Structure of an organisation which results from the organising process is the basic framework within which the decision-making behaviour of an executive takes place. Many … Functional Structure: . A bureaucratic structure has both advantages and disadvantages. A horizontal organizational chart usually has two or three levels, and the business owner typically holds the top position on the chart. Question Bank Solutions 14550. Defined by four specific features including a clear hierarchy and a rigid division of labor, a bureaucracy can provide stability and security, while discouraging favoritism. To achieve organizational goals and objectives, individual work needs to be coordinated and managed. The Future is Flexibility: New Organizational Structures for Companies. Alphabet Inc. organizational structure is divisional. Just look at the numbers. Some of the advantages of a pure line organisation are: (i) A line structure tends to simplify and clarify responsibility, authority and accountability relationships. It also helps create bonds between them. Small businesses may also use a team-based type of flexible structure for temporary projects. Advantages … Tesla benefits from divisional organizational structure through less bureaucracy compared to many other companies of similar sizes. Flexibility: b) Respect: c) Individualism: d) Understanding: Yes, that's correct. Deloitte: Unlocking the Flexible Organization: Organizational Design for an Uncertain Future, Performance Magazine: Improving Performance: Flexible Organizational Structures, Forbes: The 5 Types Of Organizational Structures: Part 2, 'Flatter' Organizations, HubSpot: 9 Types of Organizational Structure Every Company Should Consider. Divisional Structure. You can do this by encouraging your employees to find new ways of doing business that are better. A competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). A wider span of control means managers may find it harder to monitor and manage workers as well as develop strong working relationships with them. voluntary or charitable, the number of people it employs and its physical resources. It promotes flexibility and initiative because each division functions as an autonomous unit which leads to quick decision-making. 9. Rapid changes will occur- in technology and also in the economy - which means that only organizations that are flexible so that they can adapt to these changes will succeed, which will give them a massive advantage over more-rigid organizations. A defensible positioning, i.e., difficult for competitors to replicate 3. McDonald’s organizational structure establishes the arrangement or pattern of interactions among various business areas. This model can also help save companies money due to the need to pay fewer managers and the potential for higher productivity and work quality. Exhibit 10.4 illustrates a staff or functional authority organisational structure. Whatever challenges that come along will strain the organization. The team would break up once the app development completes. Functional structure is a permanent feature of the matrix organisation and retains authority for the overall operation of … Flexibility in business means that you don’t live by the maxim, “If it ain’t broke, don’t fix it." Advantages and Disadvantages of Functional Organisation 4. Of the alternatives given A is the most noted of the supposed advantages of the matrix system. Without such a structure it will be very difficult for employees to agree among themselves on duties. Some other places featuring her business writing include JobHero, LoveToKnow, PocketSense, Chron and Study.com. Such satisfied employees will be more likely to stay with your company. For example, a non-tech company might decide to develop a mobile app quickly and need to pull workers from departments such as marketing, information technology, research and development and sales to produce it. In quick change conditions, flexibility is a competitive advantage. The Advantages of Flexibility in an Organization. One of the characteristics of a flexible organization is that it is prepared for uncertainty. An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. Provision […] The major advantage of the virtual organization is its _____. Business studies. Join now. After reading this article you will learn about the advantages and disadvantages of different types of organisation:- 1. See also our section on initiative, problem solving and decision making as the skills are very similar. If you’ve had a job, you likely worked in a functional organizational structure.The functional structure is based on an organization being divided up into smaller groups with specific tasks or roles. Unity of Command and Direction 7. The flatness of Google’s organizational structure has the advantage of promoting innovation and creativity, based on the sharing of knowledge throughout the business organization. Organizational flexibility is all about adapting to expected and, Much more, to unexpected changes that may come. 1. What Is the Importance of the Inverted Pyramid in an Organization? The Advantages of Flexibility in an Organization. When you accommodate your employees' needs like this, you enable your employees to become more loyal to your company, so that it becomes easier for you to retain your best employees who might otherwise have left the company, had your company offered only a rigid schedule. Advantage -- Clear Chain of Command. Advantages and Disadvantages of Staff