IT influence on Organization structure

1. Organization Structure & IT
-Harnoor Singh

2. The organizational structure of an organization
tells you the character of an organization and the
values it believes in.
Organizational structure is a pattern or
arrangement of jobs and groups of jobs within
an organization.

3. A social unit of people, systematically structured
and managed to meet a need or to pursue
collective goals on a continuing basis.
Definition

4. Six key elements
• Work specialization
• Departmentalization
• Chain of command
• Span of control
• Centralization and decentralization
• Formalization

5. Types of Organizational Structure
• Functional
• Divisional
• Matrix
• Network
• Team

6. Functional
• The organization is divided into
segments based on the functions
when managing.
• Advantage: Successful in large
organization that produces high
volumes of products at low costs.
• Disadvantage: Communication
between the functional groups is
not effective then, organization
may find it difficult to achieve
some organizational objectives at
the end.

7. Divisional
• Organizations divide the functional
areas of the organization to
divisions. Each division is equipped
with its own resources in order to
function independently.
• Divisions can be defined based on
the geographical basis,
products/services basis, or any
other measurement.
• Example: General Electrics. It can
have microwave division, turbine
division, etc., and these divisions
have their own marketing teams,
finance teams, etc.

8. Matrix
• When it comes to matrix structure,
the organization places the
employees based on the function
and the product.
• The matrix structure gives the best
of the both worlds of functional and
divisional structures.
• The company uses teams to
complete tasks
• The teams are formed based on the
functions they belong to and
product they are involved in

9. Network
• The network structure is a newer
type of organizational structure
viewed as less hierarchical (i.e.,
more "flat"), more decentralized,
and more flexible than other
structures.
• In a network structure, managers
coordinate and control relationships
that are both internal and external
to the firm.
• The concept underlying the network
structure is the social network—a
social structure of interactions.
Open communication and reliable
partners (both internally and
externally) are key components of
social networks.
• Disadvantage: More fluid structure
can lead to more complex relations
in the organization.

10. Team
• Newest organizational structures
developed in the 20th century
is team and the related concept of
team development or team building.
• In small businesses, the team
structure can define the entire
organization. Teams can be both
horizontal and vertical.
• While an organization is constituted
as a set of people who synergize
individual competencies to achieve
newer dimensions, the quality of
organizational structure revolves
around the competencies of teams in
totality
• Used by:- Xerox, Motorola, and
DaimlerChrysler

11. Other Structures
• Virtual organization is defined as being closely coupled
upstream with its suppliers and downstream with its
customers such that where one begins and the other ends
means little to those who manage the business processes
within the entire organization.
• The virtual organization exists within a network of alliances,
using the Internet. This means while the core of the
organization can be small but still the company can operate
globally be a market leader in its niche.
• According to Anderson, because of the unlimited shelf space
of the Web, the cost of reaching niche goods is falling
dramatically. Although none sell in huge numbers, there are
so many niche products that collectively they make a
significant profit, and that is what made highly innovative
Amazon.com so successful

12. Bureaucratic Structures
• Bureaucratic structures maintain strict hierarchies when it comes to people
management. There are three types of bureaucratic structures:
• 1 - Pre-bureaucratic structures This type of organizations lacks the
standards. Usually this type of structure can be observed in small scale,
start-up companies. Usually the structure is centralized and there is only
one key decision maker.
• The communication is done in one-on-one conversations. This type of
structures is quite helpful for small organizations due to the fact that the
founder has the full control over all the decisions and operations.
• 2 - Bureaucratic structures These structures have a certain degree of
standardization. When the organizations grow complex and large,
bureaucratic structures are required for management. These structures are
quite suitable for tall organizations.
• 3 - Post-bureaucratic Structures The organizations that follow post-
bureaucratic structures still inherit the strict hierarchies, but open to more
modern ideas and methodologies. They follow techniques such as total
quality management (TQM), culture management, etc.