Traditional Organizational Structures:
Traditional organizational structures, which still prevail today, were structured along functional or divisional lines.
Functional Structure: People who perform similar activities are placed together in formal units and thus the organization is subdivided in accordance with the functions of the enterprise.
Disadvantages of a functional structure include:
a. Poor coordination of effort across functions - with many decisions referred up the corporate hierarchy
b. Lack of clear responsibility for the overall product or service
c. General slowdown in innovation necessary to respond to the rapidly changing competitive environment of today.
Divisional Structure: Company divisions are formed based on the groups of products or services they deliver, geographic regions they cover, or customer segments they serve. Figure 1.3(b) presents a company with a divisional structure.
Advantages of a divisional structure include:
a. Greater flexibility in responding to the competitive demands of the marketplace.
Disadvantages:
a. They often suffer from duplicating resources and efforts across divisions and from less developed functional expertise.
The traditional organizational structures are:
a. Defined by clear and long-term assignment of roles to employees, clear lines of responsibility and command, clear setting of the boundaries of the firm against the environment.
b. Stability is the hallmark.
c. Multilayered organization charts define the long-lasting hierarchical structure of an organization.
General drawbacks to the traditional organizational structure include:
a. Relative permanence and rigidity of both functional and divisional structures often lead to a lack of coordination across the corporation's units and to units pursuing their own, as opposed to organizational goals.
b. Multiple layers of management separate the line workers from the top managers
c. Layers of middle managers carry information up the hierarchy and decisions down to the Atroops? The process is slow and distortions may result.
Such organizations may be slow to respond to the needs of a highly dynamic marketplace - the objective often better served by virtual organizations.
Virtual Organizations:
A virtual organization is an organization whose structure is to a large degree created by using information systems rather than following organizations charts. Figure 1.4a & 1.4b emphasize how the structures of the emerging virtual organizations are flexible and are created, to a large degree, with information systems. Thus, in a network organization, the core firm surrounds itself with long-term corporate partners, with each company contributing its core competencies. In a cluster organization, the principal work units are teams of varying purpose and lifetime, some of them including the employees of the firm's business partners.
Network Organization: An organizational structure in which a firm becomes the core of an extended virtual organization that includes long-term corporate partners, supplying goods and services to the core firm.
Core Competencies: A specific capability that distinguishes the firm and that is valued by the marketplace.
Outsourced: Contracting out some of the goods or services previously produced by the firm to specialized providers. In information services, the practice of contracting out the operation of a firm's data centers, telecommunications networks, or applications development to external vendors.
Cluster Organization: Organizational structure in which the principal work units are the temporary and permanent teams of people who contribute their distinct knowledge and experience.
Intranet: An internal corporate network that deploys the Internet facilities, primarily those of the World Wide Web.
Telecommuting and Virtual Workplaces:
Employees are working more and more frequently in virtual workplaces, outside of their company's premises, and are said to be telecommuting. Telecommuting may lead to:
a. Higher productivity of the workers
b. Employees take responsibility for their work and are often under less stress.
c. Employees gain a sense of autonomy and control
d. Private life improves and they can use time more effectively
e. Corporate savings
f. More even job distribution throughout a country or a region
g. Enables employment to individualities with disabilities
h. Reduction of the social costs of automobile traffic, congestion, and pollution
Disadvantages:
a. Not conducive to all type of jobs
b. Lack of visibility for promotion
c. Feelings of isolation
d. Security and confidentiality of data are widely dispersed outside of the corporation premises.
Organizational environment denotes internal and external environmental factors influencing organizational activates and decision making. Organization or more specifically business organization and it’s activates are always being affected by the environment. In an organization, every action of management body is influenced by the environment.
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