Chapter 4
Organizational Structure
Organizational Structure Members
1) Board Of Directors
Chairman and members inside and outside
2) Senior Management
President, CEO, COO, EVPs
3) Senior Operation Managers
VP, division heads
4) Mid-level Operation Managers
HODs, branch/section heads
5) First-level Operation Managers
Immediate supervisors
6) Operative Employees
Technicians, semi-skilled, production workers, unskilled laborers.
Organizational Structure
Organizational
Strategic Tactical Assignments
Strategic Compensation Issues
To develop fair treatment, organizations must consider following strategies;
1) Relating job worth to differences in job requirements.
2) Recognizing the worth and value of employee knowledge and skills.
3) Rewarding employee contributions and the results achieved.
4) Promoting employee continued acquisition and upgrading of knowledge and skills.
5) Supporting team and work-unit cooperative efforts.
6) Designing compensation plans that successfully compete within established labor markets.
7) Aligning compensation of all employees with objectives and goals of the organization.
8) Providing a compensation package that enhances current lifestyles and provides long-term protection
Idea to Product
Idea
Goods & Resources Human
Services required Structure
Actual
Output
Vision Mission
• Broad description of a value • Specific description of how value
organization is providing. is created in market.
• What an org hopes to • How 1 org in different from
become/achieve. another within the same
• Photograph of your future industry.
business. • More actionable than vision.
• It’s more about the “what” of a • It’s more about the “how” of a
business. business.
• It must inspire. • It must direct.
Development Of An
Organization PHILOSOPHY
MISSION
POLICY
ORGANIZATIONAL STRATEGY
OBJECTIVES & GOALS
WORK UNIT ACTIVITIES
TASK INTO JOBS
The Philosophy Of The Organization
• Can be written statements and unwritten behaviors of leaders.
• It establishes core values, beliefs & guidelines to conduct a business.
• Establishes relationship between organization and its stakeholders,
like employees, customers, suppliers, public, share holders,
government.
• Any company can sell Product X or provide Service Y, but what
differentiates you from everyone else in your field is your
company philosophy.
• Basically , it provides standards for guiding employee action.
The Mission Of The Organization
• What an organization wishes to accomplish in long-run.
• It provides the link between organization and environment.
• Sub-ordinate goals, what kind of product and how to provide it.
• It identifies the desired results that must be translated into actions.
• Examples:
• IKEA: To create a better everyday life for the many people.
• ALI BABA: “To make it easy to do business anywhere.”
• WALLMART: “We save people money so they can live better.”
The Policy Of The Organization
• Ensuring proper and acceptable operations, policies are developed.
• They include broad guidelines for directing actions
Human behavior social demands desired out put
The Strategy Of The Organization
• Continues the planning process that started with philosophy, mission
and policy.
• Sub-strategies for different functions like F1, F2, F3 through tactics
• Strategies must
• Be realistic
• Resourceful
• Support org culture to beat competitive advantage
The Objectives And Goals Of The Organization
• Identifies specific output requirements and establishes the levels of
performance needed to accomplish the mission.
• It is a transition point from strategic to tactical considerations where
the organization must determine the most efficient and effective
means of accomplishing its mission.
Work Unit Activities
• Functional statement of specific unit.
• Identifies the principle activities of the work unit - it further assists in
integrating the top-down established organizational objectives and
goals with the assignment of each work unit.
Worker Tasks Into Jobs
• Work unit activities become segregated and assigned to specific
individuals.
• These activities become further identified as the tasks, duties, and
responsibilities of a job.
• Specific knowledge and skill requirements are identified along with a
variety of environmental conditions that make additional demands on
the workers.
Philosophy→Mission→Policy→Strategy→ Objectives→
Work-units→ Task
Organization Must Reward Behaviors That Accomplish Idea-output Process
Vision, Mission & Values of
Gul Ahmed
• Vision
• Setting trends globally in the textile industry. Delivering the best products and services to our customers.
• Mission
• To deliver value to our stakeholders through innovative technology, teamwork and by fulfilling our social
and environmental responsibilities.
• Values
• In achieving its vision and fulfilling its mission, the Company shall operate on the following core
values:
• Integrity
• Passion
• Creativity
• Teamwork
Organizational Hierarchy
• Board of Directors
Establish policy...identify organizational and strategic missions...select
senior management and monitors their performance.
• Chairman of the Board
• Inside and Outside Members
• Senior Management
Responsible for the proper organization and operation of the firm. Responsible
for setting organizational objectives, establishing operating polices, and
defining operating plans.
• President (CEO) (COO)
• Executive/Senior Vice Presidents
Organizational Hierarchy
• Operating Managers
Responsible for meeting daily quality, quantity, and timeliness standards in the goods and services produced in their units.
• Division Heads (VP’s) (GM’s)
• Department Heads
• Plant Managers
• Professionals and Administrators
• Intermediate and First Line-Supervisors
• Sales Personnel
Responsible for presenting the output of the organization to potential customers. Compensation methods for sales
personnel vary from salary only, sales commission only, salary and commission, salary and bonus, and a combination of
salary, bonus, and commission.
• Sales Personnel
• Direct customer contact
• Customer service
• Sales support
• Indirect sales
• Market analysts
Organizational Hierarchy
• Professionals
Their work normally involves the solution of complex technical problems that vary widely and may have a
broad range of interpretations. Normally they hold at minimum an undergraduate degree and may be
required to have a license or certificate to practice.
• Engineers
• Attorneys
• Scientists
• Accountants
• Operative Employees
Make up approximately 75% of the workforce. These employees perform assignments that range from those
given by a few specific and easily understood oral instructions to those requiring knowledge of specific skills
and trades.
• Paraprofessionals / Technicians
• Administrative support
• Skilled craft workers
• Semi-skilled workers
• Unskilled workers
• White * Blue * Pink collar
• Union and nonunion
Regular and Temporary Employees
• Regular Employee
Any person hired for a specific job who is expected to work on a
continuing basis and meet certain minimum performance and time-on-
job requirements.
• Temporary Employee
Any person hired for a special project, or on an as-needed basis, or for
seasonal work, or for any kind of work of a temporary or casual nature.
• Part-time employee
Typically any person working on a continuing basis who works less than a
full-time employee.
Pay Relationships
• Pay Equity
Degree to which the actual pay of an employee matches what he or she thinks
to deserve. High pay equity means high employee satisfaction with his or her
job, low pay equity increases the potential for absenteeism, grievances, strikes,
and turnover. Also called pay satisfaction.
• Pay Ratios
The relationship of executive pay to the pay of lower-level
employees in the same organization.
