Company structure

Company Structure
Most organizations have a hierarchical or pyramidal structure, with one person or a group of people at the top, and an increasing number of people below them at each successive level. There is a clear line or chain of command running down the pyramid. All the people in the organization know what decisions they are able to make, who their superior (or boss) is (to whom they report), and who their immediate subordinates are (to whom they can give instructions).
Some people in an organization have colleagues who help them: for example, there might be an Assistant to the Marketing Manager. This is known as a staff position: its holder has no line authority, and is not integrated into the chain of command, unlike, for example, the Assistant Marketing Manager, who is number two in the marketing department.
Yet the activities of most companies are too complicated to be organized in a single hierarchy of layers. Shortly before the first world war, the French industrialist Henry Fayol organized his coal-mining business according to the functions that it had to carry out. He is generally credited with inventing functional organization. Today, most large manufacturing organizations have a functional structure, including (among others) production, finance, marketing, sales, and personnel or staff departments. This means, for example, that the production and marketing departments cannot take financial decisions without consulting the finance department.
Functional organization is efficient, but there are two standard criticisms. Firstly, people are usually more concerned with the success of their department than that of the company, so there are permanent battles between, for example, finance and marketing, or marketing and production, which have incompatible goals. Secondly, separating functions is unlikely to encourage innovation.
Yet for a large organization manufacturing a range of products, having a single production department is generally inefficient. Consequently, most large companies are decentralized, following the model of Alfred Sloan, who divided General Motors into separate operating divisions in 1920. Each division had its own engineering, production and sales departments, made a different category of car (but with some overlap, to encourage internal competition), and was expected to make a profit.
Businesses that cannot be divided into autonomous divisions with their own markets can simulate decentralization, setting up divisions that deal with each other using internally determined transfer prices. Many banks, for example, have established commercial, corporate, private banking, international and investment divisions.
An inherent problem of hierarchies is that people at lower levels are unable to make important decisions, but have to pass on responsibility to their boss. One solution to this is matrix management, in which people report to more than one superior. For example, a product manager with an idea might be able to deal directly with managers responsible for a certain market segment and for a geographical region, as well as the managers responsible for the traditional functions of finance, sales and production. This is one way of keeping authority at lower levels, but it is not necessarily a very efficient one. Thomas Peters and Robert Waterman, in their well-known book In Search of Excellence, insist on the necessity of pushing authority and autonomy down the line, but they argue that one element - probably the product - must have priority; four-dimensional matrices are far too complex.
A further possibility is to have wholly autonomous, temporary groups or teams that are responsible for an entire project, and are split up as soon as it is successfully completed. Teams are often not very good for decision-making, and they run the risk of relational problems, unless they are small and have a lot of self-discipline. In fact they still require a definite leader, on whom their success probably depends.




