For functional management structure characterized by the creation of structural units, each of which has its own clearly defined, specific task and responsibilities (Fig. 2.5). In this structure, each management body, as well as the performer, is specialized in performing certain types of management activities(functions). A staff of specialists is created who are responsible only for a certain area of work.
Rice. 2.5. Functional structure of organization management
The functional management structure is based on the principle of complete management: compliance with the instructions of the functional body within its competence is mandatory for departments.
Advantages of a functional management structure:
High competence of specialists responsible for performing specific functions;
Specialization of departments in performing a certain type of management activity, eliminating duplication, performing management tasks for individual services.
Disadvantages of this type of organizational structure:
Violation of the principle of full management, the principle of unity of command;
Lengthy acceptance procedure management decisions;
Difficulties in maintaining constant relationships between various functional services;
Reducing the responsibility of performers for work, since each performer receives instructions from several managers;
Inconsistency and duplication of instructions and orders received by performers;
Each functional manager and functional unit considers their tasks to be paramount, poorly coordinating them with the overall goals set for the organization.
So, for example, in OJSC AVTOVAZ, the functional management structure is used in the generalized structure, auxiliary production, and machine tool building. An example of a functional organizational structure is presented in Fig. 2.6.
Rice. 2.6. Example of a functional organizational structure
To a certain extent, the so-called linear-staff and linear-functional management structures, which provide for the functional division of managerial labor in departments of different levels with a combination of linear and functional management principles, help eliminate the shortcomings of linear and functional organizational structures. In this case, functional units can carry out their decisions through line managers (in a linear-staff structure) or, within the limits of delegated special powers, communicate them to specialized services or individual performers at a lower level (in a linear-functional management structure).
At the core line-staff management structure There is a linear structure, but under line managers special units (headquarters services) are created that specialize in performing certain management functions (Fig. 2.7). These services do not have the right to make decisions, but only provide, through their specialists, a more qualified performance by the line manager of his duties. The activities of functional specialists in these conditions come down to searching for the most rational options problem solving. The final decision-making and transfer of it to subordinates for execution is carried out by the line manager. In conditions of this type of management structure, the principle of unity of command is preserved. An important task of line managers in this case becomes coordinating the actions of functional services (units) and directing them towards the general interests of the organization.
Rice. 2.7. Line-staff structure of organization management
Unlike the line-staff linear-functional structure, the most common structure of the hierarchical type, still widely used throughout the world, is based on functional units that can themselves give orders to lower levels, but not on all, but on a limited range of issues determined by their functional specialization.
In addition to the linear principles of management, the basis of linear-functional structures is formed by the specialization of management activities by functional subsystems of the organization (marketing, research and development, production, finance and economics, personnel, etc.).
Designed according to the linear-functional principle of organization, maintaining rigidity and simplicity linear structures, have acquired highly productive, specialized management potential. Freeing line departments from solving general organizational management tasks made it possible to sharply increase the scale of their activities and thereby realize the resulting positive effect. The implementation of management functions on the basis of delineation and specialization of management ensured an increase in the quality of management of the entire organization, an increase in the efficiency of control of linear units and the achievement of general organizational goals.
The transfer of current management to the heads of line departments and the functional division of the management activities of the organization as a whole allow top management to focus on solving strategic problems of enterprise development and ensure the most rational interaction with the external environment. First organizational structure acquires some strategic potential, and management acquires the conditions for its implementation.
The undoubted advantage of the organizational structures under consideration is their flexibility. The linear-functional organization provides sufficient opportunities for restructuring linear units as the organization develops, technology changes and the separation of related industries. With the expansion of the enterprise, both the “set” of functional departments and the content of the tasks performed change. Thus, in the recent past, HR departments interacted relatively weakly with labor organization departments and wages, at present, these departments are increasingly merging into a single personnel management service of the company.
Thus, the main advantages of linear-functional structures include:
Stimulating business and professional specialization under this management structure;
High production response of the organization, since it is built on the narrow specialization of production and the qualifications of specialists;
Reduce duplication of efforts in functional areas;
Improved coordination of activities in functional areas.
Despite the widest distribution of linear-functional management structures, we note at the same time their significant disadvantages:
Erosion of the developed development strategy of the organization: divisions may be interested in realizing their local goals and objectives to a greater extent than the entire organization as a whole, that is, setting their own goals above the goals of the entire organization;
Lack of close relationships and interaction at the horizontal level between departments;
A sharp increase in the workload of the head of the organization and his deputies due to the need to coordinate the actions of different functional services;
An overly developed vertical interaction system;
Loss of flexibility in the relationships between management staff due to the use of formal rules and procedures;
Weak innovative and entrepreneurial response of an organization with such an organizational management structure;
Inadequate response to environmental demands;
Difficulty and slowdown in the transfer of information, which affects the speed and timeliness of management decisions; the chain of commands from the manager to the executor becomes too long, which complicates communication.
The figurative name of the positions of a hierarchical type structure - “fox holes of managers” - implies that the internal interests of individual divisions often run counter to corporate interests and it is very difficult to understand what is being done in each of the individual management divisions, and each head of such a division, as a rule, carefully hides what is happening in his “kitchen”.
One of the disadvantages of linear-functional management structures is the “bottleneck effect”. Its essence lies in the development mainly vertical connections within the framework of a functional approach, which raises the solution of problems arising at various levels of the organization to its main leader. As a result, managers' attempts to concentrate on solving strategic problems are drowned in operational work and routine. And this is not the fault of the manager, but the flaw of the organizational system used.
