Similar resources are centralized in groups. Project Management Professional Certification Training, Certified Ethical Hacker Certification Training. The first disadvantage of this organizational structure type, is that people place more emphasis on their functional specialty to the detriment of the project. Lets get started by exploring the benefits of organizational charts. Copyright 10. For instance, for a software developer working in software development department, developer, senior developer, expert developer, and architect can be a career path as long as he improves his skills and competence. © Hierarchical structures tend to resemble pyramids, with the highest levels of power and authority at the very top. Duplication exists when work distribution is not clearly identified and the work is performed in a haphazard and disorganized way. Because all of these three organizational structures has advantages and disadvantages. It leads to the development of strong team-workand teams with identity fully with … Please respond to the discussion questions below – references must be provided Wk 4: Organizational Culture – Learning Activity 2A – $3.00 Created by Dvir Samet on Sep 15, 2016 The concept of a vision is so a company as a whole, leadership, management, employees, as well as the general public and customers understand the way for the future of the company, and the mission is … Prohibited Content 3. However, in a well organized company where the responsibilities are clearly established, this does not occur. 1. Since the lines of communication and flow of authority are clearly identified on the organizational chart, the inter­communication is both clearer and easier and it eliminates ambiguity. At the end of the project, if he leaves the organization, his know-how will be lost as well. Matrix organizations enable better coordination, better horizontal and vertical dissemination of information. A matrix structure is, strictly speaking, where we have multiple bosses – more than one formal reporting line, whether solid or dotted. "name":"Certification Courses", Did you take a look at our Certification Courses? If you want to learn more about these three types of organizational structures a detailed article can be found here. Responsibility is fixed.In this form of organization responsibilities are fixed and defined. 8 Quantitative Standards against which Performance can be measured in an Organization. Advantages of Organizational Charts. Some of the beneficial outcomes of optimally designed organizational structures are: While there are many different structures that organizations can adopt, depending upon the type of organization including whether it is a service organization or a manufacturing organization, a well structured organization has many benefits. Organizational Structures | What are the Advantages and the Disadvantages of Different Organizational Structures? It also helps employees understand what are their positions, who … Let's take a look at the advantages and disadvantages of each so you know what you're up against when you join a new structure. Organizational functions within an organization are Sales and Marketing, production, human resources, finance, Research & development, and Purchasing etc. The Matrix Organization Structure can deliver this, provided people have the skills to make the matrix work. Because resources specialized in one area, report to the same manager who knows the domain or area as well. Organizational Structure Type #1: Functional Organization. Divisional structure offers many advantages over functioned structure especially in terms of autonomy for efficient management, management development, increasing organizational size up to any limit, and taking into account of specific problems related with each product or territory contributing to the overall objectives of the firm. This method of assigning position and relative levels of power provides advantages and yields disadvantages. Because of a sense of belonging and high morale that a well-structured organization develops among employees and also because of clear-cut accountability, recognition of skill and appreciation for their contribution towards organizational growth, the employees develop their own initiative and a spirit of innovation and creativity. It may cause a lack of collaboration. This causes lack of professionalism in disciplines. Since a good organizational structure requires that the duties be clearly defined and assigned, such duplication of work is eliminated. Since the authority and the extent of exercise of such authority is known, it develops a sense of independence among employees which in turn is highly morale boosting. Importance or Significance of a Sound Organizational Structure! Project organization, based on team concept, is the best means of getting the right things done right. Matrix organizations need extensive policies and procedures. For instance, software developers belong to the IT department or sales specialists belong to the sales department. This causes project management to be underestimated by the staff. 1. For instance, if a software architect needs to support a project for only 2 days, he can be assigned to other projects or activities for the remaining days of the week. Because resources are grouped based on their specialties. Management issues may arise because it is more bureaucratic and the functional organization are not accountable to each other and the poor horizontal coordination within the department may occur. This causes duplication of the same testing tool for the 2nd project and means additional cost for the organization. Governments, militaries and many corporations employ this type of organizational structure. It creates a defined structure for communication. If there will be lots of projects to initiate, this will cause resource allocation problems respectively. It also helps employees understand what are their positions, who … Companies like a steady rudder, sailing smoothly into uncomplicated futures, but it often doesn't go that way. List of Advantages of a Flat Organizational Structure 1. The organizational structure, as the name suggests, affetcts the whole organization’s structure. A number of factors, including the rapid evolution of business models and the inevitability of change within organizations, demand that business leaders master the ins and outs of organizational change. It Is Cost Efficient As mentioned, in this organizational structure, there are fewer (or no) manager layers between the executive and the staff. Matrix organizations keep the power and influence of functional and project managers in balance. Advantage – Clear Paths of Advancement. The last advantage of this type of organizational structure is that team members maintain a home. Or when a new project is initiated, they can be re-assigned to new projects. Because there will be two managers of a resource: functional manager and project manager. Below are some merits and advantages of line organization or vertical organization 1. Also, there will be several resources from different functional disciplines in a project. Projectized organizations use resources less efficiently. Advantages of Functional Organizational Structure The employees are made into groups according to their skills, and thus the overall effectiveness and efficiency of the tasks increase. It is an effective way of producing highly complex product systems. Because team members of the project are reporting to the project manager as well and this gives respective authority to the project manager. 3. TOS 7. Organizational structure is extremely important during a business. An example often used to exemplify flat structure is Valve, a software developer in which employees can freely move between projects and initiate projects of their own. Since project resources are dedicated to a project, even if this resource is not 100% utilized, they cannot be allocated to another task. Perhaps the biggest advantage of a matrix structure … An advantage of a divisional structure is that each division can operate as a separate, self-sufficient unit without having to rely heavily on the parent company or … There is more support from functional areas. The advantages and disadvantages of a matrix organizational structure make it easier to move resources to the most important projects which need to be completed. The advantage of this horizontal organizational structure is that it allows decisions to be made faster. 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