Methods of constructing organizational structures

Kuznetsov. Fundamentals of management

There are the following methods of construction of organizational structures:
1. The division of functions;
2. Separation of products;
3. The division into groups of consumers;
4. The division into stages of production;
5. The division of shifts;
6. The division of geographical position;
7. The combined division.
1. Method of separating the functions. According to this method, the formation of administrative units is carried out by functions of the enterprise. This means that functions such as procurement, production, marketing, personnel and financial matters, etc., has its own management unit. Each such unit centrally performs its functions at the level of the entire enterprise, including internal departments and remote branches. It should be noted that every enterprise has its own organizational names of basic functions. For example, at some enterprises of the supply function and the production management unit are called production control. In small companies the technical management can realize the functions of production, logistics, personnel, or functions of logistics and implementation are carried out by the unit under the name of commercial management. In large enterprises this allocation is rare, as they each function creates its own management unit. In General we can say that taking into account the specifics of each business divisions and management services are divided into the following main groups: technical, support, commercial, economic, administrative and management functions of the social development of the production team. With regard to the formation of under - razdelennyh management units, the process uses the same methods or any other that meets the specific conditions and goals. For example, if the organization of foreign trade Department is based on the fact that the execution of foreign trade contract is the most important for producing simple engineering products, it is possible to use the functional principle to separate the functions of the office into three main groups: preparation for export and work on the market; exports; regulate and control exports.
There is no doubt that the nature of the activities of the enterprise, its objectives and the strategy determines the nature of the functions and their number. For example, the extraction of profit requires study of the market and competitors. To improve the quality of products is necessary to conduct technical studies. The advantages of the method of separation of the functions of the following:
- allocation of the relative importance of each management function;
- the use of specialization and its benefits;
- high degree of consistency and control within a specific function and the possibility of a unified approach to the solution of any problem associated with this function.
The disadvantages of this method are:
- complexity of coherence and coordination between different functional departments;
- difficulty of centralized control over administrative functions, especially if they are distributed on various geographical areas;
- extension of management functions makes the selection the appropriate Manager, as it should have wide specialisation, which in turn will hamper his official promotion.
However, these problems, while not insurmountable, do not detract from the value of this method.
When using the method of separation of functions must be taken into account to solve the above problems, based on specific conditions of a certain company.
Thus, all structural subdivisions of the management body are combined into a chain of major groups (blocks):
The first structural unit in charge of facilities management. The main problem with this do not exceed the scope of control, on the one hand, and to create a dwarf unit to guide a small number of objects on the other;
The second basic structural functional units (planning, monitoring);
The third group of units in charge of intersectoral economic functions (supply, marketing, capital construction, scientific and technological progress, labor and personnel, Finance, etc.);
Fourth — auxiliary and service units (office, archive, etc.);
The fifth is the leadership (the head of the body), his deputies, the various management units on Board, Bureau, Council, etc.
2. Method of separating products. Practiced production enterprises, specializing in the production of various types of products using various raw materials and equipment. The division of the product depends on technology, transportation and functionality. Thus, each management unit specializiruetsya on a specific product or group of products. This unit performs the functions of production, procurement, implementation, funding, etc., but independently of other management units. The same method is used for the formation of units within the data units, and especially for the formation of sales branches.
For example, a branch at the machine tool plant can have specialized product groups in the export of universal and special machines, as well as for their maintenance.
The main advantages of the method is the effective implementation and quality of production, coordination, coherence and use of the advantages of specialization. Disadvantages of the method are as follows:
- the independence of one unit from the other leads to duplication of functions and complicates the coordination of their activities;
- do not use the advantages of specialization on the level of the entire enterprise;
- specialization of the head of the management unit complicates the management of the different functions of the unit.
3. Method of separating the groups (categories) of consumers. Used in enterprises, dealing with different groups of consumers. Every management unit specializiruetsya on a specific group of users and carries out the necessary functions. Most often this method is used for the formation of management units that carry out functions such as logistics, product development, production, advertising, implementation etc. in accordance with the requirements of each consumer group. This method provides an efficient distribution of the finished products of the enterprise, allows you to recruit professionals and to plan their work in accordance with the requirements of any group of consumers to coordinate actions within the same unit. This method also has disadvantages such as difficulty of coordination between different management units, inability to use advantages of the same functions and appearance of various kinds of contradictions.
4. Method of separating the stages of production. Applied to industrial enterprises where the production process of any product occurs in several stages. This gives the possibility of formation for each step in the appropriate management unit that performs all the necessary functions independently of the other units. For example, the company fabric production process is divided into steps such as spinning, weaving, preparation for dyeing, dyeing. For each stage it is possible to create corresponding independent management unit. This method allows you to more fully use the capabilities of employees, equipment, machines, improve the production process and to coordinate activities within any stage.
Here also reached a high degree of direct control. In the process of any phase detected by the previous substandard work without direct control. The disadvantages of this method include the difficulty of coordinating the activities of the management units of different stages because of the interdependence of the stages from each other. Specialization of the head unit makes it difficult for him to control all functions.
5. A method of dividing working shifts. The majority of manufacturing enterprises apply shift work, especially at such companies where it is necessary for the requirements of the market or due to the nature of the production process. Management functions shifts differ from each other to a greater or lesser extent. The work is divided into day, evening and night shifts. Leads the shift Manager, who reports to the Director General. The administrators for each shift have their functions and programme of work, which may differ from other management units, depending on the specific conditions of the work shift requirements. This method is used in the organization of production management.
6. Method of separation according to geographic location. In accordance with this method each plant or branch of any company is treated as an independent management unit, performing all the necessary functions. Administrative division and distribution of work is done on the basis of internal conditions, without the intervention of the Central leadership, except when the decision of specific matters within the competence of the Central administration. Such issues can be logistics, financing, advertising etc. the advantages of this method include the following:
- organization of work taking into account local conditions, which facilitates the work and increases the quality;
- the consistency and speed of operation of the branch; the lack of bureaucratic obstacles, which are characteristic for solutions of the Central administration, leading to unnecessary losses of time and money;
- helps promote branch managers to more senior posts.
There is no doubt that this is the most suitable method for distribution of work by geographic areas. However, extremes in the application of this method lead to the fragmentation functions for the branches, which is the cause of the weakening of coordination of activities, reducing the role of the Central office and its authority, as well as the loss characteristics of the specialization of functions at the level of the entire enterprise.
Separation of functions on a geographic basis are more suitable for the formation of foreign trade offices. For example, it is possible thus to divide the foreign trade Department at the markets in different countries taking into account specificity of the market in each country for this product.
7. Method of combined separation. As the consolidation of the organization, increasing its administrative functions, scale-up activities application of any one of the method becomes insufficient. In such cases different methods are applied. At the same time use the advantages of each method and avoid its shortcomings, provides the most effective functioning of organizational structures of management. For example, simultaneously using the method of separating the stages of production of such functions as Finance and procurement, are within the competence of the Central administration, which decides them at the level of the entire enterprise.
Most modern firms in the formation of organizational structures of management use different methods of separation that avoids the drawbacks of the individual methods, to effectively use their advantages and to be more flexible with further adjustment to the goals and strategy of the company, changes in conditions etc Division the organizational structure of any organization based on such methods as separation by geographic location, by type of product, stages of production, groups of consumers in accordance with the specific conditions of the enterprise. This allows you to use the scientific principles of construction of organizational structures.