Matrix organization or project management organization, has long been practiced in industry, its distinguishing feature is that it may operate alongside any other basic type of internal organization. Under matrix organization, special projects can be accomplished while a company's basic operations continue. Sometimes such projects conflict with normal operations, but this is recognized and accepted as part of matrix organization.
The responsibility for guiding projects through to their completion is given to a project manager, who usually has authority over all departments necessary to the project. Conflict is resolved by the amount of authority given to the project manager, which depends on how important the special project is.
Matrix organization has received great attention because of the demands of our space program and the needs of our defense department. For example, a factory that is building a space capsule cannot stop all other operations for that one project. Instead, the work is made a special project, and a project manager is assigned to direct the construction of the capsule as it moves from department to department. If a project is important enough, other work in the department will be put aside until the special project is completed.
Automobile factories often use matrix organization to develop models of new cars. For example, General Motors developed its Chevrolet Vega as a special project that was conducted by normal operating departments. Many other types of businesses also use matrix organization to develop new or experimental products or designs. In fact, President Franklin Roosevelt named his famous DC-3 airplane the Sacred because he had heard that that's what employees of Douglas Aircraft called it as it moved through the factory as a special project. The production of this presidential airplane was a perfect example of matrix organization.
Although there is no single way to show the many departmental interrelationships that may exist when matrix organization is used with line or line and staff arrangement. Basically, matrix organization involves authority across departmental lines, while other types of organization involve authority that flows from the top down.
Friday, December 23, 2011
Possible Disadvantages of Functional Organization
1. Every employee has more than one boss; it violates unity of command.
2. Discipline is less effective because employees have several bosses.
3. Conflicts among supervisors may result.
4. The development of high-level managers is limited to special areas, making them less effective overall managers.
2. Discipline is less effective because employees have several bosses.
3. Conflicts among supervisors may result.
4. The development of high-level managers is limited to special areas, making them less effective overall managers.
Advantages Claimed for Functional Organization
1. Supervisors are specialist who have the opportunity to develop greater expertise in their particular fields.
2. Expert advice is directly available to each employee.
3. Every function of the firm receives superior handling.
2. Expert advice is directly available to each employee.
3. Every function of the firm receives superior handling.
Monday, December 19, 2011
Functional Organization
Whenever a firm's total work is divided into such basic areas as production, marketing, and finance, it is using a functional organization. Usually, however, the authority of a division head is limited to that division or that function; in all other areas, line or line and staff authority is retained. So we need more accurate definition of functional organization.
In pure functional organization, authority and responsibility are assigned over processes or functions in several or all departments of the firm. Thus, functional managers supervise employees in several or all departments. The main feature of functional organization is that each employee has more than one boss - maybe several. This, of course, violates that sound and important one-boss principle, or unity of command. But the practice is being tried by many firms in American industry as the need for expertise grows.
Under functional organization every employee, except top executives, may have different supervisors for such areas as personnel management, quality control, inventory control, payrolls and vacations, promotions, and transfers. These supervisors are specialists in their particular fields, and they have broad supervisory power over many or all departments of the firm. They issue orders and directives in their own name, rather that through line managers. As a result, it is easy for an employee to receive conflicting instructions.
An example of functional organization can be found in the authority and responsibility that may be given to the personnel department. Under line or line and staff organization, the personnel department works through the employee's immediate supervisor - his or he one boss. But under functional organization, the personnel department has authority and responsibility to deal directly with each employee on all matters of employment; the line supervisor is overlooked. As noted above, still other supervisors may be established for other aspects of an employee's total work. A factory employee could review several orders from the different supervisors of quality control, production, sales, maintenance, and other areas.
It is interesting to note that Frederick W. Taylor, the father of scientific management, established the first functional organization in the early 1900s. Under his plan, each factory worker had eight different supervisors. This proved unsuccessful because it divided the work beyond a useful point. In fact, may large firms that have experimented with pure functional organization have returned to line and staff arrangements. obviously, it is difficult to void misunderstandings and conflict under functional organization, and a strong administration is needed to make it work. Even so, some business theorist favor it because it provides the expertise needed in today's complex world.
In pure functional organization, authority and responsibility are assigned over processes or functions in several or all departments of the firm. Thus, functional managers supervise employees in several or all departments. The main feature of functional organization is that each employee has more than one boss - maybe several. This, of course, violates that sound and important one-boss principle, or unity of command. But the practice is being tried by many firms in American industry as the need for expertise grows.
