The management principle that each person should report to only one manager. Refers to the rights inherent in a managerial position to tell people what to do and to expect them to do it. In the earlier days of mass production, efficiency was the most important performance indicator for any organization.
The business objectives of the division can be formulated more objectively and the expectations can be better agreed. Selection and promotion of personnel based upon technical competence and excellence: Although the project manager has a full-time role, he will have a part time project management administrative staff under him.
In unpredictable times and settings, organic designs such as the team-based structure shine. For example, if you own a comic book store, it would be effective for you to try to sell as many comic books and collectibles as possible, but it would be ineffective to pursue the goal of becoming the comic book store that has more sales than any other comic book store in the entire state.
Since efficiency is about doing things right, it demands documentation and repetition of the same steps. The project manager will have authority over the administrative part of the project, such as what to do, follow-up on the schedule, evaluate the performance, etc.
The system of promotions corresponds to seniority or merit or both. This is also sometimes referred to as a "planned economy.
Consumer preferences and resource scarcity determine which goods are produced and in what quantity; the prices in a market economy act as signals to producers and consumers who use these price signals to help make decisions.
Efficiency is restricted to the present state whereas effectiveness involves thinking long term. Employees have to do their regular work along with the additional project-related work, which can exhaust them.
The unbiased approach predictably leads to optimal efficiency. Milton Friedmanan American economist, noted that command economies must limit individual freedom to operate. The matrix organization structure usually exists in large and multi-project organizations, where they can relocate employees whenever and wherever their services are needed.
It is finally superior both in intensive efficiency and the scope of operations and is formally capable of application to all kinds of administrative tasks.
He also believed that economic decisions in a command economy would be made based on the political self-interest of government officials and not promote economic growth. Not only can teams be rapidly deployed, employees feel empowered to rise to challenges, creating a fertile ground for inspired solutions, products and services.
This would lead to necessarily massive shortages and surpluses. A matrix structure is expensive to maintain. The collective term for these uncoordinated exchanges is the "market.
These procedures must be time tested and equally applicable under similar situations at work.
Elements of Organizational Efficiency Organizational efficiency is all about figuring out how you can be more effective by using fewer resources, as well as less time and less money to achieve the same goal.
The obligation to perform any assigned duties. If an organization had to give up one of these five parts, which one could it survive the longest without? It is also considered to be a better form of organization if the employees seek autonomy, openness, change, support for creativity and innovation and opportunities to try new approaches.
Therefore, decision-making power should be distributed to lower ranks, which should get empowered in making decisions. The activity in a market economy is unplanned; it is not organized by any central authority but is determined by the supply and demand of goods and services.
Efficiency, however, is always about the financial costs and the results of doing something. The units that offer support to other functional units, like human resource or IT department, do not contribute directly to the revenue, yet they are essential components that helps in running the organization smoothly.
Functional units are effective when the organization has only few products or is small in size; the drawback of limited view of the entire organization gets negligible.
Strengths of divisional structure Clear Accountability: Because of the rules and policies governing the organization, employees are protected against arbitrary dismissal or demotion. Hence it harvests the potential of the unit without duplication of scarce resources, maximizing their utilization. The responsibility of successfully integrating the organization lies with few top level executives, at the same time, the organizational structure limits the capabilities of the functional managers to occupy top management positions.
Do you think nonprofit managers have to pay more attention to stakeholders than do business managers?Difference between Mechanistic & Organic Structure!
The organizational structure is designed both from mechanistic as well as humanistic point of view and the structure depends upon the extent to which it is rigid or flexible. Jun 28, · 3 The Difference Between Efficiency & Effectiveness in Strategic Management 4 Elements of Efficient Organizational Structure In business, success depends in large part on how well your team is able to adhere to work procedures to achieve the intended or expected results.
Efficient Performance versus the Learning Organization From Vertical to Horizontal Structure Generally, little collaboration occurs across functional departments, and the whole organization is coordinated and controlled through the vertical hierarchy, Decision-making authority residing with upper-level managers%(6).
The differences found between those managers being promoted and those managers judged as most effective point to the need for organizations to properly identify and reward good performance.
Short-run solutions may focus on performance appraisal and reward systems; long-run solutions may involve the development of cultural values that support.
Organization Design Chapter 1: Why is shared information so important in a learning organization in comparison to an efficient performance organization? Discuss how an organization’s approach to sharing information may be related to other elements of organization design such as: structure, tasks, strategy, and culture.
The aim of the research is to discuss organizational performance within entities effectiveness and efficiency perspective. The objectives: 1) to identify the features of the efficiency and the effectiveness concepts; 2) to explore the differences and proximities between effectiveness and efficiency.Download