An informal organization is considered
as a network of personal and social
relationships (alliances, cliques,
friendships) that arise as people
associate with other people in a work
The key in defining an
organization is that it has a
definite structure for a purpose.
Key terms used in organizational
design and structure
• the degree to which
organizational tasks are
subdivided into individual jobs.
• an unbroken line of authority
showing who reports to whom.
Span of control or
• the number of employees
reporting to a supervisor
• the location of decision authority
at the top management level.
• location of decision authority
near the lower organizational
• grouping individuals into
departments and departments
into the total organization.
• There are five approaches to designing an
• Grouping of positions into departments based
on similar skills, expertise and resources.
• Divisional structures are grouped on the basis
of common products or services, geographic
markets, or customers served.
• An organizational structure that arranges
work groups on two dimension simultaneously.
• The team approach gives managers a way to
delegate authority and a means to be more flexible
and responsive to the competitive environment.
• employees from many functional
departments are permanently
assigned to solve ongoing
• employees working together on a