In the 12 Essential Readings for Strategic Management, the three common organizational models include linear-functional, divisional, and matrix organizational structures.
(a) organizational characteristics
1, straight-line functional
based on a straight line, at all levels of executive management under the establishment of the corresponding functional departments engaged in professional management, as the level of executive staff, the implementation of the director of the unified command and the functional departments of the staff - a combination of guidance. Linear functional system relative to a single product, sales, decision-making information is very effective; product diversification before the implementation of linear functional organization is appropriate, after diversification is recommended to adjust to the needs of strategic development.
2, business unit system
According to the region or by product categories into a number of business units, hierarchical management, hierarchical accounting, self-financing; each product is a profit center, is conducive to the use of specialized equipment, easy to adapt to the expansion of the enterprise and the requirements of business diversification; applicable to a large scale, a wide range of large-scale enterprises with complex technology.
3, matrix system
Favorable to strengthen the collaboration between the functional departments; because the matrix structure within the two levels of coordination, can
Reduce the burden of supervisors, and is conducive to the senior management to focus on the development of strategic objectives, decision-making and planning, as well as the implementation of the supervision of the functional departments and business units or project companies to facilitate mutual constraints, to ensure the realization of the overall objectives of the enterprise. Constraints to ensure the realization of the overall objectives of the enterprise.
(B) Division and matrix system organizational model comparison
1, division system and matrix system organizational model advantages and disadvantages comparison
1) Division system
Advantages
? The senior management of the head office can get rid of the day-to-day affairs and concentrate on the overall situation
? The implementation of independent accounting for the division, more active management, more conducive to the organization of specialized production and the realization of internal cooperation
? Comparison and competition among business divisions are conducive to the development of the enterprise
? It is easy to coordinate between supply, production and sales within the division, unlike under the line function system, which requires senior management's attention
? The general manager of a business unit has to think about the business unit as a whole, which is conducive to the development and training of management personnel
Disadvantages
? Functional organizations of the company and the division overlap, which constitutes a waste of management personnel
? The business division system leads to an increase in the number of management levels, which reduces the efficiency of decision-making at headquarters
? The business divisions implement independent accounting, the divisions only consider their own interests, affecting the collaboration between the divisions, and some business contacts and communication are often replaced by economic relations
2) Matrix System
Advantages
? Matrix flat structure, is conducive to rapid response to market changes in the enterprise, shorten the management level, improve decision-making efficiency
? Can promote the cooperation and coordination of various departments, managers at all levels, while maintaining a professional division of labor to strengthen contact and communication
? It is conducive to the integration of management functions, product production and sales, and regional market factors, and the rational allocation of resources for the realization of **** the same profit target
? Specialized management in each link of the value chain to improve the competitiveness of each link of the value chain
Disadvantages
? Multiple leaders tend to lead to inefficiency; improper coordination tends to create conflicts among managers. This type of organizational structure is more suitable for R&D, quality management, marketing, and fields with high requirements for technical expertise
? The person in charge has more responsibility than authority because the people involved in the project come from different departments and there are not enough incentives and punishments
? As projects generally involve more specialties, regional heads are required to have high coordination skills and rich management experience, as well as a set of perfect coordination and management mechanism within the company
? Lack of global view, wholeness and continuity
2. Division system and matrix system division of responsibilities between headquarters and business units
1) Division system
Headquarters
? Centralized management is reflected in five aspects: administration, finance, personnel, investment management and technology. Among them, the administrative management is manifested in the dual leadership of the head office (parent company) functional departments and the head of the division over the branches
? Funds management is manifested in the total amount of funds approved by the parent company for each division, each division can only retain a certain amount of funds according to the figures approved by the parent company, the excess must be deposited with the parent company
? In terms of investment management, it is subject to the management review and approval of the head office, and the divisions implement the program in accordance with the head office
? In terms of technology, in order to ensure quality, the technology of each division is subject to the supervision and guidance of the headquarters
Business units
? Each division as an independent profit center, are the implementation of strict cost and profit accounting, there are certain production, operation authority; collaboration between the divisions should be simulated market transactions, in accordance with the laws of the market operation
? The head of the division has the right to appoint or remove the head of the division's subordinate departments
? The subordinate departments of the division and the head office (parent company) functional departments do not implement the upper and lower management, only to the head of the division to fully ensure the autonomy of the head of the division
2) Matrix system
Headquarters
? In the matrix system, the headquarters function is to regulate, supervise, support and guide
? In terms of responsibility: the company is the main body of investment, the front-line business units are the main body of management, the functions of the main body of investment and management are completely separated
? The company's involvement in different business segments of the depth of the different, determining the strength of the matrix system, as the automotive manufacturing industry, the complexity of its production and manufacturing technology, the headquarters functions in the module of the more involved, more detailed management
