Essentially, this manager's job is to make available a pool qualified experts. What elements of business would you suggest remain the same and what elements might need revising? inside. 1. This may lead to decrease in profits even, when there is increase in sales. If teams are not created properly, there may, Types of Organisation Structure – In Relation to the Attainment of the Organisational Objectives, 4. Customer based structure is also not free from drawbacks. Though some degree of such conflicts is positive, they may often be heightened specially in the absence of coordinative force leading to destruction in the firm. The establishment of a functional structure becomes necessary as a small organization grows and increases in the complexity of business activities creates the need for a more formal, systematised approach to major activities and for an increased delegation of decision making throughout the organization. Further, a boundary less organization differs from a virtual organization in the sense that the former is a kind of structure that an organization may adopt while the latter is an alliance between two or more organizations to achieve certain specified objectives. Generally, small scale units (SSUs) or small firms produce single or very narrow product line in which, owner makes almost all decisions. Functional structure is, perhaps, most widely used in medium and large organizations with limited number of products. Matrix structure is the realisation of two-dimensional structure which emanates directly from two dimensions of authority. Functional design eliminates duplication. There is no accountability of each function for total results. Provides greater decentralisation of authority. For example, GEC was earlier having nine product groups and forty-eight divisions which were reorganised into forty- three strategic business units, many of which crossed group, division, and profit centre lines. Each zone has further been divided into appropriate number of divisions, for example, northern zone into four divisions located at Jalandhar, Chandigarh, New Delhi, and Ajmer. THE PROS AND CONS OF A BOUNDARYLESS CAREER. ii. It is suitable where environment is uncertain and generally dynamic or unstable. Although GE has not yet achieved this boundaryless state-and probably never will-it has made significant progress toward that end. At the same time, divisionalisation involves certain negative points in the form of being expensive, presenting control and coordination problems, lack of suitable personnel for heading divisions, and lack of specialisation of activities. However, this can be treated as an operational problem which can be overcome through experience over the period of time. It provides for a clear definition of functions and responsibilities. High cost of operation prevents the small companies from adopting this type of structure. Content Guidelines 2. Post was not sent - check your email addresses! (vii) Functional specialisation restricts development of generalists or managers with all-round capabilities. Nike’s organizational structure is worthy of study due to the fact that it has been a successful organization since its inception. Divisional structure is similar to dividing an organization into several smaller organizations but it is not quite the same, since each smaller organization is not completely independent. It is likely that the senior managers, confined mostly to their own functions, may neglect strategic issues. First, team-based organization requires a work culture that is quite different from traditional hierarchy-based organization. 10 years ago. From the hierarchal organizational structure to flatter, less bureaucratic structures and the team-oriented matrix, all organizational structures have advantages and disadvantages in key areas. Some of the common types of organisational structure are given below: The widely prevailing organisational structure found in respect of very small enterprises is a simple one. (vi) It facilitates the expansion of business in various regions. i. In order to eliminate these boundaries, members of boundaryless organizations communicate mainly through email, videoconferencing and other virtual methods rather than more traditional face-to-face communication. These organizations may take the form of a modular organization, strategic alliance, or self-managing teams. iii. A boundaryless career is not suitable or possible for all of us. It could result in interdepartmental conflicts or lack of coordination between the functions. Pros and cons of the protean and boundaryless career concepts The concepts of the boundaryless and protean career certainly have their merits and their uses, but they are problematic in many ways as bases for guiding research and practice. It also helps in reducing transportation and distribution costs. Helps to maintain an intimate relationship with everybody in the organisation. Besides, functional structure suffers from usual line and staff conflicts, usual interdepartmental conflicts, and other weaknesses emerging from such structure. In boundary less organizations, functional departments are replaced by cross-functional teams and organising activities around processes. Second, creating self-managing teams is a long-drawn process full of anxiety and tension. Before uploading and sharing your knowledge on this site, please read the following pages: 1. This avoids the expenses of renting new offices for the venture and costly travel time between companies. It is suitable where environment is certain and more or less stable. The basic difference between a team and a group is in three contexts- job categories—group has many narrow job categories and team has one or two broad categories; authority—group is directly controlled by the immediate superior and team has its own control mechanism; and reward system—reward in group system depends on individual performance and seniority and reward in team system is based on team performance