Introduction

This unit will deal with the following issues:

How much effect does an organizational structure has on an organization's operations? How do we determine what works for our organization or if we need to reassess the structural design that had been holding well for many years before.

The newly-appointed general manager of Butler Metal Products was considering changes to his firm's shop floor organization.

About two years earlier, his predecessor had switched from a traditional functional hierarchy to focused factories.

Although the changes were accompanied by 35% reductions in inventories, throughput times and defect rates, there was concern that they would not be enough to assure Butler's survival in the economically-stressed automotive industry.

The focused factories were struggling with conflicting demands for shared equipment and human resources.

Did the factories need to be refocused, left alone, or reverted back to the old organization?

This chapter presents you with the fundamentals of organizational design which will help us understand the needs of organizations with relevance to their nature of business and goals.