Question

Name and discuss 3 out of the 6 alternative organizational arrangements?

Answer 1

Organizational arrangement aims at the formal arrangement of various roles, responsibilities and relationships within an organization. There are different types of organizational arrangements such as line organization, functional organization, line and staff organization, matrix organization, formal organization, etc. We have mentioned below the three types of organizational arrangements:

1) Line organization: It is simplest and oldest type of organizational arrangement. In such form of organizational arrangement authority & instructions flow from top to bottom. It aims at maintaining unity of command in a straight line. There is clear responsibility & authority for all positions. Such form of arrangement is suitable for small organizations. It has advantages such as quick decision making, easy coordination, better relationships, etc. But there is lack of specialization & absence of conceptual thinking in such an arrangement.

2) Functional organization: In such an arrangement jobs are grouped according to their function. It divides all the activities of an organization into various functions. In this arrangement, each function is managed by functional expert. One needs to consult the functional expert before making any decision. The major functions of an organization are human resources, finance, production, sales & marketing. So, jobs are grouped according to these functions. Such an arrangement reduces pressure, encourages specialization, increases efficiency, results in optimum utilization of resources. But such an arrangement leads to communication problems, short-term, narrow thinking that leads to conflicts with other functions, there is also lack of responsibility. In such an arrangement problems arises because people start to put goals of their own groups before the goals of the entire organization. Such an arrangement becomes essential when an organization grows & becomes a large organization.

3) Matrix Organization: It is a complex arrangement. In such an arrangement, each functional staff has two reporting managers i.e., their administrative head & project manager. Different personnel from different functional departments work together to accomplish a project. There is a project manager who is appointed to coordinate the activities of the project. In such an arrangement, there is operational freedom & flexibility, employees are held responsible for the management of resources, employees gain wide experience. But it violates unity of command & it requires great degree of coordination. It is suitable for multi project organizations.