Considering all the above disadvantages, it is important to find out under what conditions they are smoothed out:
Linear-functional management structures are most effective where the management apparatus performs routine, frequently repeated and rarely changing tasks and functions, that is, in organizations operating in conditions of solving standard management problems;
The advantages of these structures are manifested in the management of organizations with a mass or large-scale type of production, in organizations that produce a relatively limited range of products;
They are most effective under a cost-based economic mechanism, when production is least susceptible to progress in the field of science and technology;
Linear-functional structures are successfully used in organizations operating in a stable external environment.
For the conditions for the effective functioning of an organization with a linear-functional management structure, it is important to have normative and regulatory documents that determine the correspondence between the responsibilities and powers of managers at different levels and divisions; compliance with controllability standards, especially among first managers and their deputies, who form rational information flows, decentralize operational production management, and take into account the specifics of the work of various divisions.
At OJSC AVTOVAZ, the basic type of management structure, according to which most structural divisions are organized, remains linear-functional. An example of a linear-functional management structure is presented in Fig. 2.8.
Rice. 2.8. An example of a linear-functional management structure
Historically and logically the significance of linear-functional structures in development economic system difficult to overestimate. It is in this case that the enterprise tests its capabilities in establishing mass production, and the “superior-subordinate” relationship is brought to a level adequate to the requirements of the external environment.
The American corporation General Motors was one of the first organizations that managed to overcome the limitations of a linear-functional structure. In the conditions of diversified production, it was decided to significantly expand the independence of large divisions and give them the right to respond to market conditions themselves, turning them into “profit centers.” This bold management decision was proposed and implemented by company president A. Sloan, who called the new structure “coordinated decentralization.” Subsequently, this organizational structure was called divisional.
Divisional (departmental) structures- the most advanced types of organizational structures of a hierarchical type, sometimes they are even considered something between bureaucratic (mechanistic) and adaptive structures. In some cases, these structures can be found in the literature under the name “fractional structures”.
Divisional structures arose as a reaction to the shortcomings of linear-functional structures. The need for their reorganization was caused by a sharp increase in the size of organizations, increasing complexity technological processes, diversification and internationalization of activities. In a dynamically changing external environment, it is impossible to manage dissimilar or geographically distant divisions of an organization from a single center.
Divisional structures- these are structures based on the allocation of large autonomous production and economic units (departments, divisions) and the corresponding levels of management with the provision of operational and production independence to the units, with the transfer of responsibility for making a profit to this level.
A department (division) is an organizational commodity-market unit that has the necessary functional units of its own.
The department is given responsibility for the production and marketing of certain products and generating profits, as a result of which the management personnel of the upper echelon of the organization are freed up to solve strategic problems. The operational level of management concentrates on the production of a specific product or on the implementation of activities in a certain territory and is separated from the strategic level, which is responsible for the growth and development of the organization as a whole. As a rule, the top management of the organization has no more than 4-6 centralized functional units. The highest governing body of the organization reserves the right to exercise strict control over corporate-wide issues of development strategy, research and development, finance, investment, etc. Consequently, divisional structures are characterized by a combination of centralized strategic planning in the upper echelons of management and decentralized activities of departments, at the level of which operational management is carried out and which are responsible for generating profits. In connection with the transfer of responsibility for profit to the level of departments (divisions), they began to be considered as “profit centers”, actively using the freedom given to them to increase operational efficiency. In connection with the above, divisional structures of the board are usually understood as a combination of centralized coordination with decentralized management (decentralization while maintaining coordination and control) or, in accordance with the statement of A. Sloan, as “coordinated decentralization.”
The divisional approach ensures a closer connection between production and consumers, significantly accelerating its response to changes occurring in the external environment.
Divisional structures are characterized by full responsibility of department heads for the results of the activities of the units they head. In this regard, the most important place in the management of organizations with a divisional structure is occupied not by the heads of functional departments, but by the managers heading production departments.
The structuring of the organization into departments is carried out according to three principles:
Product - taking into account the characteristics of the products manufactured or services provided;
By targeting a specific consumer;
Regional - depending on the territories served.
There are three types of divisional structures:
Divisional productive structures;
Customer-oriented organizational structures;
Divisional-regional structures.
With a divisional product structure, the authority to manage the production and sales of any product or service is transferred to one manager, who is responsible for this type of product (Fig. 2.9).
Rice. 2.9. Product divisional structure
Heads of functional services (production, procurement, technical, accounting, marketing, etc.) must report to the manager for this product.
Organizations with such a structure are able to quickly respond to changes in competitive conditions, technology and consumer demand. Activities for the production of a certain type of product are under the leadership of one person, which improves coordination of work.
A possible disadvantage of the product structure is an increase in costs due to duplication of the same types of work for different types products. Each product department has its own functional divisions.
An example of a product divisional structure at JSC AVTOVAZ is the service of the vice president for technical development, which includes: a scientific and technical center (STC), which ensures the creation and production of new and modernized car models; production technological equipment(PTO), which manufactures machine tool products; production of molds and dies (PPSh), which produces technological equipment (Fig. 2.10).
Rice. 2.10. Example of a product divisional structure
When creating consumer-oriented organizational structures, units are grouped around a certain number of consumers (for example, the army and civilian industries, industrial, technical and cultural products). The goal of such an organizational structure is to serve the needs of specific customers as well as an organization that serves just one group. An example of an organization that uses consumer-oriented management structures is commercial banks. The main groups of service consumers in in this case will be: individual clients, organizations, other banks, international financial organizations.
If the organization’s activities are extended to a number of regions in which it is necessary to use different strategies, then it is advisable to form a divisional management structure on a territorial basis, i.e. use divisional-regional structure(Fig. 2.11). All activities of the organization in a particular region must be subordinate to the appropriate manager responsible to the highest governing body of the organization. The divisional-regional structure facilitates the solution of problems associated with local customs, peculiarities of legislation and the socio-economic environment of the region. Territorial division creates conditions for training management personnel of departments (divisions) directly on site.
