Lecture 4 ( Farmanara) Flashcards
(9 cards)
Functional organization structure
Advantages
- Economies of scale and scope
- Organizational learning
- Easier coordination within one function
Disadvantages
- Weaker customer orientation
- Product costing difficult
- Coordination difficult for executive board
Divisional organizational structure
In this case, the divisions are dedicated to different products/ production technologies. Separation could also be based on customer segments, regions, applications, customer divisional
Advantages:
- Stronger customer orientation
- Higher flexibility with respect to market changes
- Better control of divisions &integration within divisions
Disadvantages:
- Duplication of business functions (less efficient)
- Internal competition (worse coordination between divisions)
Matrix structure
Advantages:
- Two reporting lines force communication & consideration of two perspectives (e.g. divisional vs. functional or central vs. regional)
- Widespread in R& D divisions: department heads vs. project leaders
Disadvantages:
- Continuous negotiations between reporting lines imply frequent conflicts, transaction costs, role uncertainty
- Informal coordination cause new, unintended structure
Vertical Differentiation (division of labour)
- Enables task differentiation, i.e. specialization & thus productivity increase
- It is based on authority, control, responsibility
Horizontal Integration
- Communication & coordination across interfaces & functional views/orientations
- R & D has long-term perspective, sales has short-term motivation (football team)
Mechanisms of organizational integration
- Standardization (plans, schedule)
- Boss (Hierarchy)
- Management committee/ team
- Coordinator
- Informal integration (Your friend do something for you)
- Formal integration (Google has products that are integrated)
Mechanistic and organic organizational structures
Mechanistic structures (healthcare, universities, and governmental organizations)
•efficiency
•strong differentiation/ standardization/ centralization
•weak integration
Organic structures (Google)
•flexibility
•weak differentiation/ standardization/ centralization
•strong integration
What is a Mission?
States the main purpose of your company’s existence. what the value it brings to the customer and what the company should be. It acts internally as a tool to give everyone in the team a sense of purpose.
What is a Vision?
Looks into the future and is an aspiration what the company wants to achieve in the near future. A mission is something to be accomplished whereas a vision is something to be pursued for that accomplishment.
