Organization Structures and Business Process

Introduction

Organization Structures and Business Process are crucial components of Management Information Systems (MIS). In this topic, we will explore the importance of organization structures and business process in MIS and understand their fundamentals.

Types of Organization Structures

Organization structures define the hierarchy, relationships, and coordination within an organization. There are several types of organization structures commonly used in businesses:

Functional Organization Structure

The functional organization structure groups employees based on their specific functions or roles within the organization. This structure is commonly found in small to medium-sized businesses where employees have specialized skills.

Advantages of the functional organization structure include:

• Clear lines of authority and responsibility
• Specialization and expertise in specific functions
• Efficient use of resources

However, there are also disadvantages to this structure:

• Limited communication and coordination between functions
• Slow decision-making process

Real-world examples of companies using the functional organization structure include Ford Motor Company and Procter & Gamble.

Divisional Organization Structure

The divisional organization structure groups employees based on the products, services, or geographic locations they are responsible for. This structure is commonly found in larger organizations with multiple divisions or business units.

Advantages of the divisional organization structure include:

• Flexibility and adaptability to different markets or regions
• Faster decision-making process within each division

However, there are also disadvantages to this structure:

• Duplication of resources and functions across divisions
• Limited coordination and communication between divisions

Real-world examples of companies using the divisional organization structure include General Electric and Procter & Gamble.

Matrix Organization Structure

The matrix organization structure combines elements of both functional and divisional structures. In this structure, employees report to both functional managers and project managers, creating a dual reporting system.

Advantages of the matrix organization structure include:

• Efficient use of resources and expertise
• Flexibility and adaptability to changing project needs

However, there are also disadvantages to this structure:

• Complex reporting relationships and potential conflicts
• Increased coordination and communication challenges

Real-world examples of companies using the matrix organization structure include IBM and Microsoft.

Network Organization Structure

The network organization structure is a flexible and decentralized structure that relies on strategic alliances, partnerships, and outsourcing. In this structure, organizations collaborate with external entities to achieve their goals.

Advantages of the network organization structure include:

• Access to specialized resources and expertise
• Flexibility and adaptability to changing market conditions

However, there are also disadvantages to this structure:

• Lack of control over external entities
• Potential conflicts and coordination challenges

Real-world examples of companies using the network organization structure include Apple Inc. and Nike.

Understanding Business Process

Business process refers to a series of activities that organizations perform to achieve specific goals or deliver value to customers. Understanding business process is essential for effective management of information systems.

Key Components of Business Process

The key components of a business process include:

1. Inputs: These are the resources, data, or information required to initiate and execute the process.

2. Activities: These are the tasks or actions performed to transform inputs into outputs.

3. Outputs: These are the results or outcomes of the process that provide value to customers or stakeholders.

Business Process Modeling

Business process modeling involves creating visual representations of business processes to understand, analyze, and improve them. It helps organizations identify inefficiencies, bottlenecks, and areas for improvement.

There are various techniques and tools available for business process modeling, including flowcharts, swimlane diagrams, and Business Process Model and Notation (BPMN).

Business Process Improvement

Business process improvement aims to enhance the efficiency, effectiveness, and quality of business processes. It involves identifying bottlenecks, analyzing process performance, and implementing changes to optimize the process.

Some common techniques for business process improvement include:

1. Identifying and Analyzing Bottlenecks: Bottlenecks are points in a process where the flow of work is slowed down or interrupted. By identifying and analyzing bottlenecks, organizations can take steps to eliminate or mitigate them.

2. Redesigning and Automating Processes: Redesigning processes involves rethinking and restructuring the sequence of activities to eliminate unnecessary steps or streamline the flow. Automation involves using technology to automate manual tasks and improve process efficiency.

Real-world examples of business process improvement include companies like Toyota, which implemented the Toyota Production System to improve manufacturing processes, and Amazon, which optimized its order fulfillment process using automation and robotics.

Conclusion

In conclusion, organization structures and business process are essential components of Management Information Systems. Different types of organization structures, such as functional, divisional, matrix, and network structures, have their own advantages and disadvantages. Understanding business process, including its key components, modeling techniques, and improvement strategies, is crucial for organizations to achieve operational efficiency and deliver value to customers. By mastering these concepts, managers can make informed decisions and drive organizational success in the digital age.

Summary

Organization Structures and Business Process are crucial components of Management Information Systems (MIS). Different types of organization structures, such as functional, divisional, matrix, and network structures, have their own advantages and disadvantages. Understanding business process, including its key components, modeling techniques, and improvement strategies, is crucial for organizations to achieve operational efficiency and deliver value to customers.

Analogy

Organization structures can be compared to the framework of a building. Just as a building's structure determines how different parts are organized and connected, an organization's structure determines how different functions and roles are organized and coordinated. Similarly, business process can be compared to the assembly line in a factory. Just as an assembly line consists of inputs, activities, and outputs to produce a final product, a business process consists of inputs, activities, and outputs to deliver value to customers.