Majoritatea companiilor au o structura ierarhica sau piramidala, cu o singura persoana sau un grup de persoane in virf, si cu un numar crescator de persone sub ei la fiecare nivel succesiv.
Exista o linie bine definita sau un lant de comanda care se afla pe tot intregul piramidei. Toti angajatii companiei stiu ce fel de decizii ei pot sa intreprinda(face), cine le este superior( sau sef, cui ei raporteaza) si cine este subordonatul lor( cui pot da ei instructii).
Unii oameni intr-o organizatie au colegi care ii ajuta : spre exemplu , s-ar putea sa existe un Asistent al Managerului de Marketing. Aceasta este cunoscut ca o pozitie de personal : detinatorul ei nu are autoritate pe linia de comanda si nu este integrat in lantul de conducere, spre deosebire de Managerul Asistent Marketing, care este numarul doi in departamentul de marketing.
Pe deasupra activitatile majoritatii companiilor sunt prea complicate pentru a fi organizate intr-o singura ierarhie. In scurt timp dupa primul razboi mondial, industrialistul francez Henry Fayol si-a organizat afacerea de extragere a carbunelui in concordanta cu functiile care trebuie indeplinite. El este in general acreditat cu inventarea organizatiilor functionale. Astazi majoritatea companiilor de manufactura au o structura functionala incluzind( printre altele) productie, finantare, marketing, vinzari si departamente de personal. Aceasta inseamna spre exemplu ca departamentul de productie si marketing nu pot lua decizii finale fara a consulta departamentul financiar.
Organizarea functionala este eficienta, insa sunt doua critici standart. Prima este ca oamenii sunt de obicei mult mai ingrijorati cu sucesul departamentului lor decit cel al companiei, asa ca sunt batalii permanente dintre spre exemplu : finante si marketing sau marketing si productie, care au goluri incompatibile. A doua critica este ca functiile separate nu incurajeaza inovatiile.
Insa pentru o organizatie mare manufacturarea unei diversitati de produse, avind un singur departament de productie este in general ineficient. Consecvent, majoritatea companiilor mari sunt descentralizate, urmind modelul lui Alfred Sloan, care a impartit General Motors in diviziuni operationale separate in anul 1992. Fiecare diviziune avea propriul department de inginerie, productie si vinzari, fachind o categorie diferita de masini( dar cu ceva scapari, pentru a incuraja competitia interna) si era de asteptat sa aiba un profit.
Afacerile care nu pot fi divizate in diviziuni autonome cu propria lor piata pot stimula descentralizarea, facind diviziuni care sa se ocupe intre ele folosind preturi de transfer determinate intern. Multe banci, spre exemplu, au inaugurat diviziuni comerciale, corporative, de banci private, internationale si de investitii.
O problema inerenta a ierarhiilor este ca oamenii de la nivelurile mai inferioare sunt incapabili de a lua decizii importante, dar trebuie sa paseze responsabilitatea catre seful lor. O solutie este managementul matrice in care oamenii raporteaza la mai multi superiori. Spre exemplu, un manager de productie cu o idee ar putea sa se adreseze direct unui manager responsabil pentru un anumit segment de piata si pentu o arie geografica, precum si managerii responsabili pentru functionarea traditionala a finantelor, vinzarilor si productiei. Aceasta este una dintre felurile de a tine autoritatea la niveluri joase, dar nu este neaparat cea mai eficienta. Thomas Peters si Robert Waterman, in prea cunoscuta lor carte « In cautarea excelentei », insista spre necesitatea impingerii autoritatii si autonomiei la nivelul inferior de administrare, dar ei s-au contrazis in privinta la un singur element si probabil productul – trebuie sa aiba prioritate ; matricele patru dimensionale sunt mult prea complicate.
O posibilitate indepartata este de a avea autonomie totala, grupuri temporare sau echipe care sa fie responsabile pentu un proiect intreg, si sunt despartite cit de curind proiectul este terminat cu succes. Echipele nu sunt de obicei prea bune la luarea deciziilor si duc spre riscul problemelor relationale, cu exceptia daca ele sunt mici si au o mare disciplina. De fapt ele tot necesita un lider definit, de care succesele lor probabil vor depinde.







Watch the video on labor unions and answer the questions
1. Who is at the top of the organization?
2. What are the functions of CEO?
3. Who are on the second level?
4. What is the function of the board of directors?
5. What are the types of Directors and their functions
6. Who are at the 3rd level in an organization and what is their function?
7. Who are at the 4th level in the pyramid of organization?
8. How are called the other employees and what are their function?
9. What means “span of control”?
10. Which are the types of control?

Watch the video very carefully and explain what they were used for?( in the context)
1. span of control
2. centralized structure
3. senior management team
4. decision makers
5. decentralized structure
6. alternative decision making system
7. matrix structure
8. conflicts of loyalty
9. Henry Mintzberg
10. ideology


Correct the following sentences.
1. The functions of CEO are to lead the team of employees, to represent the desires ideas of management, to formulate the organization objectives.
2. On the second level are the supervisors and team leaders.
3. The executive director works part time and makes decisions about the everyday running of the business.
4. The nonexecutive director works full time.
5. The managers are responsible for a team of people and day to day implementation of state policy.
6. Span of control means the number of people which are directly accountable by a group of manager.
7. At the 3rd level in the pyramid of organization are supervisors and team leaders.
8. There are 3 types of span control.
9. Operatives are the managers on the 3rd top of organization.
10. In the decentralized structure of organization the authority and decision making is kept to the higher levels of pyramid.


Fill in the following statements.
1. The____________ works full time and makes decisions about the everyday running of the business.
2. The nonexecutive directors who don’t work __________.
3. _____________________ means the number of people which are directly accountable by a single manager.
4. At the top of the organization is_____________.
5. ________________ their function is to carry out the activity instructed by the supervisors and team leaders.