Under functional organization every employee, except top executives, may have different supervisors for such areas as personnel management, quality control, inventory control, payrolls and vacations, promotions, and transfers. These supervisors are specialists in their particular fields, and they have broad supervisory power over many or all departments of the firm. They issue orders and directives in their own name, rather that through line managers. As a result, it is easy for an employee to receive conflicting instructions.
An example of functional organization can be found in the authority and responsibility that may be given to the personnel department. Under line or line and staff organization, the personnel department works through the employee's immediate supervisor - his or he one boss. But under functional organization, the personnel department has authority and responsibility to deal directly with each employee on all matters of employment; the line supervisor is overlooked. As noted above, still other supervisors may be established for other aspects of an employee's total work. A factory employee could review several orders from the different supervisors of quality control, production, sales, maintenance, and other areas.
It is interesting to note that Frederick W. Taylor, the father of scientific management, established the first functional organization in the early 1900s. Under his plan, each factory worker had eight different supervisors. This proved unsuccessful because it divided the work beyond a useful point. In fact, may large firms that have experimented with pure functional organization have returned to line and staff arrangements. obviously, it is difficult to void misunderstandings and conflict under functional organization, and a strong administration is needed to make it work. Even so, some business theorist favor it because it provides the expertise needed in today's complex world.
Line and Staff Organization
With large-scale business operation, the complexities of management raise the need for full-time specialists who can give advice about certain key areas. Line and staff organization seeks to keep all the advantages of line organization while adding advisory specialists to the staff in certain areas. These advisory specialists do not have line authority or subordinates to whom they issue orders. Instead, they provide top management with the expertise needed for making decisions in special areas.
The need for experts to become full-time staff members was first recognized in the areas of legal operations and personnel administration: these needs were filled by advisory experts. In today's business world most large firms also have staff experts in such areas as government regulations, international trade, industrial relations, procurement, economics, credit administration, budget control, and corporation taxes.
Modern organization theory often distinguishes among these types of specialized staff: advisory, service, and control.
1. Advisory staff experts are responsible for advising top management and line managers about business procedures in their particular areas of expertise. Example include the legal staff and the industrial relation staff.
2. Service staff experts perform specific work for departments throughout the organization. For example, the purchasing department may be responsible for buying all materials used in the organization. Similarly, the personnel department may have authority to make final decisions about hiring, rather than the department is a service staff group, since it is performing (hiring) for other departments.
3. Control staff experts regulate some of the activities of others in the firm. For example, the budget administrator must determine that a department's request for expenditures are within its approved budget. If they are not, the expenditure is not approved. In the same way, the controller usually has the power to accept or refuse request for special funds. In such a case, the control staff is not giving orders but is merely enforcing the wishes of top management, which has delegated authority to the control staff.
This in line and staff organization, full-time staff specialists may have advisory, service, or control relationships with officers of other departments. But remember that these specialists do not have basic line authority; their relationship to other departments is advisory, as indicated by the dashed line.
The need for experts to become full-time staff members was first recognized in the areas of legal operations and personnel administration: these needs were filled by advisory experts. In today's business world most large firms also have staff experts in such areas as government regulations, international trade, industrial relations, procurement, economics, credit administration, budget control, and corporation taxes.
Modern organization theory often distinguishes among these types of specialized staff: advisory, service, and control.
1. Advisory staff experts are responsible for advising top management and line managers about business procedures in their particular areas of expertise. Example include the legal staff and the industrial relation staff.
2. Service staff experts perform specific work for departments throughout the organization. For example, the purchasing department may be responsible for buying all materials used in the organization. Similarly, the personnel department may have authority to make final decisions about hiring, rather than the department is a service staff group, since it is performing (hiring) for other departments.
3. Control staff experts regulate some of the activities of others in the firm. For example, the budget administrator must determine that a department's request for expenditures are within its approved budget. If they are not, the expenditure is not approved. In the same way, the controller usually has the power to accept or refuse request for special funds. In such a case, the control staff is not giving orders but is merely enforcing the wishes of top management, which has delegated authority to the control staff.
This in line and staff organization, full-time staff specialists may have advisory, service, or control relationships with officers of other departments. But remember that these specialists do not have basic line authority; their relationship to other departments is advisory, as indicated by the dashed line.
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