Management Control and

Information Systems
Chapter 5:
Organization Structure

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

1
School (IBS) Hyderabad
Network Organizational Structure
In network structures, organization is structured on the
basis of network requirements. With the advent of
Information Technology, the network structures have
emerged as a new form of organization structure. Most
Information Technology firms are organized around
network.

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

2
School (IBS) Hyderabad
Network Organizational Structure

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

3
School (IBS) Hyderabad
Network Organizational Structure
Advantages:

Healthy competition: The arrangement and

characteristics of a networked organization promote
healthy competition, collaboration, and innovation among
employees.

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

4
School (IBS) Hyderabad
Network Organizational Structure
Advantages:

Focused plans and procedures: Teams in a networked

organization focus on developing specific plans and
operations standards to ensure they achieve their goals.

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

5
School (IBS) Hyderabad
Network Organizational Structure
Advantages:

Better performance: You can use this model in a company

with a traditional structure to improve employee
performance and promote innovation in different
departments and company branches.

Reduce costs: Working with small, focused teams can help

reduce costs while increasing operational efficiency.
Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business
6
School (IBS) Hyderabad
Network Organizational Structure
Disadvantages:

Difficulty handling large-scale tasks: Because this

model uses small teams, it may be difficult to complete
large-scale tasks. You can overcome this challenge by
dividing the task into smaller units and allocating them
to different teams.

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

7
School (IBS) Hyderabad
Network Organizational Structure
Disadvantages:

Low motivation: Low motivation may hinder the

company's progress, as a networked organization uses self-
directed teams that thrive on employee motivation and
determination. You can handle unmotivated employees by
adopting strategies to improve satisfaction levels and
offering benefits and rewards to encourage and inspire
employees to perform their duties.
Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business
8
School (IBS) Hyderabad
Network Organizational Structure
Disadvantages:

Lack of control: In a networked organization,

controlling employees and other essential aspects of
the company may be difficult because teams work
without direct supervision in this structure. You can
establish control by creating structures and schedules
for employees to follow and timelines or deadlines that
require them to perform their tasks within a period.
Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business
9
School (IBS) Hyderabad
Network Organizational Structure
Disadvantages:

Unhealthy rivalry: The network model may result in

unhealthy competition among employees when
performing their tasks. You can eliminate this by
creating an environment that fosters collaboration and
encourages employees to help rather than compete
against one another.

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

10
School (IBS) Hyderabad
The choice of the best system
• There is no single best organisational structure.
• The choice is between the two- functional or
divisional.
• It is easier to control a divisional organization,
but functional organization may be more
efficient, because large functional units give
economies of scale

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

11
School (IBS) Hyderabad
The choice of the best system
• A divisional organization requires managers with broader
outlook and total perspective of the business, while a
functional manager is a specialist in one or more
discipline
• A matrix organization requires personnel with the skill of
a specialist and thereafter, develop the skill for general
management
• The system must fit to the organization, not the other
way round.

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

12
School (IBS) Hyderabad
Organization Structure

Thank You

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

13
School (IBS) Hyderabad