Business unit
? Business management is positioned as an entity of operational management, operational responsibilities are assumed by the first-line business department, the company's operational management focus around the first-line business units
? In the matrix system, regional companies play a coordinating and communicating role, but the authorization of regional companies has become important, too tight inefficiency and too loose the vassals
? The authority of the front-line business units is mainly in the administrative management, regional personnel transfer, resource allocation, business plans, etc., mainly focused on the operational level
3, product, brand, value chain three types of divisions organizational model advantages and disadvantages of comparison
1) Product Division
Application
? The company's original organizational structure is mainly set up by product type or by brand
? Each product (brand) has a relatively independent market segment and brand characteristics
? The resources required for the operation of each product (brand) department are independent or specialized
Advantages
? Specialization facilitates the rational allocation of resources and the enhancement of professional capabilities
? Each product (brand) department acts as a profit center with clear responsibilities and rights
? It is easier to coordinate the related functional activities within the same product (brand) division, which is more flexible than adopting the management of functional departments
? Easily adaptable to business expansion and diversification
Weaknesses
? Requires more overall management talent, which is not always readily available
? Each product division has a certain amount of independent authority, which can sometimes be difficult for top management to control
? For the headquarters of the functional departments, such as personnel, finance, etc., the product divisions often do not make good use of the headquarters of some of the services can not be fully utilized
2) Regional Division
Applicable
? The company's business expansion area is large, the headquarters has no time to directly manage the business of the regional market
? The differences between regional markets are huge, and the unified marketing strategy of the headquarters is ineffective
Advantages
? The company's business expansion area is large, the headquarters has no time to directly manage the business of the regional market
? Regional markets are very different, the headquarters unified marketing strategy is ineffective
? Each regional market has been developed and matured, with completed functional modules including R&D, procurement, production, etc.
Weaknesses
? Difficulties in recruiting and cultivating regional management talent
? Regional divisions are prone to become fragmented forces, making it more difficult for the headquarters to control them
? Geographical constraints are not conducive to the implementation and execution of the headquarters' strategies
3) Value Chain Division
Applicable conditions
? Ability to integrate the value chain
? Low-cost operation model
? Headquarters has the ability to coordinate the interests of various business units
Advantages
? Favorable to the establishment of a complete industrial chain model and effective control of key links in the value chain
? Beneficial to cost control, minimize total cost through cost analysis and control of each segment division
? Stabilizes the supply of key production raw materials and reduces the threat of operational risks
Weaknesses
? Requires efficient process management and system integration, which is a challenge to the company's management
? The company's involvement in other links of the industry chain lacks the advantages of specialization and scale
? The interests of business units need to be balanced
Second, the principles of organizational optimization
1, the principles of organizational design
1) strategic/customer-oriented principle: organizational design should focus on strategic objectives and market changes, and constantly meet customer needs
2) the principle of reciprocity of power, responsibility and benefit: the responsibility, power and incentives of each management level, department and position of the company should correspond to each other
2) the principle of reciprocity of power, responsibility and benefit: the responsibility, power and incentives of each management level, department and position of the company should correspond to each other. To correspond
3) the principle of effective management range: the number of subordinates directly managed by managers should be within a reasonable range
4) management of the principle of clarity: that is, to avoid the phenomenon of multiple commands and no one is responsible for the phenomenon
5) the principle of leanness and high efficiency: in order to ensure that the company's mission to complete the prerequisite, and strive to achieve the organization of a concise, lean personnel, efficient management
6) implementation and supervision of the principle of separation: to ensure that the supervisory body to play its due role
7) professional division of labor and the principle of collaboration: taking into account the efficiency of professional management and the unity of the company's goals and tasks
8) the principle of flexibility: to ensure that the changes in the external environment can be a timely and adequate response
2, the other factors
1) Organizational strategy: the organization's Creation and design of the most important purpose is to achieve the organization's strategic objectives, the organization's strategy has a decisive impact on the design of the organizational structure, the organizational structure must be adjusted along with the organization's major strategic adjustments
2) Organizational environment: the complexity of the environment
3) People and culture: the values, attitudes, expectations, capabilities of the employees of the enterprise will have an impact on the organizational structure of the enterprise
4) Organizational scale: with the increasing scale of the organization, the enterprise's management system will successively face the leadership crisis, the autonomy crisis, the control crisis, prompting the enterprise's organizational structure to continue to change
5) Technology: with the increase in technological sophistication, the degree of mechanical automation is also increasing, which will be the organizational management span and centralized decentralization to bring about changes and new requirements
III, Business-based organizational optimization ideas and methods
(A) organizational optimization "one, three, four" method
First: a tool - the value chain. The value chain provides a systematic analysis tool for organizational design and optimization. The relevance of each link in the value chain provides a direct and powerful basis for the integration or separation of functions.
