Virtual Organisation. Asked Mar. i. It utilises downward, upward and lateral communication networks for greater efficiency and quick decision-making. 3. The basic reason behind creating a virtual organization is to generate synergy through temporary alliances. Divisions may grow too large impairing managerial efficiency. Further, many disadvantages can be overcome if suitable steps are taken well in advance. 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. Posted on 24/04/2013 | Leave a comment . (ii) It focuses individual attention on each product line. (iv) It ensures effective utilisation of personnel in different departments. They offer day courses, evening courses and correspondence courses to meet the requirements of different types of students. email@example.com / firstname.lastname@example.org. May become difficult to achieve synergies across SBUs. Functional organisation is highly suitable for an enterprise engaged in production and distribution of a single product or a small number of products. 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. Functional design eliminates duplication. It relies heavily on information technology. Doctor without border help to find world equilibrium in the health sector. ii. The management groups the activities on this basis to cater to the requirements of clearly defined customer groups. In multi-product or multi-geographical area companies, divisions are created in the form of various strategic business units (SBUs). d. Unfreeze. Thus, departmentation by product generally leads to duplication of facilities. For example, in an insurance company, departmentation may be achieved on the basis of these functions, viz., underwriting agency, claims adjustment and administration. Huge Collection of Essays, Research Papers and Articles on Business Management shared by visitors and users like you. Explain the pros and cons of such an organization. When Jac… 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. 1. As said above, product based structure is suitable only for fairly large organisations having multi-product lines and which can appoint top managerial personnel to handle semi-autonomous product divisions. Departmentation by territory is commonly found among enterprises having business spread over a vast geographical area. In boundary less organizations, functional departments are replaced by cross-functional teams and organising activities around processes. 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. When I was in Vancouver, Canada I discovered the joy of writing about daily life in another country and sharing my thoughts with others. It tends to overburden the senior managers with routine matters. Terms of Service 7. These barriers are known as geographic boundariesand act as barriers between members of the same organization who are physically separated. Low-cost but efficient information technology has also facilitated this process. Recently, in telecommunication sector in India, many virtual organizations have been created to provide different services. Staff report to two managers: On one dimension of the matrix, they report to a profession manager who looks after their skills and methods. Computer networks are susceptible to attack from network hackers, viruses, and other types of mischiefs either for making money or just for fun. Such departments may be personnel, industrial relations, accounting, research and development, general administration, and so on. The concept and practice of boundary less organizations is quite new. Boundary less organizations are better equipped to manage these features. There is no long-term relationship with an employer, which means an employer is also less willing to invest in you; you have to do it yourself. The cons of management using the knowledge curve are: These cause price decreases. Sharply focuses on accountability for performance. Virtual organizations enjoy significant decreases in operating costs. Management, Organisation, Organisation Structure, Types of Organisation Structure. iii. Find out why managers want to reduce or eliminate these barriers and create a boundaryless organization. Change ), You are commenting using your Google account. San Francisco: Jossey-Bass. For instance, a big automobile servicing enterprise may organise its departments as follows – heavy vehicle servicing division, car servicing division, and scooter servicing division. Still have questions? It facilitates specialised performance of various functions. In the present era of globalisation, strategic alliances and organization-customer-supplier links have become significant sources for developing competitive advantage. This structure is very much helpful in implementing strategy of a multidivisional business. The functional structure is commonly found in small companies and also in large companies with single product line or narrow product ranges. Coordination and control take place through reciprocal adjustments among the members. These organizations may take the form of a modular organization, strategic alliance, or self-managing teams. i. 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. This structure serves the needs of the situation faced and is flexible in nature. The first and most important truth any leader must understand is that the human beings who work inside every kind of organization possess unlimited potential. 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. The use of the experience curve makes the organization less versatile and receptive to business requirements. Customer Based Structure 12. iii. It facilitates measurement of unit performance. (v) Excessive specialisation may destroy teamwork in the organisation. 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. - Comments that attack a person individually will be deleted. Market-oriented long-range growth-oriented strategies can be planned and implemented. If teams are not created properly, there may, Types of Organisation Structure – In Relation to the Attainment of the Organisational Objectives, 4. ( Log Out / (vii) Functional specialisation restricts development of generalists or managers with all-round capabilities. Separate strategic and operational control. Thus, proposing boundaryless behavior does not suggest a free-for-all removal of all constraints, but allows more permeability so that information, resources, ideas, and energy pass throughout the organization so that the whole functions far better than each of its separate parts. (iii) Project organisation requires specialists in various fields. But to coordinate their functioning, certain essential services such as Corporate Planning, Finance, Legal and Research & Development are organised at the headquarters. Each regional office has independent functional departments to realise its objectives. Entrepreneurial Structure (Simple Structure): 4. v. It tends to encourage overspecialisation, narrowing viewpoints of key personnel and limit the development of general managers. iii. No one in the organization is responsible for the project cost and profit. An organisation structure shows the authority and responsibility relationships between the various positions in the organisation by showing who reports to whom. (ii) It allows giving balanced weightage to the basic functions on which the survival of a firm depends. 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. Source(s): Anjaree. The merits of project structure are as under: (i) Project organisation concentrates on completion of a complex project or assignment. In traditional organizations, functional departments create horizontal boundaries which stifle interaction between functions, product lines, and units. May divert the owner from strategic decisions to day-to-day operating decisions. It helps to maintain the power and prestige of the major functions. These departments may be created on the basis of their requirement in the organization and can be placed according to their role in strategy implementation. The product requires different type of efforts as compared to others in terms of marketing and/or production. It deemphasises chain of control, span of control, and rigid departmentation. The boundaryless organization seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams. This comment policy is subject to change at anytime. Thus, each functional staff has two bosses—his administrative head and his project manager. ( Log Out / Change ), you are commenting using your WordPress.com.. ‘ one-size-fits-all ’ thought still keeps on until today Submit Answers for Grading feature requires scripting to function together collaborating. Hire their own advantages and disadvantages of product continue to control decisions that strategic... 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