Organisational structure of a corporation
A "corporation" is an organisational entity that engages in economic activities such as production, sales, and provision of services typically for the purpose of making profit. In the narrow sense, it refers to a private corporation such as a "stock company" or "limited liability company". In the wider sense, it also includes public corporations in which the government has a stake.
An "organisation" is a collective entity that has been assembled and integrated into system to achieve a common purpose.
(1) Structure of a corporation
A corporation is an organisation that is structured according to task in order to conduct operations efficiently.
There are various forms of organisation including functional organisations, divisional system organisations, matrix organisations, and project organisations.
- Functional organisation
A "functional organisation" is structured bijou function such as manufacturing, sales, marketing, accounting, and human resources. This type of organisation's key characteristic is that it enables the pursuit of specialisation and efficiency in each job function, which in turn allows each organisation to produce high quality results. At the same time, there is a tendency for boundaries to develop between each functional organisation, and issues can arise from departments acting in their best interest.
A functional organisation is comprised of a "line (direct) department" and a "staff (indirect) department". A line department is directly involved in the areas of earning profit such as sales, production, and materials. A staff department supports the line department in areas such as human resources, accounting, and general affairs.
- Hierarchical organisation
A "hierarchical organisation" is an organisation form with a hierarchical structure so that there is typically one chain of command. For example, in a hierarchical organisation, there are a number of departments below the president. Below these departments are sections that are responsible for different business segments.
This organisation's key characteristic is that it facilitates the spread of corporate policies throughout the organisation.
- Divisional system organisation
A "divisional system organisation" is separated along the lines of product, region, or market with each business division having it's own department, either partially or in entirety.
This organisation's key characteristic is that since each business division is capable of performing a broad base of functions, it is possible to issue unified directions so as to rapidly accommodate shifting market needs.
In principle, each business division conducts it's own accounting, and is responsible for operating business and generating profits independently.
- Matrix organisation
A "matrix organisation" is an organisation from often employed by major enterprises and global corporations, and is structured along multiple chins of command such as function and region or function and product.
Since this organisation takes the form of multiple managers overseeing the persons that do the work, there is potential for confusion in the chain of command. At the same time, departmental boundaries are eliminated due to the sharing of work.
- Company system organisation
A "company system organisation" refers to a structure that separates business divisions, and administrates the departments as independent companies. This increases the autonomy of the organisation and enhances it's ability to adapt to it's environment. The organisational structure is similar to the divisional system organisation, but under the company system organisation, there is greater freedom and discretion to make human resources decisions.
- Project organisation
A "project organisation" is temporarily structured along the lines of personnel who have various specialised capabilities, and is separate from a standing organisation. It is only intended as a temporary organisation and is disbanded once the purpose is achieved.
(2) Departmental structure
The corporate organisation is comprised of "departments" that are separated by the content of work they are responsible for. To facilitate computerisation, it is necessary to have a precise grasp of where a department is positioned within the corporation.
Notes :
- Business objective - A "business objective" is a medium or long-term goal that is set in order to fulfil the corporate philosophy or corporate objective.
- Management resources for business management - Management resources within the context of business management refer to people (human resources), materials (assets), money (finances), and information (information management).
- Formal organisation - A "formal organisation" is a collective entity that is clearly defined by an organisational purpose or company rules. Formal organisations include companies and institutions.
- Informal organisation - An "informal organisation" is a collective entity that is not clearly defined by organisational rules or regulations, although it has an overall purpose.
- Staff department - The staff department includes the following departments : Human resources, accounting, general affairs, and information systems.
- Line department - The line department includes the following departments : Sales, production, and materials.
- Matrix organisation
A "matrix organisation" is an organisation from often employed by major enterprises and global corporations, and is structured along multiple chins of command such as function and region or function and product.
Since this organisation takes the form of multiple managers overseeing the persons that do the work, there is potential for confusion in the chain of command. At the same time, departmental boundaries are eliminated due to the sharing of work.
- Company system organisation
A "company system organisation" refers to a structure that separates business divisions, and administrates the departments as independent companies. This increases the autonomy of the organisation and enhances it's ability to adapt to it's environment. The organisational structure is similar to the divisional system organisation, but under the company system organisation, there is greater freedom and discretion to make human resources decisions.
- Project organisation
A "project organisation" is temporarily structured along the lines of personnel who have various specialised capabilities, and is separate from a standing organisation. It is only intended as a temporary organisation and is disbanded once the purpose is achieved.
(2) Departmental structure
The corporate organisation is comprised of "departments" that are separated by the content of work they are responsible for. To facilitate computerisation, it is necessary to have a precise grasp of where a department is positioned within the corporation.
Notes :
- Business objective - A "business objective" is a medium or long-term goal that is set in order to fulfil the corporate philosophy or corporate objective.
- Management resources for business management - Management resources within the context of business management refer to people (human resources), materials (assets), money (finances), and information (information management).
- Formal organisation - A "formal organisation" is a collective entity that is clearly defined by an organisational purpose or company rules. Formal organisations include companies and institutions.
- Informal organisation - An "informal organisation" is a collective entity that is not clearly defined by organisational rules or regulations, although it has an overall purpose.
- Staff department - The staff department includes the following departments : Human resources, accounting, general affairs, and information systems.
- Line department - The line department includes the following departments : Sales, production, and materials.
- Company system organisation
A "company system organisation" refers to a structure that separates business divisions, and administrates the departments as independent companies. This increases the autonomy of the organisation and enhances it's ability to adapt to it's environment. The organisational structure is similar to the divisional system organisation, but under the company system organisation, there is greater freedom and discretion to make human resources decisions.
- Project organisation
A "project organisation" is temporarily structured along the lines of personnel who have various specialised capabilities, and is separate from a standing organisation. It is only intended as a temporary organisation and is disbanded once the purpose is achieved.
(2) Departmental structure
The corporate organisation is comprised of "departments" that are separated by the content of work they are responsible for. To facilitate computerisation, it is necessary to have a precise grasp of where a department is positioned within the corporation.
Notes :
- Business objective - A "business objective" is a medium or long-term goal that is set in order to fulfil the corporate philosophy or corporate objective.
- Management resources for business management - Management resources within the context of business management refer to people (human resources), materials (assets), money (finances), and information (information management).
- Formal organisation - A "formal organisation" is a collective entity that is clearly defined by an organisational purpose or company rules. Formal organisations include companies and institutions.
- Informal organisation - An "informal organisation" is a collective entity that is not clearly defined by organisational rules or regulations, although it has an overall purpose.
- Staff department - The staff department includes the following departments : Human resources, accounting, general affairs, and information systems.
- Line department - The line department includes the following departments : Sales, production, and materials.
- Business objective - A "business objective" is a medium or long-term goal that is set in order to fulfil the corporate philosophy or corporate objective.
- Management resources for business management - Management resources within the context of business management refer to people (human resources), materials (assets), money (finances), and information (information management).
- Formal organisation - A "formal organisation" is a collective entity that is clearly defined by an organisational purpose or company rules. Formal organisations include companies and institutions.
- Informal organisation - An "informal organisation" is a collective entity that is not clearly defined by organisational rules or regulations, although it has an overall purpose.
- Staff department - The staff department includes the following departments : Human resources, accounting, general affairs, and information systems.
- Line department - The line department includes the following departments : Sales, production, and materials.