Greg Pye is the chief executive of a medium sized company that traditionally has been organized hierarchically according to function. After attending a management seminar, he decided to encourage inter-functional departmental co-operation by implementing a matrix structure in the organization. Greg agreed that a matrix organization and cross-functional team working would provide flexibility and enhanced performance to the organization. However, the company secretary drew Greg’s attention to some potential drawbacks. These include the possibility that people won’t know who they are meant to be reporting to, supervision will be difficult for their line manager who thinks they are working in their teams and team leaders will have no real authority over the team members. After speaking to the company secretary, Greg began to have second thoughts about the matrix structure. Greg decides to ask for a more considered view of restructuring the company. Required: Greg Pye has asked you to explain: The advantages of the existing hierarchical structure

(a) The organisational structure defines the communications pattern, the control system and the command structure. The traditional hierarchical structure provides certainty, clarity and clearly. Such a structure defines:
o the communication pathways; the scalar principle provides an unbroken vertical communication line
o the linking mechanisms between management roles
o the allocation of formal responsibilities and authority
o the co-ordinating structure
o the relationships between departments, tasks and people and their duties
o the power structure; where power, control and decision making exists; strong leadership is possible
o management roles and official tasks
o the functional distinction between departments
o specialisation in departments, skills and management; procedures can be standardized
o unity of command; one superior and one source of influence
o the exception principle; decisions can be programmed and planning can form the basis of management
o decisions are made from the perspective of the whole organization



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