Rice. 2.11. Divisional-regional structure
An example of a specific regional divisional structure implemented at JSC AVTOVAZ in the supply management system for the domestic market is presented in Fig. 2.12.
Rice. 2.12. An example of the regional divisional structure of JSC AVTOVAZ
As organizations develop and enter international markets, the gradual transformation of national corporations into transnational ones, the achievement of these corporations at the highest level of their development leads to the creation of global corporations, where divisional structures are transformed into international and transnational ones. In this case, the organization stops relying on activities within the country and is restructured structurally in such a way that international operations have a predominant importance in the national market.
We can identify the most common types of international divisional structures, the construction of which is based on a global approach.
Globally oriented product (commodity) a structure based on a divisional structure with divisions based on product characteristics, each of which independently operates on the entire world market, is shown in Fig. 2.13. This structure is used by organizations with highly diversified products and products that differ significantly in their production technology, marketing methods, sales channels, etc. It is applicable in organizations where the differences between the types of products produced are more significant than the differences between geographical regions, in which these products are sold. This type of structure contributes to the international orientation of the organization, however, they are characterized (though, like any other type of divisional structure) by weakening coordination between the individual divisions of the organization and increasing duplication of their activities.
Rice. 2.13. Globally oriented product (commodity) structure
Globally oriented regional structure is also based on a divisional structure using the geographical principle of construction (Fig. 2.14), and the national market is also considered as one of the segments of the regional division. It is most advisable to use this type of structure by organizations in which regional differences are of fundamental importance. Often, globally oriented regional organizational structures are used in industries with technologically slowly changing products (beverages, cosmetics, food, petroleum products). The advantage of such a structure is the close interrelation of geographical regions and coordination of activities within their boundaries, and the disadvantages are the weak coordination of the work of individual units and the high degree of duplication of their activities.
Rice. 2.14. Globally oriented regional structure
Mixed (hybrid) structure characterized by the fact that, along with the emphasis on a specific product ( geographical region, functions) it has built-in structural connections of territorial and functional (product and functional or territorial and product) type. This type of structure arose due to the fact that each of the above structures can have strengths and weaknesses. There is no single organizational structure that could be considered ideal. The organizational structure of management must correspond to the specific operating conditions of the organization, and for large economic entities they are quite complex and varied and cannot be adequate to any organizational structure in pure form. The mixed structure is currently very popular among American multinational corporations (especially those with highly diversified activities).
Summarizing the consideration of divisional structures, it should be noted their advantages, disadvantages and conditions for the most effective use. The advantages of these types of structures are:
The use of divisional structures allows an organization to pay as much attention to a specific product, consumer or geographic region as a small specialized organization does, as a result of which it is possible to respond more quickly to changes occurring in the external environment and adapt to changing conditions;
This type of management structure focuses on achieving the final results of the organization’s activities (production of specific types of products, meeting the needs of a specific consumer, saturation of a specific regional market with goods);
Reducing the management complexity faced by senior managers;
Separation of operational management from strategic management, as a result of which the organization's top management concentrates on strategic planning and management;
Transfer of responsibility for profit to the division level, decentralization of operational management decisions;
Improved communications;
Development of breadth of thinking, flexibility of perception and entrepreneurship of heads of departments (divisions).
At the same time, the disadvantages of this type of organizational structure should be emphasized:
Divisional management structures have led to an increase in hierarchy, i.e., vertical management. They demanded the formation of intermediate levels of management to coordinate the work of departments, groups, etc.;
Contrasting the goals of departments with the general goals of the organization’s development, the discrepancy between the interests of the “tops” and “bottoms” in a multi-level hierarchy;
The possibility of conflicts between departments, in particular in the event of a shortage of centrally distributed key resources;
Low coordination of the activities of departments (divisions), headquarters services are disunited, horizontal connections are weakened;
Inefficient use of resources, inability to use them fully due to the assignment of resources to a specific department;
Increased costs for maintaining the management staff due to duplication of the same functions in departments and a corresponding increase in the number of personnel;
Difficulty in exercising control from top to bottom;
Multi-level hierarchy and within the departments (divisions) themselves, the effect of all the shortcomings of linear functional structures;
Possible limitation professional development department specialists, since their teams are not as large as in the case of using linear-functional structures at the organizational level.
It should be noted that the most effective use of divisional management structures is in large-sized organizations, when expanding production and economic operations, in organizations with a wide range of products, in organizations with highly diversified production, in organizations in which production is weakly susceptible to fluctuations in market conditions, with intensive penetration of organizations into foreign markets.
The existence of many varieties of divisional structures is due to the many possible states of an economic object under different input and output production conditions and the presence of business restrictions.
It is extremely rare to encounter a situation in which an organizational structure of the required type is immediately formed. This is possible when organizing a completely new enterprise or with a clearly modeled process of reorganizing the production and organizational structure.
However, we note that reorganization of the structure occurs when management problems create a “critical mass” and must be resolved by any means. This is the impetus for the beginning of the evolutionary development of a new structure through soft change or through hard reorganizations.
The accumulated experience in the theory and practice of reorganizing the management structure shows that the feasibility of moving to a divisional organization is determined by the potential of the enterprise and presupposes the presence of several markets with different specifics. The transition process occurs when the previous structure accumulates a sufficient number of unresolved problems, and another reorganization is inevitable. Divisional structures are also subject to transformation. Thus, improving the organizational structure is a natural, necessary and constant process for all enterprises, where everything is determined specific situation, goals, values, experience, knowledge of managers. Familiarity with theoretical models gives an idea of the organizational structure system in which each company finds the most convenient starting scheme for itself.
