Organizational design and structure

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  • 1. Organization Design & StructureOrganization Design & Structure
  • 2. Organizational structureOrganizational structure  The formal configuration between individuals and groups with respect to the allocation of tasks, responsibilities, and authorities within organizations.  The pattern of jobs and groups of jobs in an organization.  A diagram representing the connections between the various departments within an organization: a graphic representation of organizational design –  Organizational Chart
  • 3. Organizational DesignOrganizational Design  The process of coordinating the structural elements of an organization in the most appropriate manner.  The process by which managers create a specific type of organizational structure and culture so that a company can operate in the most efficient and effective way.
  • 4. Factors affecting OrganizationalFactors affecting Organizational StructureStructure Organizational Structure Environment Technology Strategy Human Resources
  • 5. Key Design DecisionsKey Design Decisions Division of Labor - Low - High Departmentalization - Homogeneous - Heterogeneous Span of Control - Less - More Authority - High -Low
  • 6. DIFFERENTIATIONDIFFERENTIATION  Process of deciding how to divide the work in an organization. Ensures that essential tasks are assigned to one or more jobs.  Four Dimensions of Differentiation by Lawrence and Lorsch 1.Manager’s goal orientation 2.Time orientation 3.Interpersonal orientation 4.Formality of struscture FORMS OF DIFFERENTIATION: Horizontal Differentiation  Vertical Differentiation  Spatial Differentiation
  • 7. HORIZONTAL DIFFERENTIATIONHORIZONTAL DIFFERENTIATION  Differentiation between organizational subunits  Based on employees’ specialization  Increases with specialization and departmentalization DEPARTMENTALIZATION The process of breaking up organizations into coherent units.  Functional OrganizationFunctional Organization: The type of departmentalization based on the activities or functions performed (e.g., sales, finance).  Product OrganizationProduct Organization: The type of departmentalization based on the products (or product lines) produced.  Matrix OrganizationMatrix Organization: The type of departmentalization in which a product or project form is superimposed on a functional form.
  • 8. VERTICAL DIFFERENTIATIONVERTICAL DIFFERENTIATION  Difference in authority and responsibility in organizational hierarchy  Tall, narrow organizations-greater vertical differentiation  Flat, wide organizations-less vertical differentiation Tall structures have many levels of authority relative to the organization’s size. Flat structures have few levels but wide spans of control.
  • 9. SPATIALSPATIAL DIFFERENTIATIONDIFFERENTIATION  Geographic dispersion of offices, plants and personnel  Increase in no. of locations-increases complexity but necessary  May give organization political and legal advantages in a country  Horizontal, vertical and spatial differentiation indicate the width, height and breadth of an organizational structural needs
  • 10. INTEGRATIONINTEGRATION Definition- The process of coordinating the different parts of an organization. Designed to achieve unity among individuals and groups . Supports a state of dynamic equilibrium - elements of organization are integrated, balanced.
  • 11. VERTICAL INTEGRATIONVERTICAL INTEGRATION Hierarchical referral Rules and procedures Plans and schedules Positions add to the organization structure Management information system HORIZONTAL INTEGRATIONHORIZONTAL INTEGRATION Liaison roles Task forces Integrator positions Teams
  • 13. Guide to designing structuresGuide to designing structures  How many tasks should a position contain?  How specialized should each task be?  Skills, ability, knowledge and training needed for work?  Basis for grouping positions?  What should be the span of control?  How centralized or de-centralized should the decision making power be?  How standardized should the work content be?  How large should each unit be?
  • 14. ORGANIZATION IMPLICATIONSORGANIZATION IMPLICATIONS  External environment Dynamic vs Stable environments Complex vs Simple environments Diverse vs Integrated environments Hostile vs Munificent environments  Organizational size  Technology  Organizational Strategy
  • 16. 5 Generic Structures – Simple5 Generic Structures – Simple StructureStructure Little or no techno structure Few support staffers Loose division of Labor Minimal differentiation among its units Small managerial hierarchy
  • 17. MACHINE BUREAUCRACYMACHINE BUREAUCRACY  Highly specialized, routine operating tasks  Very formalized procedures in the operating core  Proliferation of rules, regulations, & formalized communication  Reliance on the functional basis for grouping tasks  Relatively centralized power for decision making  Elaborate administrative structure with sharp distinctions between line and staff.
  • 18. PROFESSIONAL BUREAUCRACYPROFESSIONAL BUREAUCRACY Relies for Coordination on  Standardization of Skills  Professionals are hired for the operating core.  Coordination between operating professionals is handled by standardardization of skills and knowledge.
  • 19. DIVISIONALISED FORMDIVISIONALISED FORM Semi Autonomous units  Horizontally Diversified Products and Services  In a straight forward, stable environment  Where Large economies of Scale do not apply
  • 20. ADHOCRACYADHOCRACY Highly Organised structure with,  Little formalization of Behaviour  Job Specialization  Group the Specialists into functional units  Reliance on liaison devices to encourage mutual adjustment