OB lecture 6 systems or network structure

Network and systems structure: Like team Advantages Flexible, dynamic Disadvantages Lack stability => Network structure: It is increasingly the structure for the Modern organizations in fast moving and competitive environment. It is also the design for multinational companies.

Lecture Unit Organizations and Behaviour Systems or Network Structure Systems Structure = Network Structure Systems Structure– called by Drucker - as a relationship focused structure (note the ‘s’ in Systems) Network Structure – used by your text book – page 73, 74, 75, 76, 77 Original of Network/Systems • 1960s – NASA to put a man on the moon before the decade end • Japanese companies have used this system with their suppliers for a long time Today, organizations are faced with a Dynamic and turbulent environment If simple structure is no structure, Then network Structure is non organization (see text book page 73) Increasingly, companies focus on their core competencies, and outsource other functions to other companies e.g Apple focuses on product development and marketing - their core competences Network structure is studied as ‘outsourcing’ in international business “ Distributor Distributor Core firm Supplier Supplier Supplier Network Structure ‘Economy’ of Network Structure Toyota Division Producing ‘Windscreen’ Division (Assembly) An internal division producing windscreen will sell only to in-house It will be less motivated as business is guaranteed ‘Economy’ of Network Structure If ‘outsource’ or Use Network Supplier (Windscreen) Toyota Honda Nissan Supplier sell to Toyota, Honda, and Nissan Specialization and economy of scale achieved This leads to lower cost Why Systems or outsourcing is feasible now Advances in technologies: 1.Communication 2.Transport Communication Techonology Internet Optical fibre Submarine cable Skype Steve Merkell used Skype to coordinates production in Ningbo (China) and USA from Singapore Communication Technology Mr Aung Kyaw Using a set of amplifier, he simply turns on Gtalk for the whole duration of to 10 hours when he is in the office to communicate with his colleague, Mr Kyaw Win in Myanmar, as if they were in the same office Transport Technology - Aircraft 1911, Jet Engine 1945 - Containerization While aircraft and jet engine are sophisticated technology, a simply inventor – container drastically reduces sea-freight cost Without Container Loading days Unloading days Haiphong With Container day day days Singapore Containerization Reduces Cost Without containerization 7+7+3+7+7 = 31 days With Containerization 1+1+3+1+1= days Throughput of a ship is increased by 31/7 = times ! “Network” is Team Structure Team is made up of individuals Network is made up of organizations As such, the elements of a team apply: 1)Clear missions or objectives 2)Complementary roles, or skills 3)Performance standards Network and Systems Structure Like team Advantages Flexible, dynamic Disadvantages Lack stability To make Network Structure Work The crucial importance of face-to-face personal, of constant meeting, and of bringing people into decision making Process NASA initially thought such system would be run by computer based system Members must make efforts to know what Was happened throughout the whole system Network Structure It is increasingly the structure for the Modern organizations in fast moving and competitive environment It is also the design for multi-national companies  ... core competences Network structure is studied as ‘outsourcing’ in international business “ Distributor Distributor Core firm Supplier Supplier Supplier Network Structure ‘Economy’ of Network Structure. . .Systems Structure = Network Structure Systems Structure called by Drucker - as a relationship focused structure (note the ‘s’ in Systems) Network Structure – used by your... individuals Network is made up of organizations As such, the elements of a team apply: 1)Clear missions or objectives 2)Complementary roles, or skills 3)Performance standards Network and Systems Structure