As indicated in the work, there is no doubt that the basis for the construction and development of any systems is a linear model with a functional distribution of relationships. However, in control theory there is a dependence - than structurally more complex system management, the easier it is to organize and regulate management flows. In this regard, distinguishing between schemes for organizing relationships between the set of elements of the system (schemes such as linear, linear-functional, divisional, functional, etc.), it should be noted that there are new trends in the formation of structures that correspond to the changing principles of the effective functioning of economic systems.
Since linear-functional and divisional organizational structures are most common in the modern economy, including the Russian one, we will conduct a comparative analysis of their main economic parameters. This will make it possible not only to clarify the strengths and weaknesses of these structures, but also to formulate their generalized assessment and role in effective development enterprises (Table 2.4).
Table 2.4 Comparative analysis economic characteristics of organizational structures
Thus, the widespread use of linear-functional and divisional structures of organizations is quite justified. These structures are quite adaptive, moderately rigid and stable, allow the use of management personnel of diverse quality and create conditions for professional growth.
It is important that such organizations inherently assume the possibility of restructuring both in the event of changes in the external environment and in the event of a change in the management team or goals.
Let us consider the process of evolution from the simplest (linear) structure to a divisional one from the point of view of the influence of external and internal factors and identifying patterns of structural changes.
As we have already determined earlier, one of the features of the divisional structure of product orientation is the duplication of functions against the backdrop of expanded powers of the heads of sales departments. This structure makes it possible to improve the system’s response to local minor market changes by reducing the chain of command and concentrating operational information in decision-making centers. The chain of changes in the organizational structure during the transition from a conventional (functional structure) to a divisional structure can be described by the initial, for example functional, and final divisional structures (Fig. 2.15-2.17).
Rice. 2.15. Functional structure of the enterprise
Rice. 2.16. Divisional structure of the enterprise
Rice. 2.17. Matrix structure model
Sales divisions must undergo reorganization, to which warehouse and transport groups, as well as marketing groups, have been transferred. At the same time, the headquarters marketing department is retained, which in the divisional structure no longer deals with local markets, but with market technologies, company-wide strategy and problems of internal interaction. Issues of economic planning are distributed between divisions and headquarters, the system-analytical and software complex (ACS) remains common. Duplication of functions across departments allows for improved management efficiency and coordination of decisions. However, such a system must have an appropriate level of authority and management resources without unnecessary duplication of functions, which at certain levels can become a negative factor.
In Russian practice, a typical divisional structure is often called an “internal holding” and acts as a transitional step to an external holding. It can be stated that it really eliminates many contradictions, since it breaks up a complex, clumsy organization into separate blocks, in which “local” problems are solved in their own way.
Currently, there are many structures that are essentially a type of divisional structure, in which, for example, the differentiation of divisions is carried out not according to a functional, but according to a design principle, or organizations in which independent business units (having legal status) act as elements of the structure. In this case, it is believed that we're talking about about the network, cooperation structure. This does not entirely correspond to the concept of a division, but reflects its more advanced structure. On the other side, domestic practice management consulting shows that it was possible to maintain and even increase production volumes at some enterprises in the first half of the 1990s. allowed the transition to a divisional management structure (delegation of powers and responsibilities to middle managers, transition to internal cost accounting, etc.). Although such a transition for the manager personally is fraught with the transfer of “administrative resources,” which was considered the main factor, into “the wrong hands,” which could pose a threat for the manager to be relegated to the background and become unnecessary.
Further development of the economic system moves the structure into the area of flexible systems, based either on integrated structures in the form of business units, or on adaptation to changes (matrix structures or their analogues). At the same time, the matrix organizational structure involves the formation of a flexible system through the distribution of main functions and dual management. Creating such interaction (dual management) requires careful coordination of the balance of interests with maximum commonality of goals and high corporate culture. The features of such structures will be discussed further.
The most developed type of divisional management structures can be called organizational structures based on strategic business units (strategic economic centers). They are used in organizations if they have a large number of independent departments with a similar profile of activity. In this case, to coordinate their work, special intermediate management bodies are created, located between the departments and senior management. These bodies are headed by deputies of the organization's senior management (usually vice presidents), and they are given the status of strategic business units.
Strategic business units are responsible for developing the organization's strategic positions in one or more areas of business. They are responsible for choosing areas of activity, developing competitive products and marketing strategies. Once the product range is developed, responsibility for implementing the program falls on the departments of the current commercial activities, i.e. into divisions.
The analysis of the varieties of hierarchical organizational structures showed that the transition to more flexible, adaptive management structures, better adapted to dynamic changes and production requirements, was objectively necessary and natural.
(Materials are based on: Fundamentals of Management. Edited by A. I. Afonichkin. - St. Petersburg: Peter, 2007)
Divisional structures are structures based on the allocation of large autonomous production and economic units (departments, divisions) and the corresponding levels of management, granting these units operational and production independence and transferring responsibility for making a profit to this level.
Divisional (departmental) management structures are the most advanced type of hierarchical type organizational structures.
Divisional structures are characterized by full responsibility of department heads for the results of the activities of the units they head. In this regard, the most important place in the management of companies with a divisional structure is occupied not by the heads of functional departments, but by the managers heading production departments.
The structuring of a company into departments (divisions) is carried out, as a rule, according to one of three principles: by product - taking into account the characteristics of the products or services provided, depending on the focus on a specific consumer; and by regional - depending on the territories served. In this regard, three types of divisional structures are distinguished:
· divisional-productive structures;
· consumer-oriented organizational structures;
· divisional-regional structures.
