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7/29/2019 Organizational Design & Structure
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ORGANIZATIONAL DESIGNAND STRUCTURE
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Business & Organization
Business It means investment for a purpose, products & service,
customers, vendors, competition, environment, growth, profitability, ROI
etc.
Organization It means Vision, mission, strategy, structure, people,systems & processes, policies, rules & regulations, culture, leaders,
teams, motivation, morale, hierarchy, grades, designation, reward
system, corporate social responsibility etc.
Structure creates congruence between the Business and theOrganization and facilitates vertical and horizontal integration of Goals,
processes, functions etc
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ASSUMPTION / BASIC PREMISE FOR ORGANISATION
STRUCTURE
Structure which will
Support and sustain current business.
Absorb & integrate new business / acquisition / New products. Support expansion & growth across different locations.
To provide support for Global Supply Chain / Operation, if and when
required.
Manage & adapt to internal & external environmental change.
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This evolving structure should preserve the current advantages ofmanufacturing, flexibility, value propositions in terms of cost and quality, people
competence, autonomy & creativity.
ORGANISATION STRUCTURE
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Elements of Organizational Structure
Business Model
Business Objectives
(1 yr, 3 yrs, 5 yrs & long-term)
Strategy(What to do & how to do)
Structure
Roles, Responsibilities,
Objectives,
Accountability (RROA)
Staffing
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Performance Review,
Evaluation, Feedback, Training,
Rewards & Recognition
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Management
Development (Career
planning / succession
planning)
ANNUAL PLAN / POLICY DEPLOYMENT / PERFORMANCE MANAGEMENT SYSTEM
Company Annual Plan
Policy goals of the department heads
Execution through the PMS
(a). Performance Planning
(setting individual KRAs/goals of managers )
P
(b). Implementation &Monitoring
(like MIS, Coaching and Counselling, periodic
reviews and providing feedback )D
(c). Formal Performance Review through PA systems
( Quarterly, half yearly, annually)
(through Appraisal / Evaluation process / PRD)
C
CEO
HOD
A
Compensation
Review
Reward and
Recognition
Counseling T&D needs
identification
Managers
HODs
P = Plan D = Do C = Check A = Act 6
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Horizontal integration :-
Horizontal integration means aligning performance management strategies with other HR
strategies concerned with valuing, paying, involving and developing people.
PMS
InvolvingPeople
Developing
People
Valuing
People
Paying &
rewarding
people
Performance management as a focal point for integrated HR activities
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OC SS S O G S O
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PROCESS BASED ORGANISATION
( Process Matrix )
CUSTOMERS
CORPORATE GOALS
ORDER OBTAINMENT
GROUP
ORDER
FULFILMENT
NEW PRODUCT
DEVELOPMENT GROUP
(Marketing) (Supply Chain Group) (R&D)
PRODUCT MANAGEMENT GROUP
( 4 Ps Plus Interface with R&D, Field Sales Force, Production, QC, Processing,
Packing & Distribution)
PEOPLE DEVELOPMENT PROCESS / PROGRAM
(Performance Management System, Compensation System, Reward RecognitionSystem, Training & Development System)
FINANCE / ACCOUNTING
( Budgeting, Costing, Cash Flow,P & L, Balance Sheet, Taxation )
IT/ ERP
( MIS ,planning system, Order Processing ) 8
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4 Ps of Structure
Structure is made up of 4 Ps. They are as below:
Position Title / Designation, Level / Grade, Reporting
Relationships, Line of authority, Resources / facilities required etc.
Process (Part of a big system) Roles, Responsibilities,
Objectives & Accountability (Span of control in the process)
People Type / Quality of people, Experience, Competence etc.
