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THE HP WAY
• HP leading computer company.-(1992)
• Profitable company compared to competitors
• No mergers, no joint ventures.
• New CEO Platt’s Vision-in Digital revolution.
• Objectives- restructure to improve profitability,
Customer satisfaction
Enlighten management in company culture.
• Reengineering team for to spruce up new products
and restructure.
What is Organising?
• Social unit or human grouping deliberately
structured for purpose of attaining specific
goals.
Departmentation
Disadvantages
Advantages
•De- emphasizes overall objective.
•Development of expertise
•Narrow view point of key persons
•Clear career path within function
•Reduction in co-ordination.
•Simplifies training
•Responsibility of profit at Top
•Furnishes means of Tight control at top.
•Slow adoption to changes.
2. PRODUCT/MARKET
PRESIDENT
Hewlett Packard
PRESIDENT
GM GM GM GM GM
NORTH INDIA SOUTH INDIA EAST INDIA WEST INDIA CENTRAL INDIA
Advantages Disadvantages
•Responsibility at a lower level. •More persons with manager ability.
•Emphasis on local market & Problems. •Increases problem at top level.
•Improves co-ordination in a region. •Tends to make maintenance of central
•Better face to face communications. services difficult.
VICE PRECIDENT
Advantages Disdvantages
VICE PRESIDENT VICE PRESIDENT
Industrial Consumer Military
•Focus on Customer needs. •May be difficult to coordinate operations
between competing customer demands.
•Gives customer a feeling that they have
an understanding supplier.. •Requires managers & staff expert in
customer problems.
•Develops expertness in customer area.
•Customer groups may not be always
defined
5. PROCESS
PLANT SUPRITENDENT
Advantages Disadvantages
Assistant
ADMINISTRATION
HR
LEGAL OFFICERS
AUDITORS
Business/
Project/ Engineering/R& Production Marketing Finance
Venture D Specialists Specialists Specialists Specialists
Manager 2
Business/
Project/ Engineering/R& Production Marketing Finance
Venture D Specialists Specialists Specialists Specialists
Manager 3
Business/
Project/ Engineering/R& Production Marketing Finance
Venture D Specialists Specialists Specialists Specialists
Manager 4
MATRIX ORGANISATION
• Advantages
– teamwork
– efficient use of resources
– flexibility
– ability to balance conflicting objectives
– higher performance
– opportunities for personal and professional growth
• Disadvantages
– power struggles
– confusion among team members
– lack of cohesiveness
DELEGATION OF
AUTHORITY
• Power & Authority.
Process
• Assigning Responsibility.
• Granting Authority.
• Creating Accountability.
DELEGATION OF
AUTHORITY
ADVANTAGES
Maximum effectiveness of Organization.
Improvement of self confidence & high morale.
willingness to take initiative.
Better & Speedy decisions
Simplifies problem of management succession
DECENTRALISATION
The process of pushing decision-making
authority down the organizational hierarchy,
giving lower-level workers more responsibility
•History of organization
•Philosophy of organization
•Availability of competent subordinates
•Dispersal of operations (Geographically).
•Size of organization.
•Degree of diversification.
DECENTRALISATION
DEGREE OF CENTRALIZATION
DEGREE OF DECENTRALIZATION
•Ability of Subordinates.
•Nature of Work
•Degree of team work.
•Faith & trust in Subordinates
Factors Determining
Effective Spans
[ ]
n 2(n-1)+n-1
250000
200000
Relationships
150000
For n=1, 1 relationship
100000
n=2, 6 relationships
50000
n=3, 18 relationships
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Number of Subordinates
TALL ORGANIZATION
NARROW SPAN
FLAT ORGANIZATION
WIDE SPAN
Competitive scenario
No long chain of command-Cant afford to take months for decisions.
HP-computers and scientific instruments each with own sales force.
Downsizing
Contrasting Spans of Control
(Highest) Assuming Span of 4 Assuming Span of 8
1 1 1
Organization Level
2 4 8
3 16 64
4 64 512
5 256 4,096
6 1,024
7 4,096
Span of 4: Span of 8:
4,096 Operatives. 1,365 Managers 4,096 Operatives. Only 585 Managers!
INFORMAL
INFORMAL ORGANISATION
• The network of connections and channels of
communication based on the informal relationships of
individuals inside an organization
FUNCTION
• Friendships and social contact
f. Vertical
Information
1.BASIC System.
MANAGEMENT i. Lateral
TECHNIQUE Relationships.
d. Management
Hierarchy.
f. Rules & 3. REDUCE
Procedure. NEED FOR
h. Plans & Goals. COORDINATION
f. Slack
Resources
h. Independent
1.MBWA Units.
2.BOUNDRY SPANNING ROLE
TRENDS IN ORGANISATION
• Virtual corporation
– technology
– opportunism
– excellence
– trust
– no borders
• Structural issues for global mergers