With a divisional product structure, the authority to manage the production and sales of any product or service is transferred to one manager, who is responsible for this type of product. Heads of functional services (production, procurement, technical, accounting, marketing, etc.) must report to the manager for this product.
Companies with this structure are able to respond more quickly to changes in competition, technology and customer demand. Activities for the production of a certain type of product are under the leadership of one person, coordination of work is improved.
A possible disadvantage of the product structure is an increase in costs due to duplication of the same types of work for different types of products. Each product department has its own functional divisions.
When creating consumer-oriented organizational structures, divisions are grouped around certain consumer groups (for example, the army and civilian industries, industrial, technical and cultural products). The goal of such an organizational structure is to satisfy the needs of specific customers as well as a company that serves just one group of them does.
Figure 1. Product divisional structure
Figure 2. Regional divisional structure
If the company's activities are spread over several regions in which the use of different strategies is required, then it is advisable to form a divisional management structure on a territorial basis, i.e., use a divisional-regional structure.
All activities of the company in a certain region in this case must be subordinate to the appropriate manager, who is responsible for it to the highest governing body of the company. The divisional-regional structure facilitates the solution of problems associated with local customs, peculiarities of legislation and the socio-economic environment of the region. Territorial division creates conditions for training management personnel of departments (divisions) directly on site.
We can distinguish the following most common types of international divisional structures, the construction of which is based on a global approach:
1. Globally oriented product (product) structure (Worldwide Product Structure), based on a divisional structure with divisions based on product characteristics, each of which independently operates on the entire world market. This structure can be used by companies with highly diversified products, products that differ significantly in their production technology, marketing methods, distribution channels, etc. It is used primarily by those companies for which differences between types of products are more important than differences between geographic regions in which these products are sold. This type of structure contributes to the international orientation of the company, however, it is characterized (although like any other type of divisional structure) by weakening coordination between the individual divisions of the company; increased duplication of their activities.
Figure 3. Globally oriented product (commodity) structure
2. Globally oriented regional structure (Worldwide Regional Structure), also based on a divisional structure, but using the geographical principle of construction. at the same time, the national market is often considered only as one of the regional divisions. It is most appropriate to use this type of structure by companies for which regional differences are more important than differences in products. Often, globally oriented regional organizational structures are used in industries with technologically slowly changing products (automobiles, drinks, cosmetics, food, petroleum products). The advantages of such a structure include close relationships with geographic regions and high coordination of activities within them, while the disadvantages include weak coordination of the work of individual departments and duplication of their activities.
Figure 4. Globally oriented regional structure
3. Mixed Structure, Mixed Overlay, where, along with an emphasis on a specific product (geographical region, functions), structural connections of the territorial and functional (product and functional or territorial and product) type are built in. This type of structure arose due to the fact that each of the above structures can have strengths and weaknesses; there is not a single organizational structure that could be considered ideal. The organizational structure of management must correspond to the specific operating conditions of the company, and for large objects they are quite complex and varied and no single organizational structure in its pure form can be adequate to them. The mixed structure is currently very popular among American multinational corporations (especially those with highly diversified activities).
In this part of the lecture, we will analyze the most common and generally accepted management structure. What structure is this? It is rather a symbiosis of two organizational structures at once - linear and functional, as a result we get a linear-functional management structure! But first things first, since it did not appear immediately, but as a result of the transformation of the functional structure of enterprise management.
Concept of functional management structure
What is special about the functional structure? In the classical view, the functional structure appeared as a result of the complication and expansion of production processes. That is, the volume of products produced and the number of employees increased so much that it was no longer possible to manage as before. Those principles and approaches to management that existed at that time needed to be modified to suit new conditions. We get that, just like, the functional structure is the fruit of development processes and, first of all, production.
Historically, the functional organizational structure is the third structure to emerge after the linear and staff ones. However, it is fundamentally different from the first two. If we recall the classification of management structures that we considered, then there we classified the structures according to the vertical and horizontal principles of management. Here the functional structure refers to the horizontal construction of structures, or it is characterized by the process of departmentation - the allocation of departments (departments).
The main feature of the functional structure lies in the fact that specialists or departments appear in it for the main basic functions of management, and these departments have the right to make decisions on this function, for which they are responsible.
That is, a special department is formed, for example, a supply department, it performs all functions related to supply, makes decisions on supply itself and is responsible for actions performed or not performed. This main principle the work of a functional structure as opposed to a headquarters structure.
Although the functional structure was transformed from the headquarters structure, in this situation the headquarters received the status of independent units and began to perform their functions independently. This is how functional structures appeared. In addition, the formation and development of functional structures was greatly influenced by the Administrative School of Management, and in particular by its founder Henri Fayol. Fayol was the first to talk about the division of functions not only in the organization itself, but also in the management process.
Let us schematically represent the functional management structure in the figure.
The obvious advantage of a functional structure is specialization in a certain area (function), but this structure also has a significant disadvantage. Next, we will take a closer look at the advantages and disadvantages of a functional management structure.
Advantages and disadvantages of a functional management structure
As noted above, the most important advantage of a functional structure is functional specialization, that is, the historically long-known process of fragmenting a general action into small operations, in this case management functions. In such a situation, the execution of the action improves significantly, which is what a large organization needs. The disadvantage that the functional structure has received is the simultaneous subordination of all performers to all functional managers, as can be seen from the figure. We will present all the disadvantages and advantages in the diagram.
The main drawback that makes it difficult to use this structure in its pure form is the lack of unity of command. As noted earlier, the management structure should be built on the principle of subordination of the performer to one immediate supervisor (unity of command); it is this principle that is violated by the functional structure. Therefore, this structure is not used in its pure form, precisely because of the difficulties of coordination, when the performer does not know who exactly his immediate superior is, and what work to do first.
