Management structures. Unit 3: Economics

Transcription

1 Management structures Unit 3: Economics

2 Agenda 1. Simple structure 2. Geographical 3. Functional 4. Divisional Structure 5. The Matrix Structure

3 Management Structures Management structures (also known as organisational structures) outline the way a large-scale organisations (LSO) is organised in terms of its management hierarchy. Structures are important because they allow stake holders to know: The way that communication flows within an organisation The possibility of career paths The hierarchy of positions within the organisation

4 Simple Structure The simple structure shows the most basic layout in an organisation as there are only two layers Workers/employees not in managerial positions

5 Geographic Structure Geographic structures represent those where the business is conducted in several different locations. These may be in different towns or cities., different states or even different countries. Usually one city would house the head office of the LSO. Each location would have functionality, divisional or some other type of structure, depending on the size and the needs of the organisation. London Office/branch Melbourne Office/Branch Athens Office/Branch Paris Office/Branch Each geographic branch would have its own structure, perhaps functional, divisional, matrix or organic

6 Simple Structure Suits Difficulties Positive The simplicity of the arrangement means that the manager or owner has close contact with employees There are few avenues for communication blockages or barriers as there are only two levels to communicate between The manager/owner would need to have fairly wide levels of knowledge or ability in different functional areas No career path options for employees, other than the top job! The simple Structure best suits a small or micro business, where there are few employees.

7 Geographic structure Suits Difficulties Positive Geographic structures allow LSO access to wider markets Local Issues/laws can be better handled if there a branch in the local area Employees may have the opportunity to work or to train in other countries This structure allows the LSO to implement the Follow the Sun method, whereby a large project is passes around the world as each countries starts its working day according to time zone. Different languages can cause communication problems between the branches Time can be wasted as senior managers may have to travel between branches Control can be lost or diminished as senior managers cannot be in every location all the time. The geographic structure best suits multi-national and larger organisations

8 The Matrix Structure The matrix structure consist of a team approach to separate projects. The basic Functional Structure is still there, but representatives from each functional area oversea their concerns with each project that is operating at one time. For example, if the functional if the diagram we just saw on the following slide, represented a large building firm, each projects could relate to different buildings. One may be a multi-storey apartment building, another may be a hospital and the third may be an office block. For each building, another may be a manager in charge of human resources (staffing, payroll etc), a manager in charge allocated to the correct areas) and an operations manager (looking after the production side of things and dealing with suppliers.

9 Functional structure Suits Difficulties Positive There is a specialist in charge of each functional area. Their expertise should ensure high productivity and cutting edge work places in those areas. Workers have a manager in their own area, so issues should be able to be resolved within a functional area. Some LSO s allow sideways career paths, whereby employees can gain experience in a number of functional areas before settling down to the one they like best. The structure only works if the different functional managers communicate with each other. There is no point in the Human Resources recruiting several new employees if there is not the money available to pay them The Functional Structure best suits medium to large organisations

10 Divisional structure Suits Difficulties Positive There are specialist in charge of small sections of the organisation, allowing for the best practice (a method of comparing performance of one organisation against the leading firms and taking on board their practices) in these areas. There is room for career advancement within one functional area. With more complicated structure, the chances of difficulties in communications become more pronounced. This structure only works well if clear communication channels are established between functional areas. The Divisional structure is really only suitable for quite a large scale organisation. If the business is too small, it may end up with too many middle managers- with no employees to manage.

11 The Matrix Structure Suits Difficulties Positive Control is decentralized, ensuring better monitoring of all aspects of a job. There can be many opportunities for both horizontal and vertical career directions Because of the complexity of this structure, communication can become difficult between projects and the head office. There may be staffing issues when one project finishes if there is not another to begin immediately LSO s that work on several different projects at once, or do work for different clients at the same time. The large building firm would fit this description, as would a large advertising agency working on campaigns for several large clients at the one time, or a movie studio making a few different films at the same time.

12 Functional Structure The Functional Structure is one where the organisation is split up according to the function or work performed by the people in that area. s are assigned to ensure the smooth running of that section. The number of managers depends on the size and the nature of the LSO. In the diagram below, there are only 3 Functional s, but there could be any number, perhaps performing roles such as Sales, Research and development (R & D), Administration etc. Functional Structures can be at one location, or in several in the case of geographic structures. Senior management Board of Directors CEO,MD Human Resource Operations Finance

13 Divisional Structure The Divisional Structure had the same foundation as the Functional, but it takes it one step further. Each functional area is further divided into subsections, with a manager in charge of these. Once again, the diagram below only uses 3 basic functional areas, but any number could have been used to illustrate this model. Senior management Board of Directors CEO,MD Human Resource Operations Finance Training Payroll Recruit Logistics Production Quality Purchasing Accounts

14 The Matrix Structure HR TEXT Finance TEXT Operations Project A HR A Finance A Operations A Project B HR B Finance B Operations B Project C HRC Finance C Operations C