Chpater 12

Chapter - 12 Design of Organisation Structure

Organization Structure 

“Organization structure is a pattern of relationships about various components or parts of the organization it prescribes the relationships among various activities and positions”

Features of Good organization Structure: Simplicity  Flexibility  Clear line of Authority  Application of ultimate responsibility  Proper delegation of Authority 

Features of Good organization Structure: Minimum possible managerial levels  Principals of unity of direction in Command  Proper emphasis on staff  Provision for top management 

Departmentation: 

The first task in designing an organization structure is the identification of activities and a group them properly. The process of grouping the activities is commonly known as Departmentation.

Need and importance of Departmentation 

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Advantages of specialization Fixation of responsibility Development of managers Facility of appraisal Feeling of autonomy

Bases of Departmentation

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Function Product Territory Process Customer

Functional Departmentation BOD BOD

MD MD

Production

Marketing

Finance

Personnel

MR

Sales

Advertising

News Paper

Radio

TV

Product Departmentation Chief executive

Mid Class

Production

Marketing

Sedan Segment.

Finance

SUV

Personnel

Territorial Departmentation of Nissan Head office (Mumbai)

Eastern Zone

Jalandhar

Northern Zone (Delhi)

Roorki Branch

Southern Zone

Western Zone

haridwar Branch

Meerut

Process Departmentation Manager (production)

Structure

assembling

finishing

Customer Departmentation Marketing Manager

Direct customer

Corporate Customer

Transport customer

Span of Management 

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Span of management refers to the number of subordinates who can be managed effectively by superior’ Soujanen has suggested that span of management traditional concept and is not valid because coordination and control can be achieved through formal and informal activity.

Determination of span of management   

Direct single relationship Direct group relationship Cross relationship

Factor affecting span of management Capacity of informal relation  Capacity of subordinate  Nature of work  Degree of decentralization  Degree of planning 

Factor affecting span of management Communication techniques  Use of staff assistance  Supervision from others 