A way out of the situation was quickly found. To take advantage of the functional structure, it was necessary to add to it the advantages of another basic structure - linear.
Linear-functional organizational management structure and its features
Management practice very quickly made it clear that in management it is necessary to use both functional and linear principles of process management. This is how the linear-functional structure of organization management appeared. This type of structure is used most often in practice, especially in medium and small organizations. They were formed a long time ago, and, despite a number of shortcomings, they are classic and basic structures in modern management.
The basic principle of linear-functional construction is that the main production decisions are made by the line manager responsible for this area, while functional units work together with the line manager (this interaction is shown in dotted lines in the diagram), and do not participate in the direct management of production personnel, that is, all performers are subordinate to only one line manager. In such a situation, the principle of unity of command will be observed.
An example of a linear-functional structure
Thus, main feature linear-functional structure is that it makes it possible to immediately use the advantages of both linear and functional approaches to management. But the main drawback that is characteristic of this class of structures is poor flexibility. It is extremely difficult for organizations to adapt to changes in the environment when using such a structure of the management apparatus. To improve adaptation to the environment, new management structures began to appear - and. But this will be discussed in the following parts of Lecture 7.
The linear-functional structure is the superposition of linear and functional structures on top of each other. It has both linear and functional branches of subordination. A linear-functional management structure, like a functional one, consists of line managers and functional units, the difference is in the connections between them.
The top-level line manager directly manages lower-level line managers on production issues. Functional units are monitored by key performance indicators: profit, profitability, labor productivity, wage fund, rhythm, technical level of production.
The functional link manages the linear links of the lower level within its competence (indirect management), through the management of lower-level functional performers: economists, accountants, engineers.
In contrast to the functional management structure, there are no subordination relationships between functional and second-level line managers. The decision made by the functional level is sent to the higher line manager as feedback and only then the line manager arranges the order of execution of functional tasks by lower-level linear units. Between functional and lower linear links there are connections in the form of information flows, which are expressed in periodic reporting, requests, and responses.
In a linear-functional management structure benefits preserved functional structure (specialization of management activities) and the dignity of a linear structure (unity of command).
Serious disadvantage This structure can be considered to be its cumbersomeness, inflexibility, its inability to quickly and adequately respond to unforeseen and sudden changes in the situation. Both linear and functional branches can respond to changes only by sequentially passing information about them from the lowest management level to the highest and the same sequential response throughout the entire management chain, which is associated with time delays and distortion of information. Since the structure is closed to the top manager, as the scale of activity increases, his information overload increases, which increases the likelihood of making wrong decisions. The lack of horizontal connections in this structure when solving complex management problems does not make it possible to take comprehensive measures to eliminate them. Reorganization of such a structure is very painful for the enterprise.
11.2. Divisional OSU: product, regional and consumer-oriented
The divisional structure (from the English Division - department) was first used in the management practice of the President of the General Motors Corporation, Alfred Sloan, in the late 20s - early 30s. The peak of practical use of such structures occurred in the 60-79 years. The need for new approaches to organizing management was caused by a sharp increase in the size of enterprises, the diversification of their activities and the complication of technological processes in a dynamically changing external environment. As a result, branches have turned into unique “profit centers” for corporations, actively using the freedom provided to increase the efficiency and profitability of the business. At the same time, divisional management structures lead to an increase in hierarchy and lengthening of the management vertical, since with their development there arose the need to form intermediate levels of management to coordinate the work of departments and groups, and, accordingly, to create a secondary functional system in the intermediate management groups themselves. This in turn leads to an increase in the cost of maintaining the management apparatus and an increase in the degree of inertia of the organization.
The divisional structure is mainly used by large corporations, which, within the framework of their giant enterprises, began to create production units - divisions, giving them economic and operational-tactical independence. At the same time, the administration reserved the right of strict control in matters of strategic development, research and development, and investment. Therefore, the divisional structure is characterized by a combination of centralized coordination with decentralized management. The key figures in these structures are not functional managers, but line managers who head production departments and report directly to the president of the corporation.
Divisional structures exist in three types:
· grocery
· consumer-oriented
· regional (territorial)
Product divisional structure differs in that each division is focused on the production of certain products that are technologically unrelated to each other.
Purpose of creation grocery divisional management structure - to pay as much attention to the production of each type of various products of the company as a small company that produces one type of product pays to it. For this purpose, the company organizes food branches. Management and sales powers are transferred to the executive directors of the branches. In each branch, secondary functional services are organized, which are also subordinate to the executive director of the branch, but are controlled by the primary services of the company on issues of their competence.
This structure is successful in highly diversified companies. Having their own functionality in each division gives departments the opportunity to develop independently of each other.
Under these conditions, a company can painlessly liquidate some divisions or create new ones for itself and, more importantly, for its divisions. Likewise, without prejudice to others, reorganization within the division takes place. The division itself can be organized as a bureaucratic management structure.
This structure is successful in conditions of rapid production change. However, divisional structures also have a disadvantage: they are expensive due to duplication of management functions. The presence of functionalities at the headquarters is explained by their tasks, which are different from the tasks of the functionalities in the divisions: the functionalities of the headquarters are focused on solving global strategic issues of the company.
Divisional management structure, consumer-oriented, is created where a firm produces homogeneous products that must be modified in accordance with the needs of several large groups of consumers. The goal is to satisfy the needs of all consumers as well as a company targeting only one group of consumers would. Each division within it serves a separate consumer market.
Hierarchical organizational structures for managing operating enterprises
3. Linear-functional organizational management structure.
Hierarchical organizational structures for managing operational enterprises.