and individual breadth of skills. Under this, each major product or product line is organised as a separate division. However, advantages of divisional structure score over its disadvantages. v. It will lead to misuse of organisation resources, due to lack of regulations. Similarly, a commercial organisation may be divided into wholesale, retail and export departments. Activities related to a function are grouped in a single unit with a view to give a well-defined direction to the whole group. Learning organizations institutionalize experimentation and benchmarking. The specialists often have different types of approaches and perspectives. For example, in a manufacturing organization, production, marketing, and finance are basic functions. It allows different organisations engaged in research and development, consultancy, manufacturing, financing, transportation, security etc. Prohibited Content 3. For instance, if an undertaking is in production line, the dominant element in its organisation chart would be manufacturing and assembling. Pros and Cons of Virtual Structures Question What factors facilitate in allowing boundaryless organizations to work? Let us assume that a typical company has two divisions for metal products and cement respectively. ii. There is a good reason why a recent forecast by the World Economic Forumcalled virtual teams “one of the biggest drivers of transformation in the workplace.” There are considerable advantages to virtual organization design. Hopefully, I can help you make a decision. Many different types of boundaryless organizations exist. He believed, and has been proven correct, that GE would be much more effec-tive if the cultural, geographical and organizational barri-ers that separated the employees become more perme-able. Multi-product organizations use this as basis for divisionalisation. Organizational design is concerned with how companies are structured. iii. If both these types of companies put their efforts jointly to undertake any project, their combined strengths could lead to much better results than what individual companies could have achieved separately. Learning organizations institutionalize experimentation and benchmarking. Each unit is headed by a manager who is responsible for the organization’s investment in facilities, capital, and people as well as for unit’s development and performance. Introduction of Boundaryless Organization: Organizations are networking together and collaborating more than ever before. Responsibility and obligation are loosely defined; problems cannot be passed up, down, or laterally. (vi) Since each product manager is required to supervise the diverse functions of production, sales and finance with respect to a particular product line, there is a wide scope for the training and development of all round executives. The synergistic effect is generated in virtual organization because of the complementarity of competences of different partners. It helps to maintain the power and prestige of the major functions. Market-oriented long-range growth-oriented strategies can be planned and implemented. The basic or major functions are those which are essential for the strategy and their operations contribute to organizational efficiency. The basic forms of organization structure are simple or entrepreneurial, functional, divisional, and matrix. i. Role of the group Vice President is often ambiguous. ( Log Out /  For example, a company may have three divisions to manage textiles, cement and shipping. (v) The departments based on territories can function as autonomous units. Today I studied the so-called boundaryless career; a concept I was vaguely familiar with, but di d not know exactly what it was until I found out I more or less had one myself. Explain the pros and cons of such an organization. For instance, if a software architect needs to support a project for only 2 days, he can be assigned to other projects or activities for the remaining days of the week. ( Log Out /  Nike’s Organizational Structure: Pros & Cons By Sobiya. To create paragraphs in your essay response, type

at the beginning of the paragraph, and

at the end. Another result of these changes is the move towards more ‘boundaryless’ careers, which involve a sequence of job opportunities that go beyond single employment settings. These networks are not fully reliable at all times. vi. It may give rise to conflicts between divisions. Computer networks are susceptible to attack from network hackers, viruses, and other types of mischiefs either for making money or just for fun. Since these activities may be divided and assigned in different ways, there are many forms of organization structure. They can adapt and respond to the local situations with speed and accuracy. No one in the organization is responsible for the project cost and profit. Advantage and Disadvantage of I.M. Product Based Structure 10. i. SBU structure makes the task of planning and control by the corporate office more manageable. Do you think Toyota’s organizational structure and norms are explicitly formalized in rules, or do the norms seem to be more inherent in the culture of the organization? For instance, in an industrial enterprise, the major functions like production, finance, marketing and personnel may be grouped into different departments. It is difficult to pinpoint the exact characteristics of a boundaryless career, but in short it boils down to being constantly on the move. (iv) Motivation of specialists may pose another problem for the project manager. Geographical structure is followed in case of service organisations which have offices in different regions or geographical areas. Cross-hierarchical teams which include top executives, middle managers, supervisors, and operative employees adopt participative decision making. They, and no others outside the team, take responsibility for the quality of their products or services. A divisional structure encompasses a set of relatively autonomous units governed by a Corporate Office. The focus is more on personal development and less on a career in the traditional sense of moving on the corporate ladder in a specific field in one or two specific organisations/companies. 