Organisational structure | My Assignment Tutor

1Session 7: Organisational structure (P3- part 2)P3: Explain the relationship between different organisationalfunctions and how they link to organisational objectives andstructure.Prepared by: Dr Gilbert Zvobgo 1Dr Reza Aboutalebi Organisational structure is the formal layout of acompany’s personnel. Structure clearly defines reportingrelationships, decision-making authority, and thephysical location of employees from variousdepartments. Organisations create the structure to best meet theirpurposes Example – Oxfam (a large British charity)◦ Have departments concerned with 1- media & publicrelations; 2- managing its shops and 3- othersconcerned with organising famine relief around theworld22 Division of work – so everyone is clear about their ownand others roles and related tasks in the organisation Achieving organisational objectives: An organisationmay choose different organisational structures dependon its organisational objective. For example geographybased structure can be good for a company that itsobjective is ‘growth’ in different regions. Establish lines of control and communication To avoid conflict and individuals making decisionsthat contradict others Establishes chain of command3 Function-based (Functional Structure)◦ E.g. production, marketing, finance, HR Geography-based (Geographical structure)◦ E.g. North East, Midlands, Wales Product-based structure◦ E.g. grocery, homeware, electrical Customer-based (market-based) structure◦ E.g. individual and business bank accounts43 The function-based structure groups employeesaccording to a specialized or similar set of roles ortasks such as finance, or marketing. While functionalstructures operate well in stable environments wherebusiness strategies are less inclined to changes ordynamism.5Organisational Functions (finance, marketing, …) aremore important in the Function-based Structure.6Function-based Organisational Structure4 A geography-based organizational structure groupsrepresentatives from each functional department intounits formed to serve a specific market or region.Geographic organizational structure is used fororganizations that have offices or business units indifferent geographic locations.7 8Geography-based Structure5 The product-based structure groups activitiesaccording to product or service. Structuringby product involves organising the business intodivisions, each focusing on a different product. Insuch structure, you assign employees, regardless of thetype of their duties, according to the product their workrelates to.910Product-based Organisational Structure6 A customer-based organisational structure groupsexperts from different departments into units formed toserve a specific large customer or group of customers.For example the security company, G4S, can haveorganisational structure based on its three maincustomers such as local government (customer A),banks (customer B) and large retailers (customer C).11Customer A Customer B Customer C12Customer-based Structure– Products and servicestailored to customer’s need– Duplication of resources7 Every organisation has four major functions of HRM,Marketing, Finance, and Operations. These functions shape the whole or main parts of anyorganisational structure. No organisation can survive without having all of thesemain functions.13 MarketingTo attract and retain customersOperationsTo produce products at lowest costFinanceTo manage money & budgets Human Resources To recruit, train, pay & promote staff Although there are different organisational structures, allof these organisational structures have all of these majorfunctions.◦ In Function-based Structure the whole organisation ismade of these major functions.◦ In Geography-based Structure in every country or regionthe organisation has these functions.◦ In Product-based Structure for every type of product theorganisation has these functions.◦ In Customer-based Structure for every major customerthe organisation has these functions.14

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