Traditional Form

Over the centuries, the organisational forms have been developed based on traditional management requirements. 

The changes in technology, market environment, knowledge explosion and consumer/shareholder demands have created strains in the traditional organisational forms. The classical management structure which can be satisfactory for control and minimization of conflict, will be something like as shown in Figure.

 Traditional Management Tree

As the technology changes, knowledge expands, and the organisation grows, managers found that organisational activities are not being integrated properly and effectively, quality and productivity are not being controlled effectively and that new conflicts are arising in the well establish formal and informal channels. Search for more innovative organisational forms began to alleviate the integration and conflict problems. But before any attempt is made to search the new form the merits and demerits of traditional form must be discussed thread bare. 

As is clear from Figure, the Chief Executive Officer (CEO or GM) has all the. functional entities necessary to design, construct, develop, market and maintain a product/service. Each such component termed zone or division has a Divisional Executive Officer (DEO). Each such division has a strong.concentration of specialists/experts in its basic functions. Functional Managers (or DEO) can hire a wide variety of specialists and provide them with easy definable paths of career profession, and clear cut responsibilities, authorities and account abilities. The functional managers have their own budgets approved by CEO and have absolute control over it. Depending upon the characteristics and requirements of each function, the divisions establish several departments, sections and subsections in the form of an inverted tree as shown in Figure. 

Following is the point wise listing of the demerits :  

• No one individual is directly responsible for the total project, 
• It does not provide the project oriented emphasis necessary to accomplish the project tasks, 
• Coordination becomes complex - additional lead time is required for approval of decisions, 
• Crisis response time is large - the information flow for decision taking has to be filtered through several layers of management and back, and takes so much time that its relevance is lost, 
• Decision taking process is long, tedious and complex - it normally favours the strongest group in the organisation, 
• There is difficulty in pinpointing the responsibility - normal personnel in the organisation prefer it as failure tolerance in minimal is such organisations, 
• Motivation and innovation do not find preference in such environment productivity is low, and 
• Ideas tend to be functionally oriented with little consideration for on going projects or on overall organisation.