FIVE DESIGN OPTIONS IN

AN ORGANIZATION
Dr. Sumita Mishra
FOUNDATIONS OF ORGANIZATION
DESIGN
 Theorization by Henry Mintzberg

1. STRATEGIC APEX
2. OPERATING CORE
3. MIDDLE LINE
4. TECHNO-STRUCTURE
5. THE SUPPORT STAFF
FOUNDATIONS OF ORGANIZATION
DESIGN
 STRATEGIC APEX
-The strategic apex is charged with ensuring that the
organization serve its mission in an effective way, and
also that it serve the needs of those who control and
otherwise have power on the organization (such as
owners, govt.. Agencies, unions, pressure groups)
-Executives, Presidents, Governing Boards etc.
-The prime duties of this apex are:
1. Direct Supervision to the extent that is effective
2. Management of organization’s boundary conditions
3. Development of the organizations’ strategy
-In general the strategic apex takes the widest and most
abstract perspective of the organization
FOUNDATIONS OF ORGANIZATION
DESIGN
 OPERATING CORE
-The operating core of the organization encompasses
those members operators-who perform the basic task
linked to the production of products and services
-The prime duties of this core are:
1. They secure the inputs (purchasing department)
2. They transform the inputs into outputs
3. They distribute the outputs (functions of marketing)
4. They provide direct supervision to the input,
transformation, output functions (Maintenance and
Inventory)
-Purchasing Agents, Sales Persons, Shippers, Assemblers
etc.
FOUNDATIONS OF ORGANIZATION
DESIGN
 MIDDLE LINE
-The strategic apex is joined to the operating core by the chain
of middle-line managers with formal authority
-Most such chains are scalar in nature-run in a single line from the
top to the bottom
-Difference between theory and practice
-Relationship of size with the middle line in organizations
-The prime duties are:
1. Handles the flow of information to the strategic apex
2. Handles the flow of resources to the unit
3. Boundary conditions to manage
4. Formulate strategy of the unit (but they are more detailed and
elaborated and focused on the work itself)
-Plant managers, VPs of manufacturing/sales, sales managers,
etc.
FOUNDATIONS OF ORGANIZATION
DESIGN
 TECHNO-STRUCTURE
-In the techno-structure, we find the analysts (and their
supporting clerical staff) who serve the organization by
affecting the work of others.
-They are far removed from the operating work flow.
-The control analysts of the techno-structure who are
responsible for standardization in the organization
-Three major categories of control analysts as proposed by
Mintzberg:
1. Work study analysts (such as Industrial Engineers): Process
Standardization
2. Planning and control Analysts (such as planners, production
schedulers and accountants): Output Standards
3. Personnel Analysts (Trainers, Recruiters): Input
Standardization
FOUNDATIONS OF ORGANIZATION
DESIGN
 SUPPORT STAFF
 A great number of units, all specialized, that exist to
provide support to the organization outside its operating
work flow
-Cannot all be lumped into the category of staff as they
are different from the techno-structure (redefining
the administrative component)
-They ensure greater controls in an organization
-They operate at different levels of the hierarchy. Top
Level (PR & Legal), Mid Level (R&D, Pricing, Industrial
Relations), Lower Level (Mail room, Cafeteria, Reception )
-In a university these may be the alma mater fund,
university press, bookstore, printing service, payroll
department, mailroom, cafeteria etc.
 FOUNDATIONS OF ORGANIZATION
DESIGN-SIMPLE STRUCTURE
Simple Structure-Structural Dimensions
Complexity Low-as the structure is not elaborated
Formalization Low-Small and Nascent Organization
Centralization High- Why does it work? ,Vertical and Horizontal
General Structural Organic
classification
Simple Structure-Design Dimensions
Strategic Apex Small
Middle Line Small
Operating Core Large
Techno-structure Not applicable
Support Not applicable
Key Part of the Strategic Apex
Organization
FOUNDATIONS OF ORGANIZATION
DESIGN-SIMPLE STRUCTURE
Strengths
1. Its fast and simple and requires no cost to maintain
2.Accountability and reduction of ambiguity
Weaknesses
3. Cannot deal with increase in size
4. Is dependent on the whims and fancies of one person
5. Riskiest structure depending on the health and whims of
one individual
When to use
6. Size is small and the organization is in its formative
years
7. Simple and Dynamic environments
8. Hostile environments
EXAMPLES-SIMPLE STRUCTURE
1. Grofers
-Started as a B2B with a head count of 10 people. Current organizational size is
3300 and is operating on a B2C mode.
-Flat structure with an organic design
-Changing environment with stability in question. Hence funders are important
-What are the deviations from the simple design?
Heavy levels of decentralization
-Problems??????
2. PayTM
-Largest mobile commerce platform
-Low formalization, moderate complexity and decentralization
-Organic and flat
3. Olacabs
-Small size, rapid environment changes and tremendous competition
-Less formalization, limited number of teams
-Heavy Centralization
Bottom Line: Even though Startups have simple designs decision making may
be decentralized.
 FOUNDATIONS OF ORGANIZATION
DESIGN-MACHINE BUREAUCRACY
Machine Bureaucracy-Structural Dimensions
Complexity High- depends on functional specializations or division
of labour
Formalization High-Formalized rules and regulations dominate
Centralization High-Limited horizontal decentralization
General Structural Mechanistic and functional
classification
Machine Bureaucracy-Design Dimensions
Strategic Apex Small
Middle Line Large
Operating Core Large
Techno-structure Large
Support Large
Key Part of the Techno-structure
FOUNDATIONS OF ORGANIZATION
DESIGN-MACHINE BUREAUCRACY
Strengths
1. Economies, minimization of duplication of resources,
2.Less costly middle line and the operating core
Weaknesses
3. Functional silos and conflicts
4. Obsession with rules
When to use
5. Size and a stable environment
6. Post offices, mass production companies
7. McDonalds’ In and Out and Starbucks
 FOUNDATIONS OF ORGANIZATION
DESIGN-PROFESSIONAL BUREAUCRACY
Professional Bureaucracy-Structural Dimensions
Complexity High- depends on social specializations
Formalization High-Formalized rules and regulations dominate from
professional expertise
Centralization Low-Vertical and Horizontal decentralization
General Structural Mechanistic
classification
Professional Bureaucracy-Design Dimensions
Strategic Apex Small
Middle Line Moderate
Operating Core Largest
Techno-structure Small
Support Large
Key Part of the Operating Core
FOUNDATIONS OF ORGANIZATION
DESIGN-PROFESSIONAL
BUREAUCRACY
Strengths
1. Gives Professionals the required autonomy to work. The
process of pigeon holding: 1) Categorize the clients’ need
in terms of contingency 2) To apply and execute that
program (MBO, PERT, OD)
2.Gives due recognition to professional expertise
Weaknesses
3. Functional silos and conflicts
4. Obsession with rules and standards
When to use
5. Size and a stable though environment
6. Universities and Hospitals
 FOUNDATIONS OF ORGANIZATION
DESIGN-DIVISIONAL FORM
Divisional Form-Structural Dimensions
Complexity High- depends on Divisions (Product, Client/Service &
Geography)
Formalization High-Divisions can be machine bureaucracies
Centralization High-Headquarters and the Middle Line
General Structural Mechanistic
classification
Divisional Form-Design Dimensions at the Headquarters
Strategic Apex Small
Middle Line Large
Operating Core Large
Techno-structure Small
Support Large
Key Part of the Middle Line
THE DIVISIONAL ORGANIZATION

