• Strategic business units (SBU)are a recent modification to the divisional structure. Strategic business units are divisions or groups of divisions composed of independent product-market segments that are given primary responsibility and authority for the management of their own functional areas. An SBU may be of any size or level, but it must have 1) a unique mission, 2) identifiable competitors, 3)an external market focus, and 4) control of its business functions. The idea is to decentralize on the basis of strategic elements rather than on the basis of size, product characteristics, or span of control and to create horizontal linkages among units previously kept separate.
• Conglomerate structure is appropriate for a large corporation with many product lines in several unrelated industries. A variant of the divisional structure, the conglomerate structure (sometimes called a holding company) is typically an assemblage of legally independent firms (subsidiaries) operating under one corporate umbrella but controlled through the subsidiaries’ boards of directors. The unrelated nature of the subsidiaries prevents any attempt at gaining synergy among them.

If the current basic structure of corporation does not easily support a strategy under consideration, top management must decide if the proposed strategy is feasible or if the structure should be changed to a more advanced structure.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Learning by Objectives

05 Mar 2010

by Asif J. Mir in Learning by Objectives Tags: acquire, afford, agreement, already, Analysis, ask, business, career, chance, company, decide, decision, Development, down, effort, eliminate, employee, engage, evolve, formal, get, high-tech, involve, known, learning, management, manager, managerial, MBO, month, need, negotiate, objective, outcome, own, period, professional, question, quickly, reduce, review, shape, Sit, Skill, subordinate, system, teaching, technical, trainee, Training, understand, undertake, usually, variant, vehicle, waste, written, year

Companies in high-tech businesses have evolved a variant of management by objectives as the vehicle for involving technical, professional, and managerial employees in the analysis of their own training and development needs. Usually, as part of a formal MBO system, manager and employee sit down together and negotiate a written agreement on the technical and professional training the subordinate will undertake in the coming six months or a year. At the end of the period they review the outcome and decide what further training is called for. Both of them understand that the subordinate’s career will be shaped by these decisions.

Trainees’ involvement in needs analysis reduces wasted effort by eliminating the teaching of what is already known, by getting quickly to questions that engage the trainees, and by affording them a chance to ask questions that help them acquire skills.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

What is appropriate for a large corporation with many product lines in several related industries?

What is defined as the process of identifying and choosing alternative courses of action in a manner appropriate to the demands of the situations?

Where the engineer undertakes the activity of turning a product concept to a finished physical item?

What is the process of determining the contribution that sub units can make with allocated resources?