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  • 2. DEFINITION 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 environment. The key in defining an organization is that it has a definite structure for a purpose.
  • 3. Key terms used in organizational design and structure Work specialization • the degree to which organizational tasks are subdivided into individual jobs. Chain of command • an unbroken line of authority showing who reports to whom. Span of control or • the number of employees span of reporting to a supervisor management
  • 4. Centralization • the location of decision authority at the top management level. Decentralization • location of decision authority near the lower organizational levels. Departmentalization • grouping individuals into departments and departments into the total organization.
  • 5. ORGANIZATIONAL STRUCTURE • There are five approaches to designing an organization: 1. Functional 2. Divisional 3. Matrix 4. Teams 5. Networks Traditional approaches Contemporary approaches
  • 6. FUNCTIONAL STRUCTURE • Grouping of positions into departments based on similar skills, expertise and resources. President (Managing Director) Marketing Finance HRM Manufacturing
  • 7. DIVISIONAL STRUCTURE • Divisional structures are grouped on the basis of common products or services, geographic markets, or customers served. CEO Caribbean R&D HRM finance Central America Marketing North America
  • 8. MATRIX STRUCTURE • An organizational structure that arranges work groups on two dimension simultaneously.
  • 9. TEAM STRUCTURE • The team approach gives managers a way to delegate authority and a means to be more flexible and responsive to the competitive environment. Cross-functional teams • employees from many functional departments are permanently assigned to solve ongoing problems. Permanent team structure • employees working together on a project