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 advisable 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).
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-level 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 construction of 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 consumer groups. 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.
In management practice of the hospitality industry, the following types of organizational structures are most common:
Linear;
Functional;
Linear-functional.
Linear organizational management structure. Linear connections in a hotel reflect the movement of management decisions and information emanating from the so-called line manager, that is, the person who is fully responsible for the activities of the hotel (usually a small one) or its structural divisions (in a large one). This is one of the simplest organizational management structures. It is characterized by the fact that at the head of each structural unit there is a manager, vested with full powers, who carries out all management functions (Fig. 2.1).
Rice. 2.1. Linear management structure of an organization
As can be seen from Figure 2.1, with linear management, each link and each subordinate has one leader, through whom all management commands pass through one channel. In this case, management levels are responsible for the results of all activities of the objects they manage. We are talking about the object-by-object allocation of managers, each of whom performs all types of work and makes decisions related to the management of this object. Since in a linear management structure decisions are passed down the chain “from top to bottom”, and the head of the lower level of management is subordinate to a manager of a higher level, a kind of hierarchy of managers of a particular organization is formed. In this case, the principle of unity of command applies, the essence of which is that subordinates carry out the orders of only one leader. A higher management body does not have the right to give orders to any executors, bypassing their superior.
The linear management structure is logically more harmonious and formally defined, but at the same time less flexible. Each of the managers has full power, but relatively little ability to solve problems that require narrow, specialized knowledge. The linear organizational management structure has its advantages and disadvantages.
Advantages of a linear organizational management system:
1) unity and clarity of orders;
2) consistency of actions of performers;
3) ease of management (one communication channel);
4) clearly defined responsibility;
5) efficiency in decision making;
6) personal responsibility of the manager for the final results of the activities of his unit.
Disadvantages of a linear organizational management system:
1) high demands on the manager, who must be comprehensively prepared to provide effective leadership in all management functions;
2) lack of links for planning and preparing decisions;
3) information overload, many contacts with subordinates, superiors and shift structures;
4) concentration of power in the management elite.
Functional organizational structure of management. Functional management is carried out by a certain set of departments specialized in performing specific types of work necessary for making decisions in the line management system (Fig. 2.2).
The idea is that the performance of certain functions is assigned to specialists. In an organization, as a rule, specialists of the same profile are united into structural divisions (departments), for example, the marketing department, the reception and accommodation department, the planning department, etc. Thus, the overall task of managing an organization is divided, starting from the middle level, according to functional criteria. Hence the name - functional management structure.
Rice. 2.2. Functional structure of organization management
Functional management exists alongside linear management, which creates double subordination for performers.
As can be seen from Figure 2.2, instead of universal managers (see Figure 2.1), who must understand and perform all management functions, a staff of specialists appears who have high competence in their field and are responsible for a certain area (for example, planning and forecasting). This functional specialization of the management staff significantly increases the performance of the hotel.
Like a linear structure, a functional structure has its advantages and disadvantages.
Advantages of a functional structure:
1) high competence of specialists responsible for the implementation of specific functions;
2) freeing up line managers to solve some special issues;
3) standardization, formalization and programming of phenomena and processes;
4) eliminating duplication and parallelism in the performance of management functions;
5) reducing the need for general specialists.
Disadvantages of the functional structure:
1) excessive interest in achieving the goals and objectives of “their” departments;
2) difficulties in maintaining constant relationships between various functional services;
3) the emergence of trends of excessive centralization;
4) the duration of decision-making procedures;
5) a relatively frozen organizational form that has difficulty responding to changes.
The disadvantages of both linear and functional structures are largely eliminated by linear-functional structures.
Linear-functional (headquarters) structure of hotel management. With such a management structure, full power is assumed by the line manager, who heads a certain team. When developing specific issues and preparing appropriate decisions, programs, plans, he is assisted by a special apparatus consisting of functional units (directorates, departments, bureaus, etc.) (Fig. 2.3).
In this case, the functional structures of the unit are subordinate to the chief line manager. They carry out their decisions either through the chief executive or (within the limits of their authority) directly through the relevant heads of performing services.
