Effective organisational structure

by The Times 100 on Monday 21st June, 2010

Some organisations require a structure which allows and encourages innovation and creativity. Syngenta is a plant science business which produces a range of product lines in crop protection, seeds and garden plants. Many of Syngenta's employees are highly qualified scientists. It operates in a competitive industry and must ensure that its 24,000 workers are organised in a way that allows it to develop new products to meet the growing demand for food as the world's population increases. Syngenta has adopted a matrix structure which works alongside the normal functional structure of a business. This means that teams made up of workers from different areas of the business work on different projects – some short term and some long term. This empowers workers and allows them to put their skills and expertise to best use.

Microsoft is currently changing its consumer devices division in an attempt to create a structure which will allow it to compete effectively with Apple and Google in the smartphone market. Only 10% of smartphones sold in the United States in the first quarter of this year run Windows software, compared to Apple at 21%, Google with 28% and Research in Motion Ltd (for Blackberry) at 36%. When the chief of the division retires this year he will not be replaced, effectively making the structure of this part of the business flatter. Instead the managers currently directly below him in the organisation will report directly to the chief executive. One of these senior vice presidents will be rolling out a new Xbox hands-free controller system. The other will launch a new software system for phones called Windows Phone 7. The intention is that the new structure should prompt greater momentum for Microsoft in the mobile computing industry. (Times Online 25th May 2010)

Questions

  1. Define matrix structure.
  2. List the different functions normally found in large organisations.
  3. Draw an organisation chart for your school/college.
  4. Analyse the use of a flat structure for organisations like Syngenta and Microsoft.

Answers

  1. Define matrix structure. This is a structure where project teams are made up of workers with various specialisms from different functions of a business.
  2. List the different functions normally found in large organisations. Functions may include: • Human resources • Finance • Operations/production • Sales and marketing • IT and administration • Purchasing.
  3. Draw an organisation chart for your school/college.
  4. Analyse the use of a flat structure for organisations like Syngenta and Microsoft. Advantages: • Communication between junior workers and senior managers may improve, leading to new ideas and different perspectives • Larger spans of control are suitable for highly skilled, creative workers like those at Syngenta • Employees may feel empowered and therefore more motivated. Drawbacks: • New or younger workers may prefer or require the tighter control that taller structure offer • Fewer chances of promotion as there are less management levels • The workload of managers might be very high (although some decision making responsibility may be delegated).

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