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
A diagram representing the connections between the
various departments within an organization: a graphic
representation of organizational design –
Organizational DesignOrganizational Design
The process of coordinating the structural
elements of an organization in the most
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.
Key Design DecisionsKey Design Decisions
Division of Labor - Low
Departmentalization - Homogeneous
Span of Control - Less
Authority - High
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
4.Formality of struscture
FORMS OF DIFFERENTIATION:
HORIZONTAL DIFFERENTIATIONHORIZONTAL DIFFERENTIATION
Differentiation between organizational subunits
Based on employees’ specialization
Increases with specialization and 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.
VERTICAL DIFFERENTIATIONVERTICAL DIFFERENTIATION
Difference in authority and responsibility in
Tall, narrow organizations-greater vertical
Flat, wide organizations-less vertical
Tall structures have many levels of authority
relative to the organization’s size.
Flat structures have few levels but wide
spans of control.
Geographic dispersion of offices, plants and
Increase in no. of locations-increases complexity
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
Definition- The process of coordinating the
different parts of an organization.
Designed to achieve unity among individuals and
Supports a state of dynamic equilibrium - elements
of organization are integrated, balanced.
VERTICAL INTEGRATIONVERTICAL INTEGRATION
Rules and procedures
Plans and schedules
Positions add to the organization structure
Management information system
HORIZONTAL INTEGRATIONHORIZONTAL INTEGRATION
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
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?
ORGANIZATION IMPLICATIONSORGANIZATION IMPLICATIONS
Dynamic vs Stable environments
Complex vs Simple environments
Diverse vs Integrated environments
Hostile vs Munificent environments
MINTZBERG’S MODEL – ORGANISATIONALMINTZBERG’S MODEL – ORGANISATIONAL
5 Generic Structures – Simple5 Generic Structures – Simple
Little or no techno structure
Few support staffers
Loose division of Labor
Minimal differentiation among its units
Small managerial hierarchy
MACHINE BUREAUCRACYMACHINE BUREAUCRACY
Highly specialized, routine operating tasks
Very formalized procedures in the operating core
Proliferation of rules, regulations, & formalized
Reliance on the functional basis for grouping tasks
Relatively centralized power for decision making
Elaborate administrative structure with sharp
between line and staff.
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
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
Highly Organised structure with,
Little formalization of Behaviour
Group the Specialists into functional units
Reliance on liaison devices to encourage mutual