Rice. 2.3. Linear-functional management structure
Thus, the linear-functional structure includes special units under line managers.
The linear-functional structure also has its advantages and disadvantages.
Advantages of a linear-functional structure:
1) better preparation of decisions and plans related to the specialization of workers;
2) freeing the chief line manager from detailed analysis of problems;
3) the possibility of attracting consultants and experts.
Disadvantages of a linear-functional structure:
1) lack of close relationships and interaction at the horizontal level between production departments;
2) insufficiently clear responsibility, since the person preparing the decision, as a rule, does not participate in its implementation;
3) an overly developed system of vertical connections, that is, a tendency towards excessive centralization.
The organizational structures considered are basic and can be detailed in relation to a specific management object.
The organizational structure of a hotel enterprise is determined by its purpose, room capacity, the specifics of guests and a number of other factors.
A typical pyramidal structure of hotel management is shown in Fig. 2.4.
Despite the fact that all hotel managers perform managerial functions, they cannot be said to be engaged in the same type of work activity. Individual managers have to spend time coordinating the work of other managers, who, in turn, coordinate the work of lower-level managers, and so on to the level of the manager who coordinates the work of non-managerial personnel - the people who produce products and provide services. The shape of the pyramid in the figure indicates that at each subsequent level of management, starting from the bottom, there are fewer people than at the previous one.
Rice. 2.4. Typical pyramidal hotel management structure
The highest level of hotel management is represented by the hotel owner and general director, who make overall strategic decisions. In this case, the owner can be an individual or an entire corporation.
An example of a strategic goal of a hotel enterprise, which is determined by the owner himself, could be the enterprise’s focus on serving a certain segment of the group market: tourists or individual tourists, tourists seeking relaxation and health restoration, or participants in congresses and conferences, etc.
In furtherance of the strategic goal, the owner may also establish that a restaurant located as part of a hotel complex will provide food only to its guests. The second example, arising from the main goal of the enterprise, could be the establishment of a certain price level for hotel accommodation.
Such decisions and tasks fall into the general category, on which the size of the enterprise and the choice of location for its construction, architecture and interior, furniture, equipment, and personnel selection depend.
Rice. 2.5. Approximate organizational structure of a large hotel complex
show that at the highest level they take about 10%, at the average - 50% and at the lowest - about 70% of the total time of managers (Fig. 2.6).
Rice. 2.6. Classification of time spent by managers by types of activities and levels of management
This distribution of total time is due to the fact that managers of all three levels have two types of tasks: management tasks and specialty tasks (Fig. 2.7). This means that a manager at any level of management spends a certain percentage of his time on making management decisions and a certain percentage on making decisions in his specialty. As can be seen from Figure 2.7, with an increase in the level of management, the specific weight given in the specialty falls, and in management, accordingly, it increases.
Rice. 2.7. Distribution of working time by management and specialty
Depending on the size and type of organization, its sectoral and territorial characteristics, and second factors, the characteristics of the composition and functions of managers at each of the three levels of management can vary significantly.
The organization is managed in accordance with a certain structure. It is developed in the company taking into account the specifics of its activities. Let us next consider what a linear-functional management structure is.
General information
Production areas
The functional structure presupposes the presence of heads of departments involved directly in the production of products (rendering services). In most cases, they are called production site foremen. They not only provide leadership, but also:
Loading and unloading units
Their managers organize accounting of containers according to the rules and analyze the results of its processing. They also develop measures to eliminate downtime. The responsibilities of supervisors include:
- Ensuring fulfillment of shipping plans.
- Reception and transmission of notifications about the upcoming supply of containers, their readiness for cleaning, etc.
Chief Engineer
He heads the company's technical divisions. Its tasks include ensuring the proper condition of equipment and organizing a system of scheduled preventive maintenance. The specialist may be directly subordinate to:
- OT Engineer.
- Chief Power Engineer.
- Warehouse Manager.
- Mechanic.
