a) contingency factor to consider when designing org strcture.
b) the design elements .
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1) Design elements.
1.1 ) Design element - formalisation
1.2) Design element - work specialisation.
1.3) Design element - chain of command
1.4) Design element - span of control
1.5) Design element - centralisation
1.6) Design element - departmentalisation.
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When we design an organisation structure , the factors we consider :
Macro environment
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Dynamic/stable
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Competition
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Market
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Diverse/integrated
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Staff size
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Large/small
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Nature of work
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Routine/non-routine, simple/complex
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Biz strategy
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Differentiation/Low cost
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Key design elements :
a) Work specialisation : high/low .
high specialisation : ie one job is divided into different tasks, each task done by different people.
eg : car assembly line : to assemble one car (a job), it is done by different people, each done a different task (eg : put in the car engine, put on the front screen, put on the back screen, put on the car doors).
Usually the task is repetitive.
b) low specialisation :
one job(serve the customer - with different tasks) is done by one person.
example : in a small cafe, the waiter may have to take order, help with preparing the food, serve the food, accept payment, clean the table.
compare this to a crew in McDonald.
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b) FORMALISATION - high/low
whether the job/task is highly structured/ have a standard/strict way of performing it.
Example :HIGH FORMALISATION : a door man at a 5 start hotel is usually highly formalised - ie the door man is trained to greet the guest with a standard greeting, bowing , receiving the guest.
EXAMPLE : LOW FORMALISATION : the sales executive in a small retail shop - different sales staff may greet, serve the customers in different ways.
Advantage : seem informal, homely, but service standard vary with staff experience/character/mood.
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CHAIN OF COMMAND : strict/flexible
in the organisation , who report to whom or how communication is done.
in Japanese/Korean company/culture, who report to who is strictly regulated/followed.
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SPAN OF CONTROL : wide/narrow.
-the number of people reporting to the manager.
- wide - more people reporting to the manager .
- narrow - less people reporting tot the manager.
Ideal span of control - 5 to 7 people.
Wider span of control - lower cost, but less time to help each staff, suitable if task is simple/routine.
Narrow span of control - high cost, more time for each staff, necc. if task is varied and complex ,more decision is needed to be decided by manager.
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CENTRALISATION - high or low.
the number of people who can make decision.
High - smaller number of people can make decision,
disadvantage : slower decision making process,
advantage : high control, more consistent decision made in the organisation.
Low - decision is made by a large number of people , at different level.
advantage - decision making is faster and customer is served better.
disadvantage - the same problem/issue may have different decision made because different people have different ways of making decision, it can be confusing for the customers.
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DEPARTMENTALISATION :
How the jobs are group together.
- by geographical (ie by countries or region) eg Asia Pacific, Americas, South East Asia, US, China etc.
- by functions (ie the work done by emloyees)
eg : finance, engineering, research and development, marketing.
- by customers type (eg retail customers, corporate customers, government customers)
eg : all sales man selling to retail customers ( ie individual buying for own use) are group under one department - retail sales customer department.
all salesman selling to government division, department are group under one department - government business sales department.
Why : selling to retail, business and government have different process , needs.
eg : retail customer - interested in more discounts, more free gift, business customer - look for reliability of product, support for product. etc.
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