Organisation 3. Simplicity 2. Decentralization makes for democratic management and flexibility of operations. It creates a structure of unequal treatment. As per our research, over 96% of employees like flexibility at the workplace. The organizational culture can help people interact better with each other. Lastly, a company with a flexible structure might find it harder to retain its staff when there aren't clear paths to promotion and where employees may have unclear roles. Which of the following is an advantage of a network structure? Lastly, employees in flexible organizations may have higher job satisfaction due to more learning opportunities and autonomy. Application of Ultimate Authority 5. Hybrid structure, otherwise known as matrix structure, is a type of organizational structure within a company/organisation that is a combination of functional and divisional structures. This would be a boon to your employees, since it would benefit those who have families or other responsibilities. The Disadvantages of Team-Based Organizational Structure, Culture IQ: 4 Types of Work Flexibility to Consider for Your Employees, SHRM: Workplace Flexibility Necessary for Business, Speaker Says, LinkedIn: The Importance of Being Flexible In Business, The Structure of a Boundaryless Organization, Strategic Flexibility, Rigidity, and Barriers to the Development of Management. Flexibility: b) Respect: c) Individualism: d) Understanding: Yes, that's correct. Four types of common organizational structures are implemented in the real world. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup, and individual. One of the problems with an organization that is rigid and mechanistic is that it cannot adapt. She also has earned a Master of Business Administration degree with a leadership and strategy concentration from Western Governors University. Businesses across the nation implement them to improve working conditions and reduce operating costs associated with in-office employees. Important Solutions 2834. The Advantages of Horizontal Organization. For example, a company could have a group working in information technology, another in marketing and another in finance.Each department has a manager or director who answers to an executive a level up in the hierarchy who may … McDonald’s marketing mix (4P) integrates how the corporate structure provides support for strategies and tactics. refers to how individual and team work within an organization are coordinated. She also studied business in college. Nicky is a business writer with nearly two decades of hands-on and publishing experience. 2. Another use of a flexible structure would be a larger business that operates in multiple geographic areas. A unique positioning 2. That is because the work of the entry-level workers is what allows the organization to operate properly. A manager who is too rigid won’t do this. Alternatively, this type of structure can hinder productivity. It’s best if the organisation is flexible in the number of people and the skills in … A flexible company will be willing to try new methods and processes, even when the old processes seem to work just fine. Project-Based Organizational Structure. In other words, structure encourages specialisation, moreover as employees with related skilled are grouped in functional departments. time flexibility, labour turnover, compensation schemes and some institutional aspects (e.g. An unpredictable, rapidly changing environment demands flexibility, adaptability and interdepartmental cooperation. Workplace flexibility is a strategy that emphasizes being able and willing to adapt to changing circumstances when it comes to how work gets done. As time progresses, this culture of constantly experimenting and improving your processes will mean that your company becomes more efficient, so that it can enjoy higher revenues and reduced costs. Organizational structure defines the way in which the people and resources are organised and coordinated by the authority to achieve the organizational goals. Organizational culture is the values and the practices that persist in an organization. Functional organisational structure refers to the structure in which different departments are created on the basis of major functions performed in the organisation. A bureaucratic structure has both advantages and disadvantages. Concept Notes & Videos 439. Organisation Structure. In that case, each region's branch may need to make decisions in response to different customer needs. Necessary changes can be made without dislocating the entire structure. Of course, when your organization is flexible, it will accommodate your employees' needs and schedules, which means that they will have a healthier work-life balance, and they will be more satisfied with their jobs. A flexible structure is an informal type of organizational structure that puts less emphasis on departmentalization and a strong chain of command than a traditional bureaucratic structure does. Concept: Structure of Organisation. In the contemporary world, a small business must be flexible. While commonly used for small businesses with few employees, a flexible structure can work for any company that needs to facilitate communication and decision-making among lower-level workers and make it easier to respond to frequent change. A flexible structure offers the potential for more innovation since workers aren't restricted to departments and can more easily share their knowledge and make decisions. Defined by four