1. Linear organizational structure.
The simplest control structure is linear. With such an organization, control influences on the object of operation can be transferred only by one dominant person - the manager, who receives information only from his directly subordinate persons and makes decisions (and, accordingly, is responsible) on all issues related to the part of the object he manages. All functions of management and subordination are concentrated in the head, a vertical line of control and a direct path of influence on subordinates are created. Such an organization of management is possible only in small departments of the operation service, for example, when a foreman or foreman directly distributes instructions to everyone working in the department.
With an increase in the volume of operational activities, for example, when accepting new facilities for maintenance, the number of operating personnel and their territorial disunity increase accordingly. In such a situation, direct operational contact between the manager and each employee becomes almost impossible. Therefore, a multi-level hierarchical management system is used, in which a superior manager exercises sole management of the subordinate managers subordinate to him, and subordinate managers report to only one person - their immediate superior manager (Fig. 1). For example, the repair and construction department is divided into foreman and workshop areas.
A multi-level linear management structure has only vertical connections between elements and is built on the principle of hierarchy. This structure is characterized by a clear unity of command. Each employee or manager reports directly to only one superior person and through him is connected with higher levels of management. Thus, a hierarchical ladder of subordination and responsibility is created in the management apparatus.
Rice.
The main advantages of a linear management structure are the relative simplicity of selecting managers and implementing management functions. This organization of management ensures the speed of adoption and implementation of management decisions, the unity and clarity of management and eliminates duplication of powers and inconsistency of orders. All responsibilities and powers are clearly distributed, which ensures everything the necessary conditions to maintain the necessary discipline in the team. In addition, it ensures an increase in the manager’s responsibility for the results of the activities of the unit he heads, the executors receive interconnected orders and tasks, provided with resources, and personal responsibility for the final results of the activities of their unit.
The linear organizational structure ensures minimal production costs and minimal cost of operational activities.
The disadvantages of this type of structure include the disconnection of horizontal connections and the possibility of excessive rigidity. When operating modern facilities equipped big amount various equipment and made using unusual materials, the manager is required to have a high level of universal training, which in turn limits the scale of the department being headed and the manager’s ability to effectively manage it. In addition, a large overload of information, a multiplicity of contacts with subordinates, superiors and related organizations leads to the fact that most of the manager’s time is spent on solving operational problems, and not enough attention is paid to promising issues.
The linear structure is focused on a large amount of information transmitted from one management level to another. Its inflexibility is the reason for limiting initiative among employees at lower management levels. All of these factors make it difficult for the further growth and development of the operating enterprise. Therefore, linear structures can be recommended for small organizations with up to 500 employees with a high level of technological or subject specialization, in the absence of broad cooperative ties between organizations.
This type of organizational management structure is used in the operating conditions of small enterprises with urgent production in the absence of extensive cooperative connections. This type of organizational management structure is used in the operating conditions of small enterprises with urgent production in the absence of extensive cooperative connections with suppliers, consumers, etc. . This structure is used in the management system of individual small divisions, production sites, engaged in performing work on one or more simple technologies.
To free the head of the operations service from routine work and provide him with the opportunity to focus on strategic directions, the linear-staff organizational structure of management contributes to a certain extent (Fig. 2). This is a linear structure, which additionally includes specialized units (headquarters) that assist the relevant manager in performing individual functions, primarily the functions of strategic planning and analysis. The main task of line managers here is to coordinate the actions of functional services (units) and direct them towards the general interests of the organization.
Rice. 2. Linear-staff organizational structure of management.
Such a structure also ensures minimal production costs and minimal cost of operational activities with great opportunities for the development of the operating enterprise. Therefore, it can be recommended for small and medium-sized enterprises.
To manage departments involved in the full range of work on the technical operation of a complex facility, the manager must have knowledge and skills in diverse fields of science and technology. But choose a manager who perfectly knows the structure, operating principles and theory of setting up numerous complex engineering systems, work design diagrams modern buildings are extremely difficult. Therefore, preference is often given to a functional management structure, in which the operation of the facility is carried out by several highly specialized departments.
The functional structure is based on the principle of specialization of organizational substructures according to functional characteristics (production of preventive and repair work, R&D, marketing, supply, etc., i.e. homogeneous activities). Each specialized functional substructure is subordinated to the person in senior management responsible for this area of activity (Fig. 3). Each senior manager is delegated authority within the boundaries of the function performed. The performance of individual functions on specific issues is assigned to specialists. Specialists of the same profile are united in structural units of the management system and make decisions that are mandatory for production units. Thus, along with the linear one, a functional organization also operates. The performers are in double subordination. Thus, the worker is obliged to simultaneously follow the instructions of his line manager and functional specialist.
Thus, the functional organizational structure of management consists of several specialized linear structures subordinate to the first person of the company. At the same time, following the instructions of functional bodies (departments of planning, accounting, production maintenance, etc.) within the limits of their competence is mandatory for linear units.
Rice. 3. Functional organizational structure of management. Solid horizontal lines show horizontal control (mandatory) connections.
With a functional management structure, the line manager has the opportunity to deal more with operational management issues, since functional specialists free him from solving special issues. But management commands come from many functional services to one production unit or to one performer, and therefore the problem of mutual coordination of these commands arises, which creates certain difficulties. In addition, the responsibility of performers for fulfilling their duties is reduced, since responsibility for the operation of the facility is actually assigned to many performers.
Therefore, the scope of application of the functional management structure is limited to small and medium-sized enterprise operating services with a large number of specialized works.
3. Linear-functional organizational management structure.
Most operations services are an organized collection of interconnected departments, each of which deals with specific tasks. Therefore, linear-functional management structures are currently most widespread.