Three: three steps - management diagnosis and benchmarking study, organizational design, functional design.
Four: four factors - external environment, development strategy, internal operations, benchmarking.
(B) the use of organizational optimization methods
1, process-based organizations
The first step: diagnosis of internal operational issues
Case 1: the core conclusion of the preliminary diagnosis for the Integrated Department has become an important bottleneck restricting the efficiency of the process and communication between the Ministry of Business and the sales area and the reasons for the overdue analysis.
Step 2: Optimize key processes
Case 1: After analyzing the reasons for overruns, the project team concluded that optimizing processes and making adjustments to the corresponding organizations is the main work of this project.
The third step: in the core process optimization based on the organization, department and job adjustment
Case 1: the project team after a lot of analysis, research, discussion and other work, that a company in the must-insure the order processing, for the sales area, the integrated department, the business unit can be taken to optimize the process of optimizing the function of optimizing the way.
Step 4: Strategy and Value Chain Analysis
Case 1: Define the links in the enterprise value chain and the core functions, and clarify the interrelationships between the various business units.
Step 5: Form the core conclusions of organizational optimization
Case 1: In the optimization of organizational structure, it is recommended that the establishment of the "order flow" around the "eight departments, four major centers" based on the overall structure; in the optimization of functions, it is recommended to improve the functions of the sales area, the sales area, the sales area, the sales area, the sales area and the sales area. In terms of functional optimization, it is recommended to improve the functions of the sales area, the quotation, contract evaluation, technical support, customer complaints and other functions front to the sales area.
2, matrix system organization
The first step: organizational diagnosis. Diagnosis of the existing organization from the structure, departments and positions, etc.
The second step: a clear idea of the overall organizational restructuring
Case 2: a real estate company project, for example, the development of a number of projects, a company has been from a single project to the transition of the company's multi-projects, the existing form of the project-based organizational structure has not been adapted to meet the requirements of the strategic development of the organization, and therefore the need for a project-based organization to the matrix organization change. The company has been in transition from a single-project company to a multi-project company.
The third step: specific functional analysis. According to the value chain clear department and job setup
Case 2: According to the value analysis of the value chain, the real estate value chain, profit contribution and risk from the front end to the back end of the decreasing; located in the front end of the link of the value contribution is the largest, but the risk of decision-making is also large, the management of the authority is relatively centralized, and is located in the back end of the link of the value contribution is relatively small, the risk of decision-making is relatively small, the need for decentralized control. From the current organizational structure and departmental positions of a company, the core functions of the value chain, such as investment decision-making, cost control, marketing planning, etc., are missing or insufficient, the management of suppliers such as construction units, sales agents and property management companies needs to be improved, and human resources and other functions need to be strengthened. According to a company's property development model, planning and design, construction, sales and property management business outsourcing, a company should strengthen these aspects of outsourcing supplier management. This determines the core functions of a company: investment management, cost management, engineering management, marketing management, supplier management and human resource management.
At the same time, based on a company's development strategy and the stage of development, it is recommended that a company set up a two-tier organizational structure of headquarters and project companies (department). According to the principle of controlling the core links of higher value and the control model, it is recommended that: a company's headquarters should be positioned as a platform for business decision-making, monitoring and support, the project company should be positioned as a platform for business management and execution, and the supplier should be positioned as a platform for outsourcing business execution.
According to the control model and the positioning of the headquarters/project company, the functions of the headquarters and the project company are proposed as follows:
Headquarters: investment management, cost management, engineering management, marketing management, supplier management and human resource management.
Project company: engineering, sales, finance and administration.
According to the previous analysis, it is recommended that a company's organizational structure and departmental settings (ten departments) after the next 3-5 years: engineering management center, cost control center, investment and development center, financial management center, administrative human resources center, and marketing management center. At this stage, according to the principle of streamlining and efficiency, it is recommended to set up six departments first: Investment and Development Department, Cost Control Department, Engineering Management Department, Marketing Planning Department, Human Resources Department and Finance Department. Accordingly, the formation of the headquarters of the eight core functions: investment decision-making, planning and design management, project engineering management, project marketing management, cost management, operational control, administrative human resources, finance and capital.
