Date: 2019-11-04

Table of Contents

Introduction to Organisations 📹0:00

What are organisations and why do we need organisations? Humans beings together are stronger. It suggests that there are roles. Rules. Hierarchy. Efficiency. Organisations exist to help with decision making.

Why do we talk about organisations in an I&E class? Companies are organisations. If we have to develop an idea, we need an organisation. If you set a certain goal, after you achieve the goal, you need to change the organisation. To use as a reference. Identify what works for you.

ICT companies that were present 50 years ago:

Examples of organisations:

Mann Gulch Disaster - Reading Tips 📹12:20

Regarding this incident, the key conclusions for the firefights are:

The key conclusion for the author of the paper is that organisations need to be more resilient - one way is making it more democratic .

The conclusion of the class is that organisations need to have a way of dynamically change their structure.

The Matrix Organisation 📹48:40

The bug in the matrix is that all the transitions are very hard (product A to B, sales to finance) to make and there are double chains of command.

Case Studies 📹54:40


Ubisoft has a matrix/divisional structure which is more centralised and typical for corporations. They have managed to innovate through game pitches.


Valve, on the other hand, has a completely decentralised and flat organisational structure.


Uses an upside-down organisation in which the units are not individuals but cells (or teams).

Type of Organisational Structures

Vertical Functional

An organisation with a functional structure is divided based on functional areas, such as IT, finance, or marketing. Functional departmentalisation arguably allows for greater operational efficiency because employees with shared skills and knowledge are grouped together by function. A disadvantage of this type of structure is that the different functional groups may not communicate with one another, potentially decreasing flexibility and innovation. A recent trend aimed at combating this disadvantage is the use of teams that cross traditional departmental lines.


Divisional structures group various organisational functions into product or regional divisions. Each division contains all the necessary resources and functions within it to support that product line or geography (for example, its own finance, IT, and marketing departments). A multidivisional form (or “M-form”) is a legal structure in which one parent company owns subsidiary companies, each of which uses the parent company’s brand and name. The divisional structure is useful because failure of one division doesn’t directly threaten the other divisions. In the multidivisional structure, the subsidiaries benefit from the use of the brand and capital of the parent company. Disadvantages of divisional structure can include operational inefficiencies from separating specialized function. For the multidivisional structure, disadvantages can include increased accounting and taxes.


The matrix structure is a type of organisational structure in which individuals are grouped via two operational frames. Matrix structures are inherently complex and versatile, making them more appropriate for large companies operating across different industries or geographic regions. Proponents suggest that matrix management is more dynamic than functional management in that it allows team members to share information more readily across task boundaries; it also allows for specialisation that can increase depth of knowledge. A disadvantage of the matrix structure is the increased complexity in the chain of command, which can lead to a higher manager-to-worker ratio and contribute to conflicting loyalties among employees.


The team structure in large organisations is a newer type of organisational structure. A team should be a group of workers, with complementary skills and synergistic efforts, all working toward a common goal. An organisation may have several teams that can change over time. Teams that include members from different functions are known as cross-functional teams. Although teams are characterized as less hierarchical, they typically still include a management structure (or management team). Critics argue that the use of the word “team” to describe modern organisational structures is a fad—that some teams are not really teams at all but merely groups of staff. One aspect of team-based structures likely to persist indefinitely is the integration of team cultures within an broader structure (such as a functional structure with interspersed teams).


The network structure is a newer type of organisational structure viewed as less hierarchical (i.e., more “flat”), more decentralized, and more flexible than other structures. In a network structure, managers coordinate and control relationships that are both internal and external to the firm. The concept underlying the network structure is the social network—a social structure of interactions. Open communication and reliable partners (both internally and externally) are key components of social networks. Proponents argue that the network structure is more agile than other structures. Because it is decentralized, a network organisation has fewer tiers, a wider span of control, and a bottom-up flow of decision making and ideas. A disadvantage of the network structure is that this more fluid structure can lead to more complex relations in the organisation.