Accounting
Any functional structure of a company requires the presence of this department. Management is carried out by the chief accountant. He, in turn, reports to the director of the company. The responsibilities of the chief accountant are as follows:
Economic department
The tasks of this division include drawing up long-term plans (quarterly and annual) for financial and economic activities, developing projects for the volume of work and wages for production areas. The head of the department is a senior economist. His responsibilities include:
- Analysis of previous prices and establishment of new prices for the reception, storage, and shipment of raw materials and products.
- Carrying out timekeeping, developing local production and time standards, familiarizing workers with them.
- Monitoring compliance with established indicators, etc.
HR department
This division maintains records of the company's personnel, its divisions, and approved documentation. The department is headed by a personnel inspector. He is obliged:
- Process the hiring, transfer, and dismissal of employees in accordance with the Labor Code, instructions, regulations and orders of the director of the company.
- Study the movement and reasons for personnel turnover, participate in the development of measures to stabilize the staff.
- Monitor the implementation of labor discipline and compliance with the company’s internal regulations, etc.
System Analysis
The functional structure cannot remain unchanged during constant economic transformations. In this regard, the system requires some adjustments. Hierarchical management organization is effective in large companies, where it is necessary to ensure clear and coordinated work of a large staff of employees carrying out activities to achieve a common goal of the enterprise. Such a system allows you to mobilize the energy of people and cooperate their labor to implement complex projects in large-scale and mass production. The functional structure ensures ease of administration and consistency of actions.
1. Concept and essence of linear-functional structure
The management mechanism of the organization is put into action using the developed management structure.
Linear-functional - a management structure that combines both linear and functional principles of organization between the production management elements of the system.
It is interesting that the linear management links are called upon to command, and the functional links are called upon to advise, help in developing specific issues and preparing appropriate decisions and plans.
The linear-functional management structure is based on the mine principle, according to which for each of the functions - linear or headquarters - a hierarchy of services (mine) is formed, permeating the entire organization from top to bottom. The linear-functional structure is often called traditional or classic and is provided for a medium-sized organization.
Features of the linear-functional structure are:
· stable operation of the structure
Satisfactory performance in a sustainable production environment
· focus on price competition
The disadvantages of a linear-functional management structure are:
· differences in goals among structural units
· weak linkage and responsibility for solving the complex problem of achieving the company’s goals
It is not suitable for conditions in which the internal and external parameters of the organization’s activities are constantly changing. Under these conditions, its use leads to irrational distribution of information flows, exceeding controllability standards, especially among senior managers.
The linear-functional structure allows you to largely eliminate the shortcomings of both linear and functional management. With this structure, the purpose of functional services is to prepare data for line managers in order to make competent decisions or emerging production and management tasks. The role of functional bodies (services) depends on the scale of economic activity and the management structure of the enterprise as a whole. The larger the company and the more complex its management system, the more extensive the apparatus it has. In this regard, the issue of coordinating the activities of functional services is acute. Linear-functional management structures are used in most enterprises.
2. Analysis of the activities of OJSC “Vargashinsky Elevator”
2.1 Organizational and economic characteristics of the enterprise
organizational line management
In August 2010 Open Joint Stock Company "Vargashinsky Elevator" will celebrate its 87th anniversary. The history of the establishment of the enterprise goes back to 1923. It was created as a point for collecting and transferring grain to the state. Initially, the enterprise had only two grain warehouses with a total capacity of 500 tons. Five years later in 1928. A wooden grain silo storage building with a capacity of 6000 tons was put into operation. As the harvest of grain crops in the area increases, the volume of grain storage at the elevator also increases. In 1962 The second one was put into operation, and in 1970. third grain silo storage building. In 1994 on the basis of the privatization plan for the state enterprise “Vargashinsky Elevator” in accordance with the State Privatization Program for State and Municipal Enterprises in the Russian Federation for 1992, approved by the Supreme Council of the Russian Federation on June 11, 1992. transformed into an open joint stock company. Today, the grain storage volume at the elevator is 50,000 tons. Production areas are located on 11 hectares. Over the past ten years, like all enterprises in this industry, it has undergone global reform.