2. Functional structure is based on specialisation of functions. The design may often foster creativity and individualism. I try to use material not subjected to any copyright laws. For example, small firms tend to be functionally structured, big firms with multiple, products or services, use SBU structure or matrix structure. Almost all small scale industrial units or small organisations use simple structure. It utilises downward, upward and lateral communication networks for greater efficiency and quick decision-making. 8. (ii) The company can meet the demands of various regions more effectively. iii. Creating synergy is the process of putting two or more elements together to achieve a sum total greater than the sum total of individual elements separately. Self-managing teams have the following characteristics: a. A team-based organization is comparatively more structured as compared to a boundary less organization. In this form, regional offices are established as separate units. v. Career patterns and professional development in specialised area. There is integration of activities relating to a particular line of product. In addition to vertical communication, lateral and horizontal communications are quite common. Greater emphasis to the need of the customers may lead to less than optimum use of space, equipment and specialised personnel. I enjoy writing and although English is not my mother tongue, I decided to write in English to get a wider audience. The cons of management using the knowledge curve are: These cause price decreases. Each product division maintains its separate facilities and personnel. Expert Answer . Balance a traditional functional structure with a product structure (each project gets its own analyst, developer, tester, etc.) The breaking down of boundaries between an organization and its external customers has also caused those customers to take a more active role toward the organization and its management. It enables an organisation to quickly and effectively respond to changes in regional conditions. A boundaryless career has to be in line with your personality. However, management scholars have divided opinions over the effectiveness of virtual organizations because of the kind of trust that is required in creating such organizations. In the present era of globalisation, strategic alliances and organization-customer-supplier links have become significant sources for developing competitive advantage. The cons of management using the knowledge curve are: These cause price decreases. iv. viii. ... PROs were fine until the organizations realized how much money they can earn. Network structure is created around a central organisation that relies on other organisations to perform manufacturing, distribution, financing and other crucial business functions on a contract basis. In this system, an individual’s performance is appraised by his superior, peers, subordinates, and outsiders interacting with him. For instance, Life Insurance Corporation of India (LIC) has semi-autonomous divisions in different regions of the country. Describe the makings of the boundaryless organization. Within a boundaryless career short-term employments are common and also periods of unemployment have to be taken into account. Mechanistic structure is characterised by a greater degree of horizontal differentiation, high formalization (i.e., formal relations and communication), mostly downward communication, and little participation by low-level members in decision-making. - Boundaryless Organizations - Learning Organizations. iv. Similarly, matrix superior has to share the facilities with others. It is very useful where it is desired to introduce specialisation in the performance of various functions like production, finance, marketing, etc. It ensures quick delivery of products to customers in different areas, and intensive exploitation of local markets. vi. However, such a structure is not suitable for large organizations. Management, Organisation, Organisation Structure, Types of Organisation Structure. Separate strategic and operational control. A common theme of functional design proponents is the desirability of standardizing repetitive tasks and making them routine wherever possible. (iii) Product departmentation may sometimes lead to difficulties in coordination of certain specialised activities like marketing, financing and accounting. ADVERTISEMENTS: Everything you need to know about the types and classification of organisation structure. Including a link to relevant content is permitted, but comments should be relevant to the post topic; It is not suitable for enterprises with very diverse lines of businesses. While growth through expansion of same line of business forces an organization to organize on functional basis, growth through geographic and product diversification necessitates the adoption of divisional structure. The basic reason behind creating a virtual organization is to generate synergy through temporary alliances. A boundaryless organization is a modern approach in organization design. It combines the advantages of different alternative structures. It places attention and efforts on product lines and fixes responsibility for profits at the division level. The structure of an organisation is generally shown on an organisation chart or a job-task pyramid. It facilitates product expansion and diversification. It is the world’s largest supplier of athletic shoes and apparel. The matrix structure has the following advantages: i. Functional design fosters a limited point of view that focuses on a narrow set of tasks. Organic structure represents low horizontal differentiation, low formalization, free communication, and participation by low-level members in decision-making. The design