Organizational Design, Diagnosis, and Development

1
Organizational Design, Diagnosis, and Development

• Session 6
• Departmentation, I

2
Objectives

• To examine functional structure and its effects
• To review the value of functional groupings
• To consider departmentation by product, region,
  client
• To review the value of divisional groupings

3
Functional Structure
Grouping by Activity
4
Effects of Functional Structure

• Provides for common supervision
• Defines boundaries for resource sharing
• Defines local goals basis for measuring
  achievement
• Provides for better internal coordination

5
Advantages to Functional Structure

• Foster professional identity
• Clarify supervisory roles
• Enhances opportunities for expertise to flourish
• Provides specialization expertise to other
  departments

6
Disadvantages to Functional Structure

• Promotes between group differences
• Sets environment for territoriality conflicts
• Makes performance more difficult to trace
• Makes generalists more difficult to develop

7
Product Structure
Grouping on Product Similarity
8
Geographic Structure
Grouping on Regional Proximity
9
Client Structure
Grouping on Market Similarity
10
Advantages of Divisional Structure

• Provides for better coordination between units
  within division
• Provides for expansion with control
• Provides for specialized treatment
• Allows better control systems
• Gives more autonomy to management

11
Disadvantages to Divisional Structure

• Duplication among departments
• Reduces specialization
• Encourages competition among divisions

12
Backwards Forwards

• Summing up Today we looked at various ways to
  form groups in organizations from functional to
  product, regional and client based. With the
  costs and benefits the costs and benefits were
  considered.
• Looking ahead Next time well consider mixed
  groupings and multinational forms. As well as
  dealing with strategic issues in redesign.