What is the organizational structure in China?

Forms of Enterprise Organizational Structure

Linear System

Linear system is one of the earliest and simplest forms of organization. It is characterized by the vertical leadership of administrative units at all levels of the enterprise from top to bottom, with subordinate departments accepting instructions from only one superior, and the persons in charge at all levels being responsible for all issues of the units to which they belong. The factory does not set up another functional organization (can set up functional personnel to assist the person in charge of the work), all management functions basically by the executive in charge of the implementation of their own. The advantages of the linear system of organizational structure is: the structure is relatively simple, clear responsibility, order unity. The disadvantage is that it requires the executive in charge to be versed in a wide range of knowledge and skills and to deal with all kinds of business personally. This is in the case of more complex business, enterprise scale is relatively large, all the management functions are concentrated in the highest director of a person, obviously is not competent. Therefore, the linear system is only applicable to smaller, simpler production technology enterprises, production technology and business management is more complex enterprises is not suitable.

Functional

Functional organizational structure, is the administrative units at all levels, in addition to the person in charge, but also the establishment of a number of functional institutions. For example, in the factory director below the establishment of functional organizations and personnel to assist the factory director in functional management. This structure requires that the administrative head of the corresponding management duties and powers to the relevant functional bodies, the functional bodies have the right to give orders to the lower administrative units within their own business. Therefore, in addition to being directed by the higher administrative head, the lower administrative head must also be subject to the leadership of the various functional bodies at the higher level.

The advantage of the functional system is to adapt to the modern industrial enterprise production technology is more complex, the management of the more delicate characteristics; can give full play to the role of professional management of the functional institutions, reduce the workload of the linear leadership. But the shortcomings are also very obvious: it impedes the necessary centralized leadership and unity of command, the formation of multiple leaders; not conducive to the establishment and sound system of accountability of the administrative officer and functional departments at all levels, in the middle management often appear to have the merits of everyone to grab, there has been the phenomenon of everyone pushed; In addition, in the higher administrative leadership and functional bodies of the guidance and orders contradictory, the lower levels will be at a loss, affecting the normal conduct of work, the normal work. It is easy to cause slack discipline and chaotic production and management order. Because of the obvious defects of this form of organizational structure, modern enterprises generally do not use the functional system.

Linear-functional

Linear-functional, also called the production area system, or linear staff system. It is on the basis of the linear system and the functional system, to complement the shortcomings, drawing on the advantages of these two forms and established. At present, the vast majority of our enterprises use this form of organizational structure. This form of organizational structure is the enterprise management institutions and personnel are divided into two categories, one is the linear leadership institutions and personnel, according to the principle of unity of command at all levels of the organization to exercise the right to command; the other is the functional institutions and personnel, according to the principle of specialization, engaged in the organization of the various functions of the management work. The linear leadership bodies and personnel have a certain degree of decision-making power and command authority over their subordinates within their own areas of responsibility, and are fully responsible for the work of their own departments. Functional agencies and personnel, on the other hand, is the staff of the line commanders, can not give orders to the direct department, can only carry out operational guidance.

The advantages of the linear-functional system are: not only to ensure the centralization and unity of the enterprise management system, but also at all levels of the administrative head of the leadership, to give full play to the role of the professional management bodies. Its shortcomings are: collaboration and cooperation between the functional departments is poor, many of the work of the functional departments directly to the upper leadership to deal with the report, which on the one hand increased the workload of the upper leadership; on the other hand, it also results in low efficiency. In order to overcome these shortcomings, you can set up a variety of integrated committees, or establish a variety of meeting systems to coordinate the work of all aspects of the role of communication, to help the senior leadership of the ideas.

Divisional system

Divisional system was first proposed by Sloan, president of General Motors, in 1924, so there is a "Sloan model", also known as "federal decentralization", is a highly (layer) centralized under the decentralized management system. Decentralized management system. It applies to large-scale enterprises with huge scale, many varieties and complex technology, and is a form of organization adopted by large foreign joint companies, and in recent years, some large-scale enterprise groups or companies in China have also introduced this form of organization. Division system is a form of hierarchical management, hierarchical accounting, self-financing, that is, a company by region or by product category into a number of divisions, from product design, raw material purchases, cost accounting, product manufacturing, until the product sales, are responsible for divisions and affiliated factories, the implementation of separate accounting, independent operation, the company headquarters only retains the personnel to make decisions, budgetary control and supervision of the power, and through profit The company headquarters only retains the personnel decision-making, budget control and supervision power, and through the profit and other indicators of the division for control. Some divisions are only responsible for directing and organizing production, not responsible for purchasing and sales, the implementation of production and supply and marketing separation, but this division is being replaced by the product division. Still other divisions are organized by region.

Simulated Decentralization

This is a form of structure that falls somewhere between the line-function system and the divisional system.

Many large enterprises, such as steel and chemical companies with continuous production, are difficult to break down into several independent divisions due to the limitations of product varieties or production processes. And because of the large size of the enterprise, so that senior managers feel that the use of other organizational forms are not easy to manage, then there is a simulation of decentralized organizational structure. The so-called simulation, that is, to simulate the independent operation of the business unit system, separate accounting, rather than a real business unit, is actually a "production unit". These production units have their own functional institutions, enjoy as much autonomy as possible, with a "simulation" of the profit and loss responsibility, the purpose is to mobilize their production and operation enthusiasm, to improve the production and management of the enterprise. It should be pointed out that the production units due to the continuity of production, it is difficult to separate them completely, in the case of continuous production of petrochemicals, for example, the "products" produced by unit A directly become the raw materials of unit B, which does not need to stop and transit. Therefore, the economic accounting between them, can only be based on internal prices, not market prices, that is, these production units do not have their own independent external market, which is also the difference with the division.

Matrix system

In terms of organizational structure, a structure that has both a vertical leadership system by function and a horizontal leadership relationship by product (project) is called a matrix organizational structure.

The matrix system of organization is to improve the linear functional system of poor horizontal links, lack of flexibility and the formation of a form of organization. It is characterized by the establishment of a specialized task around a cross-functional departments of the specialized agencies, such as the formation of a special product (project) team to engage in new product development work, in research, design, testing, manufacturing of different stages, by the relevant departments to send people to participate in an attempt to achieve the integration of blocks to coordinate the activities of the relevant departments to ensure the completion of the task. This form of organizational structure is fixed, but the staff is variable, who needs, who will come, the task can be left after completion. The project team and the person in charge are also organized and appointed on a temporary basis. Once the task is completed, the team is disbanded and the personnel return to their original units. Therefore, this organizational structure is very suitable for horizontal collaboration and research projects.