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MULTI-DIVISIONAL
STRUCTURES,
 Clientstructure is an organizational form in which
employees are organized around serving customers.
FOUNDATIONS OF ORGANIZATION
DESIGN-DIVISIONAL FORM
When to use this structural form?
-What in essence are these divisions? Alfred Sloan’s idea at
GM where he created divisions
-Product or market diversity
-Multi product or a multi market organization
-Takes care of the conflict between functions and the
increase in size and operations of the organization
-Works best with moderate environment conditions
 FOUNDATIONS OF ORGANIZATION
DESIGN-ADHOCRACY
Adhocracy Form-Structural Dimensions
Complexity (HD) High- depends on social specialization
Formalization Low
Centralization Low
General Structural Organic
classification
Adhocracy Form-Design Dimensions at the Headquarters
Strategic Apex Moderate
Middle Line Blurred
Operating Core Blurred
Techno-structure Almost non existent
Support Large
Key Part of the Support Staff
Organization
THE MATRIX ORGANIZATION
 Matrix organization
 An organization composed of dual reporting
relationships in which some managers report to two
superiors—a functional manager and a divisional
manager

 Matrix can be of two different types-product and

function or by virtue of geography and product

 Temporary and the permanent matrix

MATRIX ORGANIZATIONAL STRUCTURE
ADVANTAGES OF A MATRIX DESIGN
EXAMPLE

 Nike culture used to encourage local managers to focus on

market share rather than profitability

 Wall Street commented on lack of managerial control at

Nike

 Implemented a matrix structure to resolve issue

 Matrix structure stated local managers’ responsibilities by

region and product

 Headquarters establishes which products to focus on and

how to do it under new matrix structure
Source: “The New Nike,” Business Week. September 20, 2004

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