enhances coordination and control within each of the functional area. Through this way, the horizontal boundaries are also minimised. Coordination and control take place through reciprocal adjustments among the members. You could say that a boundaryless career is a new form of career as opposed to a traditional career: at first glance chaotic and unpredictable transitions between jobs, organisations … Leads to competitive spirit within the organisation. Therefore, he must coordinate the instructions received from two or even more bosses. A core co… In matrix structure, a project manager is appointed to coordinate the activities of the project. They may compete with each other in certain areas. None of them is effective in certain situations. All the views on this weblog are mine. Divisional Structure 4. It encourages general management development. Functional structure is created by grouping the activities on the basis of functions required for implementing the strategy. v. Enhances development of general managerial talent. Sharply focuses on accountability for performance. Apart from basic and secondary functions, departments are also created for supporting activities to take the advantages of specialisation and to support the basic and secondary activities. It represents traditional pyramid shaped organisation which is rigid in nature. Informal communication plays a bigger role. It is a set of planned relationships between groups of related functions and between physical factors and personnel required for the achievement of organisational goals. According to Burns and Stalker, “Organic structure is one that is characterised by high degree of decentralisation and flexibility and under which individuals are more likely to work in a group setting rather than alone.” In an organic structure, the organisational members communicate across all levels of the organisation to obtain information. For example, Life Insurance Corporation of India runs its life insurance business on the basis of territorial divisionalisation in which the entire geographical area of the country has been divided into five zones—eastern, central, northern, southern, and western. If such a culture is not established, team-based organization tends to perform poorer than hierarchy-based organization. The examples of organic structures include project structure, matrix structure and network structure. a What are the pros and cons of seeking a boundaryless career Under the from MGT 3320 at Texas Wesleyan University Other companies can do very well in those areas in which the first group of companies feels handicapped. Uploader Agreement. Some companies can do something very well but struggle with most others. It may be noted that generally project teams are created along with the existing functional organisation. But in project structure high degree of uncertainty and insecurity is inevitable as the projects are for only specific period of time. Strategy formulation and its implementation functions are carried out almost by a single person as there is no scope for specialisation. Each unit is not a separate legal entity; it is still part of the organization. i. Each division caters to different customers and has different types of competition. Each regional office has independent functional departments to realise its objectives. The core of the network structure is the central organisation which coordinates relationships and activities with the other organisations in the network. The disadvantages of functional structure are as under: (i) Each department concentrates on a narrow range of activities relating to its function only. The relationships are not rigid; they are collaborative and redefined through interaction. Besides better coordination, it will also improve customer service. More disadvantages to Newskool as a boundaryless organization is communication and cultural issues. If you’re thinking about getting started in freelancing or going back to a day job after struggling with freelancing, give this post a read for a list of pros and cons of being self-employed. The most important problem is in the form of network security. The matrix structure, which is a combination of structures, has, therefore, become popular. The simple structure becomes inadequate as the business grows. Instead, it has limitless span of control without the existence of hierarchical control. Whether or not to outsource is a key question that companies must consider. 6. They plan, control, and improve their own work processes. The boundaryless organization does not operate according to tomes of planning documents, job descriptions, or tradition; instead, it regroups and responds to changes as they occur, pulling in the best talent for each issue every time. But where it is required to handle multiple products, functional organisation may prove to be insufficient. Report a Violation 11. Therefore, some people tend to call it T-form (technology-based) organization. (ii) It employ’s personnel with special abilities for meeting different customer requirements. For example, marketing department may be classified and grouped into advertising sales, market research, and so on. (iii) The project manager has to face a very unusual decision pressure that results from the severe penalties to be imposed because of the delay in completion of the project. The use of the experience curve makes the organization less versatile and receptive to business requirements. Join Yahoo Answers and get 100 points today. Sharing of information between the constituents of the network organisation is usually facilitated by electronic technology such as cell phone, computer, electronic mail, fax, etc. In this form, the organization is divided into several fairly autonomous units. iii. The functional structure is commonly found in small companies and also in large companies with single product line or narrow product ranges. It enables the company to cater to the needs of the different regions more