specific features including a clear hierarchy and a rigid division of labor, a bureaucracy can provide stability and security, while discouraging favoritism. This often means less management, less job specialization, a wider span of control and primary use of horizontal communication. However, there is more flexibility in job roles with less emphasis on specialization. Essential components of a successful strategy include, but are not limited to, the following: 1. Getting some experience in each of these structures is a good idea so you can experience them firsthand. A flexible organization will also be able to deal with uncertainty in economic and technological environments. Competitive advantage is a theory that seeks to address some of the criticisms of comparative advantage. One example of a flexible structure is the flat organizational structure. To achieve organizational goals and objectives, individual work needs to be coordinated and managed. Ashley Donohoe started writing professionally about business topics in 2010. The advantage include flexibility of tasks, greater learning and disadvantage include chaotic situation when two bosses present opposing points of view. An organisation where staff departments have authority over line personnel in narrow areas of specialization is known as functional authority organisation. The disadvantage includes higher costs associated with maintenance of such structures. Another example of a flexible organization is that you could consider allowing job sharing, so that you could split one job among two employees, who each work part-time, rather than having one employee who works full-time. The most flexible organizations offer their employees a more diverse range of options. No, that's not right. Advantage. This model can also help save companies money due to the need to pay fewer managers and the potential for higher productivity and work quality. Outlining the Company Structure: Providing a basic structure of the division of work and responsibilities. Let’s start with your company policy. Workplace flexibility can enhance work-life balance for employees, leading to greater satisfaction and retention. Log in. Flexibility and promptitude are the qualities of the organizational success … Name the Type of Organisational Structure Which Promotes Flexibility and Initiative. These clearly determine who is responsible for which tasks and which powers they have. Each division is positioned as a separate brand such as Google, Calico, Nest, Access (Fiber) and others. Organizational structure How individual and team work within an organization are coordinated. Small businesses today must be flexible, or they risk failure. Similar to an organization with a project-based structure, managers in flexible organizations usually group workers to best accomplish common goals. Flexibility is a necessary entrepreneurial trait. Eventually, a challenge will come along that's so massive that the organization may falter. people sign on white background image by T.Tulic from. Textbook Solutions 11268. March and Simon have stated that […] Flexible benefits tend to be something that potential employees are looking for right now, as it allows them to have more control over the issues that they have in their lives. Network structures are lean and streamlined C. Network structures … Such an organization will also utilize technology, which will enable its employees to work remotely and to collaborate virtually. This leads inexorably to the institutionalization of certain processes and systems, which, in turn, diminishes the flexibility advantage these smaller firms enjoy. We live in an era of risk and instability. Perhaps the biggest advantage of a matrix structure is that is brings together highly skilled team members from different departments, allowing the organization to capitalize on the resources it already has rather than seeking expertise and recruiting project team members from outside of the organization. In relation, the company’s corporate structure has the benefit of … Differentiation can occur by way of a variety … Instead, this structure relies on allowing the workers on lower levels to make decisions as much as possible and emphasizes the ability to adapt quickly to changing business needs and allow for growth. You will get to hold on to your best employees and enjoy increased productivity from them. Join now. 6 Types of Workplace Flexibility: Adaptability and flexibility is a form of key to the company’s growth and success, even though not all employees like adapting to new changes and situations. No, that's not right. Flexible work arrangements are more than a trend—they’re a cost-efficient way of keeping a business running. Thus, structural characteristics are linked to the company’s strategies. For the purposes of this article, we propose using a simple framework for thinking about competitive strategy. Flexibility is considered to be a key advantage of an organisation that is based around project teams (matrix structure). He will try to force square pegs through round holes. The hierarchical organizational structure should have the base of the pyramid at the top and the point of it at the bottom. One of the factors that seriously alters the playing field is technology. This means that communication gets channelled along defined and predictable paths, which allows those higher in the organisation to direct questions to the appropriate parties. 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