According to the size of the project, the region and the importance of the different, it is recommended to set up a large project company, medium-sized project company and small project company (Department). Among them, the large project company set up engineering department, marketing department, accounting department and office; medium-sized project company set up engineering department, marketing department and comprehensive department; small project company with the existence of the project department, only set up engineers, sales management commissioner, comprehensive management commissioner and other positions, do not set up departments.
3, divisional organization
The first step: organizational adjustment ideas.
Case 3: a company's organizational structure optimization program design, mainly from the management diagnostic findings, strategic needs, control model requirements, resource capacity matching and benchmarking enterprise experience from five aspects.
1) Management diagnosis:
Case 3: A company's organizational structure needs to match the business development, and to solve the problem of weakening the key functions of the headquarters and the irrational division of functions.
2) development strategy needs
Case 3: the implementation of "micro-based, car-based, commercial development, expanding services," the diversified business development strategy, the organizational structure puts forward higher requirements.
3) control mode requirements
Case 3: according to the business characteristics of the business unit to differentiate the decentralized management, the organizational structure puts forward new requirements.
4) Matching of Resource Capabilities
Case 3: Determine the strategic position of each business unit, and use this as the basis for designing the corresponding function allocation and power and responsibility allocation program. Therefore, according to the multiple factors affecting the way functions are exercised, a company's current increasing level of operational complexity and internal business development needs require the company to shift from centralized to decentralized organizational form.
5) Benchmark enterprise experience
Case 3: From the industry's leading enterprises, most of them have gone through the transition from a linear-functional system of organization to a divisional or matrix system.
The second step, the overall conclusion of the organizational restructuring
Case 3: With the development of multiple products and cross-regional development, as well as the future needs of international operations, a company's current organizational structure will face challenges. In terms of choosing the future organizational structure, in addition to optimization based on the existing organizational structure, we can also consider choosing between the division system and the matrix system. By comparing the matrix system with the division system and the three types of division system, the project team initially suggests that a company adopt the product (brand) division system in the medium and long term. From the current practical point of view, in order to realize the set strategic objectives, a company focuses on cultivating and releasing the production capacity of each business unit, and the limited business unit system, which is a combination of the business unit and the matrix system, can better meet this strategic need. As a matter of fact, the functional modules of R&D, production and marketing of each business have already been divided into organizations according to products, preparing the conditions for the implementation of the division system. Considering the current situation of a company and the experience of the automotive industry, it is recommended to combine the advantages of the business unit and matrix system to establish a limited business unit system with integrated production and marketing (R&D and procurement are managed under the matrix system). However, from the viewpoints of headquarters' capability, current status of business units, talent structure and organizational culture, the conditions and timing for a company to implement a division system are not yet mature. The project team believes that through the cultivation of headquarters' capability and the establishment of authorization system in the first phase, a company will be ready for the establishment of the business unit system. In the program selection and determination, according to the product, brand, production and marketing integration, production and marketing separation of the four dimensions in the following four organizational models: production and marketing integration of product divisions, production and marketing separation of product divisions, production and marketing integration of brand divisions, production and marketing separation of brand divisions.
The third step, the headquarters department adjustment
Case 3: In the first phase of the basis of the need to adjust according to the promotion of the business unit system. If you take the integration of production and marketing division, the headquarters is adjusted to the following sixteen departments: Office, Marketing Management Department, Manufacturing Management Department, Logistics Department, Quality Department, Science and Technology Information Department, Joint Venture and Cooperation Department, Audit Department, Legal Affairs Department, Communist Party Department, Strategic Planning Department, Investment and Financing Management Department, Human Resources Department, Finance Department, Purchasing Center, R & D Center. According to the idea of separation of production and marketing, the headquarters of the original logistics department can be put into the production division, adjusted to fifteen departments: office, market management, manufacturing management, quality, science and technology information department, joint venture cooperation department, audit department, legal affairs department, party work department, strategic planning department, investment and financing management, human resources, finance, procurement center, research and development center.
The fourth step, the division setup program
Case 3: Program 1 for the integration of production and marketing products division; Program 2 for the separation of production and marketing products division; Program 3 for the integration of production and marketing brand division; Program 4 for the separation of production and marketing brand division. Through the comparison of the applicability and advantages and disadvantages of the four options, the project team recommended that a company prioritize the integration of production and marketing product division (while recommending that the factory is divided by product).