Place Location of the position
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Structural Gap Identification
Steps:
Understanding and mapping the current structure Preparing what structure is ideally required / appropriate vis--vis
business strategy, plan, objectives (short-term & long-term)
Identify the gap between the two above in terms of 4Ps and
manpower ratios (Manager : Supervisor : Workmen)
Bridging the Gap
Internal incumbentthru training & development
External candidatethru recruitment process
Gap can be partial or full as given below:
Position exists but it is vacant
Position exists and the current incumbent is not 100% fit in terms
of competence
Position does not exist and therefore created as per gap analysis10
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Mapping the Current Structure
Structure to be mapped up to 3 - 4 levels at least i.e. -
Top / Sr. Management (Typical Directors / VPs)
HODs (Typical GMs / DGMs)
Managers (Typical Process / Sub-Process / Line Owners)
Supervisors (Shop floor Leaders/Field Leaders)
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Organizations Inputs
Organization obtains inputs
from its environment
Raw materials
Money and capital
Human resources
Information and knowledge
Customers of service
organizations
Organizations
Environment
Sales of outputs alloworganizations to obtain new
supplies of input
Customers
Shareholders
Suppliers
Distributors
Government
Competitors
Organizations Conversion
Process
Organization transforms
inputs and adds value to
them
Machinery
Computers
Human skills & abilities
Organizations outputs
Organization releases outputs
to its environment
Finished goods
Services
Dividends
Salaries
Value for stakeholders
How an Organization Creates Value
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Organizational Theory
The study of how organizations function and how they affect
and are affected by the environment in which they operate.
Organizational Structure
The formal system of task and
authority relationships that
controls how people are to
cooperate and use resources to
achieve the organizations goals.
Controls coordination and
motivation; shapes behavior of
people and the organization.
Is a response to contingencies
involving environment, technology,and human resources.
Evolves an organization grows
and differentiates.
Can be managed and changed
through the process of
organizational design.
Organizational Design and
Change
The process by which managers
select and manage various
dimensions and components oforganizational structure and
culture so that an organization can
control the activities necessary to
achieve its goals.
Balances the need of the
organization to manage external
and internal pressures so that it
can survive in the long run.
Allows the organization to
continually redesign and transform
its structure and culture to
respond to a changing global
environment.
Organizational Culture
The set of shared values and
norms that controls organizational
members interactions with each
other and with people outside theorganization.
Controls coordination and
motivation; shapes behavior of
people and the organization.
Is shaped by people, ethics, and
organizational structure.
Evolves as organization grows
and differentiates.
Can be managed and changed
through the process of
organizational design.
The Relationship Among Organizational Theory and Organizational Structure,
Culture, and Design, and Change
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Approaches to Measuring Organizational Effectiveness
APPROACH DESCRIPTION GOALS TO SET TO MEASURE
EFFECTIVENESS
External resource approach Evaluates the organizations ability to
secure, manage, and control scarce
and valued skills and resources
Lower costs of inputs
Obtain high-quality of inputs of raw
materials and employees
Increase market share
Increase stock price
Gain support of stakeholders such
as government or environmentalists
Cut decision-making time
Increase rate of product innovation
Increase coordination and
motivation of employees
Reduce conflict
Reduce time to market
Increase product quality
Reduce number of defects
Reduce production costs
Improve customer service
Reduce delivery time to customer
Internal systems approach Evaluates the organizations ability to
be innovative and function quickly and
responsively
Technical Approach Evaluates the organizations ability to
convert skills and resources into goods
and services efficiently
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Plant Structure
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Global Matrix Structure
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Global Product Group Structure
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Global Geographic Structure
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A Multidivisional Structure in Which Each Division Has a
Different Structure
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Link
http://localhost/var/www/apps/conversion/tmp/scratch_6/Structure.docxhttp://localhost/var/www/apps/conversion/tmp/scratch_6/Structure.docx7/29/2019 Organizational Design & Structure
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The Assignment of Product-Oriented Functional Teams to
Individual Divisions
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Head
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Multidivisional Structure
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Improving Integration in a Functional Structure by Combining Sales andMarketing
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B ildi Bl k f Diff ti ti
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Building Blocks of Differentiation
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Spans of Control
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T i l f f T i Ch M t
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Existing
Organization
HierarchyTeam Elements
Process
Action
Teams
(PATs)
Corporatecouncil
Support
Services
Directors / VPs /GMs
Managers
Workforce / staff
PAT / CFT
Typical forms of Teams in Change Management
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TOP
MIDDLE
SHOP FLOOR
Management
FACT BASE
EFFECTIVE UTILISATION OF PEOPLE POWER
Mission Strategic Planning New Products Quality systems Task Force CFT/SIT QCC Facilitation DRAM QC Circles TEIAN 5S
Total Employee Involvement
Effective
Communication is
the key
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THANK YOU
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