1000 Business Lessons Every Businessman Must Know

Chapter 40 Organizational Structure: Supporting the Smooth Operation of the Enterprise (2)
The degree of formalization varies widely between organizations or between jobs within organizations.At one extreme, certain jobs are known to have low levels of formalization, such as university booksellers (a publisher's agent who sells a company's new book to university professors) with greater freedom of work and less uniformity in their marketing language .In terms of behavioral constraints, it is nothing more than submitting a sales report once a week and making suggestions for the publication of new books.At the other extreme are those who are staff and editors in the same publishing company.They have to go to work on time at 8:[-] a.m., otherwise they will be deducted half an hour of wages, and they must abide by a series of detailed rules and regulations formulated by the management.

[-]. Content of organizational structure
309. Setting up of units, departments and positions

The setting of organizational units, departments and positions of an enterprise is not to divide an enterprise organization into several parts, but that an enterprise, as an organization serving a specific goal, must be composed of several corresponding parts, just like a person needs feet to walk .

It is not divided from the whole to the parts, but the whole must have different parts in order to achieve a specific goal.This relationship cannot be reversed.

310. Defining the responsibilities and powers of each unit, department and post.

This is the definition of the target function of each part.If a certain component does not have an indispensable target function, it will shrink and disappear just like a human tail.

This definition is a division of labor, but it is a division of labor within an organism.The mouth is used for eating as well as for breathing.

311. Defining the relationship between units, departments and job roles.

This is to define how each part coordinates, cooperates, supplements, and replaces each other when it functions.

These three problems are closely linked, while solving the first problem, the latter two problems have actually been solved.But as a major work, the three have a relationship of succession to each other.We want to conduct a normative analysis of the organizational structure, focusing on the first question, and the latter two questions are further developments on the first question.

[-]. Organizational structure
312. Linear system

The linear system is one of the earliest and simplest forms of organization.Its characteristic is that the administrative units at all levels of the enterprise implement vertical leadership from top to bottom, and the subordinate departments only accept the instructions of one superior, and the responsible persons in charge at all levels are responsible for all problems of the subordinate units.

The company does not set up another functional organization (functional personnel can be set up to assist the supervisor), and all management functions are basically performed by the administrative supervisor himself.

The advantages of the linear organizational structure are: relatively simple structure, clear responsibilities, and unified orders.

The disadvantage is: it requires the administrative person in charge to be proficient in various knowledge and skills, and handle various businesses in person.It is obviously incompetent to concentrate all management functions on one top executive when the business is relatively complex and the scale of the enterprise is relatively large.

Therefore, the straight-line system is only suitable for small-scale enterprises with relatively simple production technology, and it is not suitable for enterprises with relatively complicated production technology and management.

313. Functional system

The organizational structure of the functional system is that administrative units at all levels set up some functional agencies in addition to the person in charge.

For example, set up functional organizations and personnel under the manager to assist the manager in functional management.This structure requires the administrative supervisor to hand over the corresponding management responsibilities and powers to the relevant functional agencies, and each functional agency has the right to issue orders to the lower administrative units within the scope of their own business.Therefore, in addition to accepting the command of the higher-level administrative person in charge, the person in charge of the lower-level administration must also accept the leadership of the various functional agencies at the higher level.

The advantages of the functional system are: it can adapt to the complex production technology and fine management characteristics of modern industrial enterprises; it can give full play to the professional management role of functional organizations and reduce the workload of line leaders.

The disadvantages are: it hinders the necessary centralized leadership and unified command, and forms a multi-headed leadership; it is not conducive to the establishment and improvement of the responsibility system of administrative heads at all levels and functional departments. In addition, when there is a conflict between the guidance and orders of the superior administrative leadership and the functional organization, the subordinates will be at a loss, which will affect the normal progress of work, easily lead to lax discipline and disordered production management.Due to the obvious defects of this organizational structure, modern enterprises generally do not adopt the functional system.

314. Straight line - functional system
The straight-line-functional system is also called the production area system, or the straight-line staff system.It is established on the basis of the linear system and the functional system, learning from each other and absorbing the advantages of these two forms.

At present, most of our enterprises adopt this form of organizational structure.This form of organizational structure divides enterprise management institutions and personnel into two categories, one is straight-line leadership institutions and personnel, which exercise command power over organizations at all levels according to the principle of unified order; the other is functional institutions and personnel, which are classified according to specialization Principles, engaged in the management of various functions of the organization.

Line leading organizations and personnel have a certain decision-making power within the scope of their duties and command power to subordinate subordinates, and take full responsibility for the work of their own departments.The functional organizations and personnel are the staff of the direct command personnel, and cannot issue orders to the direct departments, but can only provide business guidance.

The advantage of the line-function system is that it not only ensures the centralized and unified enterprise management system, but also can give full play to the role of each professional management organization under the leadership of administrative leaders at all levels.