The company was created by transforming the Vargashinsky Elevator enterprise, is its legal successor and was established in accordance with the Law “On the Privatization of State Enterprises in the Russian Federation”. Location of the Company: Russian Federation, Kurgan region, working village of Vargashi.
The charter is the only constituent document.
Postal address of the Company: Russian Federation, Kurgan region, working village of Vargashi, Sotsialisticheskaya street, 59.
The full corporate name of the Company is Open Joint Stock Company “Vargashinsky Elevator”.
The abbreviated corporate name of the Company is OJSC “Vargashinsky Elevator”.
The society is legal. person and owns separate property, accounted for on its independent balance sheet, can, in its own name, acquire and exercise property and personal non-property rights, bear responsibilities, and be a plaintiff and defendant in court.
The company is liable for its obligations with all its property.
Shareholders are not liable for the obligations of the Company and bear the risk of losses associated with the activities of the Company, within the limits of the value of the shares they own. The company is not liable for the obligations of shareholders.
The authorized capital of the Company is 61,500 rubles. The authorized capital is divided into 6,150 shares, of which 4,612 are ordinary registered shares and 1,538 preferred registered shares. All shares of the Company have a par value of ten rubles each.
The shareholders include 49 people. Major shareholders, owning at least 5% of its share capital or at least 5% of its ordinary shares, are five people.
In accordance with the charter, the objectives of the enterprise are:
Maximum satisfaction of the needs of agricultural producers with the available and intended fixed assets of the enterprise;
Providing employees of the enterprise with the necessary conditions for effective production activities, improving their financial and social situation;
Making a profit
The objectives of the enterprise are as follows:
Ensuring the volume of grain crop procurement required for the district and region;
Ensuring the safety of the quality of accepted grain;
Creating the necessary amenities for clients;
Rational use of material, labor and financial resources;
Development and reconstruction of the material base;
Improving forms and methods of management and management
The main activities include:
Purchase, acceptance, post-harvest processing and storage of grain resources;
Processing and storage of customer-supplied grain and supply of bakery products;
Production, processing and sale of agricultural products;
Commercial, intermediary, trading activities;
Wholesale, retail trade;
Provision of warehousing services;
Renting out property.
To carry out certain types of activities, the company has four licenses:
1 storage of grain and products of its processing;
2 activities for the operation of gas networks, including: maintenance, repair and restoration of gas pipelines, structures and other facilities necessary for the operation of gas networks;
3 operation of explosive production facilities (hazardous production facilities) at which: substances capable of forming explosive mixtures with atmospheric oxygen or with each other (flammable gases, flammable and hot liquids, dust-forming substances capable of spontaneous decomposition with explosion;
4 carrying out activities for hazardous waste management
3. Analysis of the organizational management structure of the organization
The organizational structure of management at Vargashinsky Elevator OJSC (Appendix 3) is linear-functional and represents a hierarchy of management, a clear division of labor, and the use of qualified specialists in each position. It is based on the principle of unity of distribution of orders, according to which only a higher authority has the right to give orders. Compliance with this principle should ensure unity of management.
This organizational structure was formed as a result of building a management apparatus from mutually subordinate bodies in the form of a hierarchical ladder, that is, each subordinate has one leader, and the leader has several subordinates. Elements of the structure are carriers of certain management powers. Authority is a set of officially granted rights and responsibilities for independent decision-making,
give orders and carry out certain actions in the interests of the organization. The divisions and employees of an enterprise that perform a specific management function form production, technical and economic subsystems.
The following structural divisions are distinguished at Vargashinsky Elevator OJSC: the first production section, the second production section, the grain drying section, the loading and unloading section, the production and technical laboratory, the mechanical workshop, the electrical shop, the accounting department, and the paramilitary (sentry) security.
The general management of the enterprise is carried out by the general director, he coordinates the work of the subsystems and divisions of the enterprise, organizes the implementation of planned tasks in a timely manner, ensures the safe operation of buildings, structures and production premises, the correct organization of warehouse and transport facilities, as well as the correct management of the technological process as a whole for the enterprise .
