18 – Organising for success: structure and processes

Types of Organizational Structure

Entrepreneurial Structure = It is appropriate for small owner-managed organisations.

Functional Structure = The simple structure develops into a functional structure were people are organised according to the type of work they do. 

Divisional Structure = The divisional structure sees the organisation divided into semi-autonomous units, based on geography, product or market. 

Matrix Structure = Matrix structures are often appropriate for organisations which pursue strategies involving lots of project work. Matrix type structures maintain co-ordination by co-working across functions. This usually means some form of dual authority that can be complex and confusing and may make control more difficult. 

Centralization Vs Decentralization

Centralization:

In this structure the authority of decision and power is attached to the top management.

Because of that the conflict of decisions doesn’t take place between staff.

 

Decentralization :

There is the delegation of authority by the top management to the middle and lower levels of management in an organisation. 

Centralization Decentralization

Harmon’s process-strategy matrix

According to Paul Harmon a process-strategy matrix is a matrix formed by an estimate of: 

  • the strategic importance of a process on the horizontal axis
  • the process complexity and dynamics on the vertical axis.

This matrix can be used to determine how to manage individual processes. 

Harmos's Process Startegy Matrix

Process Re-Designing

Proper execution of Business Process Re-designing can be a game-changer to any business. If properly handled, business process reengineering can perform miracles on a failing or stagnating company, increasing the profits and driving growth. 

Business process reengineering is the act of recreating a core business process with the goal of improving product output, quality, or reducing costs. 

Typically, it involves the analysis of company workflows, finding processes that are sub-par or inefficient, and figuring out ways to get rid of them or change them. 

BPR means changing the processes fundamentally. 

Causes of Problems
Typical Solutions