The disadvantage is that the coordination and cooperation between functional departments are poor, and many tasks of functional departments must be directly reported to the upper-level leaders for instructions. This increases the workload of the upper-level leaders;In order to overcome these shortcomings, various comprehensive committees can be established, or various conference systems can be established to coordinate the work of all aspects, play a role in communication, and help senior leaders make suggestions.

315. Division system
The divisional system was first proposed by President Sloan of General Motors in 1924, so it is called the "Sloan Model", also known as "Federal Decentralization".It is a decentralized management system under a high degree of (level) centralization.It is suitable for large enterprises with large scale, various varieties and complicated technology. It is an organizational form adopted by large foreign joint companies. In recent years, some large enterprise groups or companies in my country have also introduced this organizational structure form.

The business division system is a form of hierarchical management, hierarchical accounting, and self-responsibility for profits and losses. That is, a company is divided into several business divisions by region or by product category, from product design, raw material procurement, cost accounting, product manufacturing, to product sales. , are all in charge of the business department and its affiliated factories, which implement separate accounting and independent operation. The company headquarters only retains the power of personnel decision-making, budget control and supervision, and controls the business department through profit and other indicators.

There are also business divisions that are only responsible for directing and organizing production, not procurement and sales, and separate production from supply and marketing. However, such divisions are being replaced by product divisions.Other divisions are divided by region.

316. Simulation of decentralization

This is a structural form between the linear functional system and the business department system.

Many large enterprises, such as continuous production of steel and chemical enterprises, are difficult to decompose into several independent business divisions due to the limitation of product variety or production process.And because of the large scale of the enterprise, the top managers feel that it is not easy to manage by adopting other organizational forms. At this time, the organizational structure of simulated decentralization appears.The so-called simulation is to simulate the independent operation of the business division system and separate accounting, rather than real business divisions, which are actually "production units" one by one.These production units have their own functional organizations, enjoy as much autonomy as possible, and bear "simulative" profit and loss responsibilities. The purpose is to mobilize their enthusiasm for production and management, and achieve the purpose of improving the production and management of enterprises.It should be pointed out that due to the continuity of production, it is difficult to completely separate the various production units. Take the continuous production of petrochemical industry as an example, the "product" produced by unit A directly becomes the raw material of production unit B. There are no stops and stops.Therefore, the economic calculation between them can only be based on the internal price of the enterprise, not the market price, that is to say, these production units do not have their own independent external market, which is also the difference from the business department.

The advantages of the simulated decentralization system: In addition to mobilizing the enthusiasm of each production unit, it is to solve the problem that the scale of the enterprise is too large and difficult to manage.Top management delegated some authority to the production units, reducing their own administrative tasks and concentrating on strategic issues.

The disadvantages are: it is not easy to define tasks for the simulated production units, resulting in difficulties in assessment; it is not easy for the leaders of each production unit to understand the overall picture of the enterprise, and there are obvious defects in information communication and decision-making power.

317. Matrix System

In terms of organizational structure, a structure that has both a vertical leadership system divided by function and a horizontal leadership relationship divided by product (project) is called a matrix organizational structure.

The matrix organization is an organizational form formed to improve the shortcomings of the linear functional system, such as poor horizontal connections and lack of flexibility.Its characteristics are manifested in the establishment of a specialized organization of cross-functional departments around a specific task, such as forming a special product (project) team to engage in new product development work, in the different stages of research, design, testing, and manufacturing. The department sent people to participate, and tried to achieve a combination of rules and regulations to coordinate the activities of relevant departments and ensure the completion of tasks.This kind of organizational structure is fixed, but the personnel are changeable. Whoever is needed will come, and they can leave after the task is completed.Project teams and leaders are also temporarily organized and appointed.After the task is completed, it will be disbanded, and the relevant personnel will return to work in the original unit.Therefore, this organizational structure is very suitable for horizontal collaboration and research projects.

The advantages of the matrix structure are: mobility and flexibility, and can be organized or disbanded with the development and end of the project; since this structure is organized according to the project, the tasks are clear and the purpose is clear, and people with expertise in all aspects are prepared. .Therefore, in the new working group, they can communicate and integrate, can link their own work with the overall work, and offer suggestions to overcome difficulties and solve problems. Because the personnel drawn from all aspects have a sense of trust and honor, It increases their sense of responsibility, stimulates their enthusiasm for work, and promotes the realization of the project; it also strengthens the cooperation and information exchange between different departments, and overcomes the disconnection of various departments in the linear functional structure.

The disadvantage is that the responsibility of the project leader is greater than the power, because the personnel participating in the project come from different departments, and the affiliation relationship is still in the original unit. Punishment means, this kind of dual management of personnel is the inherent defect of the matrix structure; since the project team members come from various functional departments, they still have to return to the original unit after the task is completed, so it is easy to have temporary ideas and have a certain impact on the work.

The matrix structure is suitable for some major research projects.Enterprises can be used to complete extensive, temporary, complex major engineering projects or management reform tasks.It is especially suitable for development and experiment-oriented units, such as scientific research, especially applied research units.

(End of this chapter)