Download Unit 1b. Company Structure

Chapter One
Company Structure
• Organizational structure specifies the firm’s
formal reporting relationships, procedures,
controls, authority and decision-making
processes.
Compare & Contrast
• Characteristics
• Advantages
• Disadvantages
•
•
•
•
Simple
Functional
Multidivisional
Matrix
Organizational Circle: Moving back to flat
• The flat structure is common in enterprenerial
start-ups, university spin offs or small companies
in general. As the company grows, however, it
becomes more complex and hierarchical, which
leads to an expanded structure, with more levels
and departments.
Starbucks
Procter & Gamble
Toyota
Unilever
Team Structure
 One of the newest organizational structures developed in
the 20th century is team. In small businesses, the team
structure can define the entire organization.
• formed at the beginning of product development
process and continued throughout implementation
• speeds innovation and customer responsiveness
• stronger in highly dynamic industries
 Whole Foods Market
 Xerox
 Motorola
 DaimlerChrysler
Network Structure
 Another modern structure is network. While business
giants risk becoming too clumsy to proact, act and react
efficiently, the new network organisations contract out
any business function, that can be done better or more
cheaply.
• Core group of experts manages the outsourcing process
closely
• This forms a hub & spoke type of organization consisting
of many contracts
• Could create a control problem with contract
organizations
 H&M
.
Boundaryless structure
 The most radical concept in today's organisational
design is the concept of 'boundarylessness', which
seeks to overcome traditional boundaries between
layers of management (vertical), functional areas
(horizontal), as well as geographic boundaries.
Some claim the boundaryless structure is a
combination of team and network structures, with
the addition of temporariness.
 Ikea
Virtual Structure
 A special form of boundaryless organisation is virtual. It
works in a network of external alliances, using the
Internet. This means while the core of the organisation
can be small but still the company can operate globally be
a market leader in its niche. According to Anderson,
because of the unlimited shelf space of the Web, the cost
of creahing niche goods is falling dramatically. Although
none sell in huge numbers, there are so many niche
products that collectively they make a significant profit,
and that is what made highly innovative Amazon.com so
successful.
 Amazon.com
Organizational Structure
Slides 14-23 Extensive Reading Material
• Building blocks of organizational structure are:
– Differentiation - allocation of people to tasks
• vertical - distribution of decision-making
(levels)
• horizontal - distribution of functions
– Integration - coordination between people or
functions or divisions or companies.
– Differentiation + Integration = Bureaucratic
Costs (time spent in meetings, # of managers)
• Vertical differentiation:
• Reporting relationships that link people, tasks and
functions
– appropriate # of levels
– appropriate span of control
– determines if a structure is flat or tall
• Tall structures
– impede communication & coordination
– raise bureaucratic costs
– distort information (intentional & non-intentional)
– decreases motivation
– too many middle managers (structure begets structure)
• Vertical differentiation:
– Centralization:
– easier coordination of activities
– decisions fit organizational strategy
– speedy decision making
– Decentralization:
– reduces overload for TMT (can focus on
strategy)
– ee motivation & accountability increase
– fewer managers are needed - flatter
structure
Organizational Structure
• Horizontal differentiation
– The degree to which you separate tasks or skills
in the organization (specialization or
functionalization).
• Many organizational forms:
Functional
Mechanistic
Multi-Divisional
Matrix
Team
Network
?
Organic
Mechanistic vs. Organic
Feature
Task Definition
Mechanistic
Rigid and highly specialized
Coordination and Rules and directives vertically
Control
imposed
Communication
Knowledge
Flexible and less narrowly
defined
Mutual adjustment, common
culture
Vertical
Vertical and horizontal
Centralized
Dispersed
Commitment and To immediate supervisor
Loyalty
Environmental
Context
Organic
Stable with low technological
uncertainty
To the organization and its
goals
Unstable with significant
technological uncertainty and
ambiguity
• Common success criteria for organizational
structures are:
– Decentralized reporting
– Flat hierarchy
– High transient speed
– High transparency
– Permanent monitoring
– Rapid response
– Shared reliability
Sony Group Structure
1. New Group Headquarters to Function as Hub for Group Strategy
1)
2)
3)
a.
b.
Global Hub (GH) as Sony Group HQ
Management Platform for Global Staff Support
Electronics HQ for Related Businesses
Reorganizing Network Companies (NCs) for the broadband era
Introducing horizontal platform concept
•
2. Electronics Businesses Strengthened: Pursuing a Ubiquitous Value
Network
1) Developing Hardware for the Ubiquitous Value Network
2) Constructing a Network Platform
• Establishing a center to promote a common network platform for the entire group
3) Strengthening Internet/Communication Services
4) Creating New Forms of Entertainment to Integrate Hardware, Content and
Services
3. Network-Based Content Distribution: Key for Entertainment Business
and Financial Services
1)Broadband Entertainment Content
a. Digital distribution of films
b. Digital distribution of music
2) Development of Network Compatible Financial Services
a. Establishing a net bank
b. Electronic money service
Part II Reading:
Time for the big small company
– big small company
– … the dream is to marry the control of an established
company with the responsiveness of a start-up.
– Operating processes define how a company produces,
sells, distributes and supports its products and
services. (para.2)
– Management processes in such companies are also
hampered by the time it takes to recognize that
change is needed. (para.3)
– IT co-ordinates complex fast-cycle operating
processes and, more importantly, gives decisionmakers quick access to detailed, real-time
information about operations and market
performance. (para.5)
– Management processes in such companies are
also hampered by the time it takes to recognize
that change is needed. (para.3)
– IT co-ordinates complex fast-cycle operating
processes and, more importantly, gives
decision-makers quick access to detailed, realtime information about operations and market
performance. (para.5)
• Questions
– What are the advantages and disadvantages of
each company structure?
Hierarchical structure
• Advantages
– High level of control
• Disadvantages
– Workers lack the authority and motivation to
improve process.
– Management’s response time is slow.
– Only suitable for stable business environment.
Entrepreneurial structure
• Advantages
– Totally centralized authority and direct control
between owner and employees ensure
responsiveness to external changes.
• Disadvantages
– Only suitable for small companies
Information age structure
• Advantages
– Allows speed of response within a large complex
structure. Retains control but gives quick access
to information.
– Employees can constantly refine their actions and
strategies.
– Organization control is dynamic.
• Disadvantages
– Although IT makes all these advantages possible,
it cannot motivate people to use the information
they have.
Vocabulary
•
•
•
•
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•
•
•
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•
•
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Hierarchical company
•
Channels of communication •
Nimble
•
Responsiveness
•
Budgeting
•
Standardization
•
Hamper
•
Entrepreneurial organization •
Flexibility
•
Real-time
•
Refine
•
Agility
•
金字塔结构公司
沟通渠道
灵活的
快速应变
预算
规范化
妨碍
创业机构
灵活性
实时的
优化
敏捷
Questions for next calss
• Why do companies want to go public?
• Why do ordinary people buy stocks and
securities?
• What are indicators of stock market?