The basis of linear-functional structures is the so-called “mine” principle of construction and specialization management process by functional subsystems of the organization (implementation of operational activities, supply, finance, etc.). For each of them, a hierarchy of services (“mines”) is formed, permeating the entire organization from top to bottom. The results of the work of each service of the organization's management apparatus are assessed by indicators characterizing the fulfillment of their goals and objectives.
The linear-functional management structure (Fig. 4) consists of:
- linear units that carry out the main work in the organization;
- specialized service functional units.
Rice. 4. Linear-functional management structure.
Linear-functional organizational management structures are most effective in a stable environment, are designed to use existing technologies, facilitate the effective implementation of standardized operational activities, and are focused on price competition. They are most effective where the management apparatus performs routine, frequently repeated and rarely changing tasks and functions.
Linear-functional organizational management structures have the advantages of both linear and functional ones. Their advantages are manifested in the management of organizations serving many similar objects.
The disadvantages of a linear-functional structure are violation of the principle of unity of command, difficulties in making and implementing agreed management decisions. A strict division of labor enhances the interest of each management body in performing only “its” function, which is typical for functional divisions. Therefore, when new, non-standard, complex, cross-functional tasks arise, there is a need for frequent approval of draft solutions at the highest level of management. This circumstance complicates the use of the control system in question, since it is the least responsive to progress in the field of science and technology.
The disadvantages of a linear-functional management structure are aggravated by such business conditions that allow for a discrepancy between the responsibilities and powers of managers at different levels and divisions; controllability standards are exceeded; irrational information flows are formed; operational production management is overly centralized; the specifics of the work of various departments are not taken into account; There are no regulatory and regulatory documents necessary for this type of structure.
The linear-functional structure is most applicable in medium and large enterprises with a workforce of 500 to 3000 people.
When a linear-functional structure is supplemented by a headquarters body, a linear-staff organizational management structure is formed.
The line-staff (headquarters) management structure is also built on the principle of functional specialization of managerial labor, but the main task here is to coordinate the actions of functional services at headquarters at various levels and thereby direct these actions in accordance with the general interests of the organization (Fig. ... 5).
The headquarters reports to the line manager (LR). It is not endowed with the right to make decisions, but only performs the functions of an advisory body preparing draft decisions.
Rice. 5. Line-staff management structure.
Thanks to the unification of functional specialists in one management body, the line-staff management organization ensures the efficiency and quality of decisions due to their comprehensive justification. It practically eliminates conflicting orders and allows line managers to be freed from coordinating the work of various services.
The main advantages of the management structure under consideration are a significant increase in the efficiency of using management potential to solve emergency problems.
However, management systems with a line-staff structure do not effectively solve new problems (transition to the production of new products, changes in technology, etc.). In addition, additional costs are required for the creation of special councils, boards, and commissions for coordination and decision-making.
A line-staff management structure is created for, The most successfully considered structure provides the operational solution of extraordinary tasks - eliminating the consequences of natural disasters, etc.
The development and expansion of an operating enterprise may not be limited to simply increasing the number of facilities served. There are many examples in domestic and world practice when a large enterprise simultaneously designs, constructs and operates its own buildings and structures.
The shortcomings of linear and functional management structures lead to the search for other organizational options that provide more effective management. Possible solution in such cases there is a divisional structure. Basically, this model is used to build the structure of fairly large organizations that began to create production departments within their enterprises, giving them a certain independence in carrying out operational activities. At the same time, the administration reserved the right to strict control on general corporate issues of development strategy, design, research and development, investments, etc.
The divisional structure directly follows from the functional one by delegating a significant number of powers to managers heading functional areas, giving them a certain independence (Fig. 6), leaving the development strategy, research and development, financial and investment policy, etc. to the management of the corporation.
Fig.6. Divisional (divisional) management structures. Dashed horizontal lines show horizontal control (recommendation) connections.
Structuring the organization into departments, usually according to one of three criteria:
- by type of activity performed (operation of facilities, provision of additional services, construction, design);
- by customer orientation (consumer specialization);
- by territories served (regional specialization)
In the production departments themselves, management is structured according to a linear-functional type.
The division of functions in the divisional structure is not limited to the classical principle: execution of work - supplies - finance. At large enterprises, departments subordinate to them begin to specialize in performing one type of work or increase the volume of work performed. This entails the emergence production structure. The exit of enterprises with these products outside their region leads to the need to create territorial structures. The unpredictability and instability of the external environment require managers to create an innovative structure, where special departments develop, master and prepare for new types of work. Such organizational structures received a certain independence and the right to manage the funds belonging to them not strictly according to instructions, but in accordance with the rapidly changing external environment and internal capabilities. Local initiative has increased, which is implemented by those who come forward with it, while at the same time being fully responsible for the result obtained. It became possible to respond more quickly and effectively to changing situations and to take into account new needs. As a result, minimum production costs and the minimum cost of work performed are ensured.
At the same time, divisional management structures lead to an increase in hierarchy, i.e. vertical management. They will require the formation of intermediate levels of management to coordinate the work of departments, groups, etc. Duplication of control functions on different levels ultimately leads to an increase in the costs of maintaining the administrative apparatus. In addition, the process of monitoring the actions of new structures becomes significantly more complicated. Negative results of work can only appear over time, when it is too late to correct the situation from above. The expansion of horizontal connections, for all its positiveness, brings a weakening of vertical connections. Difficulties may arise due to duplication and confusion in the network of commands and management decisions. Excessive autonomy of parts of the organization can lead to a complete loss of influence on the part of central structures, and, consequently, subordination to common goals and objectives.