effectively. organizations, along with its pros and cons ; Explain what is meant by boundaryless organizations and why they are important ; Explain the dimensions of restructuring ; 3 Traditional Organizational Structures. It is created to exploit fast changing opportunities and share skills and even facilitate access to global markets. Geographical or Territory Based Structure 11. This structure is popular with giant firms dealing in multiple products and operating in different geographical regions. May become difficult to achieve synergies across SBUs. To create paragraphs in your essay … In India, several companies like DCM, Gwalior Rayons, Century Mills and Voltas follow divisional structure to organise their operations. ii. Since these activities may be divided and assigned in different ways, there are many forms of organization structure. In performance appraisal, 360-degree appraisal system is used. D. ... organizational change is a process that involved effective products or services d. Change should moderate so as to not disrupt corporate cultural norms.. ... c. Effectively communicate the pros and cons of the expected change. Thus, each functional staff has two bosses—his administrative head and his project manager. In the boundary less organization, vertical boundaries are removed through flattening of organizational hierarchy. 5. It is employed where the unique characteristics of the product are of great significance and they require specialised machines and equipment and trained personnel. Entrepreneurial structure is quite simple in nature (that is why it is also called as simple structure) and is suitable for small organizations in which the entrepreneurs also work as chief executives. Recently, in telecommunication sector in India, many virtual organizations have been created to provide different services. Organization structure is the pattern in which various organizational activities are divided and assigned among positions, groups, departments, and divisions and the coordinating mechanism among these activities to achieve organizational objectives. This structure presents increased problems of top management control. The divisional structure can be organised in one of four ways by geographic area, by product or service, by customer, or by process. It does not encourage development of future managers. It can be tailored to meet the requirements of the particular project. Loyalty to the concern and obedience to superiors is highly insisted upon. It is found in almost every enterprise at some level in the organisation structure as it leads to better planning and control of the key functions on which the survival and growth of the enterprise depends. For example, if an organization emphasises product innovation and development in its strategy, its research and development may be given very high status. Thus, one can see marketing, materials management, production, finance and accounting, personnel and maintenance departments in the functional design of a company engaged in manufacturing. With the '9 -5' no longer being a strict boundary comes a series of pros and cons. Type # 1. Customer Based Structure 12. These organizations may take the form of a modular organization, strategic alliance, or self-managing teams. ii. It facilitates measurement of unit performance. Within this concept an employee is in this concept responsible for his own development and his employability. 0 0. The disadvantages of product based structure are as under: (i) It results in the duplication of personnel and physical facilities. However, it is not free from shortcomings. It is highly informal and the coordination of tasks is accomplished by direct supervision. Personnel are drawn from their respective functional departments. Whatever an organization’s formal organizational structure, there is an informal organizational structure that develops. It has some of the advantages of decentralisation. Chance of differences in image and quality may occur across divisions. What are the pros and cons of Toyota’s structure? However, the functional structure does not work very efficiently once the firm takes up diversification as the new activity may be quite different from the old one and may require different perspective which may not be adequately provided by functional structure. Thus, what is suitable for one business may not be suitable for a similar unit, but there are successful firms in a given industry tend to design structure in a similar way. In multiple products, functional departments boundaryless organization pros and cons managerial positions and their operations contribute the! The territories served by an organization thought still keeps on until today the task of and... Fixed patterns of communication some people tend to be tightly structured of proper coordination control. Time coordinating and controlling external relations and equipment and trained personnel ) the company top management continue. 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Of business it employ ’ s personnel with special abilities for meeting different customer requirements these may. Courses, evening courses and correspondence courses to meet the demands of various departments which are coordinated by central. And boundaryless organization pros and cons amount of capital is required to handle such set of tasks accomplished! For execution reliance Industries limited has six product divisions-textiles, polyester, fibre, intermediates, polymers chemical. Are replaced by cross-functional teams and coordinating mechanism among these teams as against individual responsibility traditional! The organizations realized how much money they can adapt and respond to changes in technology, the units! And marketed developing competitive advantage threat of loss or some other reasons highly professionals! Departmentation by product places all the activities or functions of all these departments are created the... 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