Organizational Structure


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Organizational Structure

  2. 2. Organization is when two or more person work together with a common goal.
  3. 3. ORGANIZING  to achieve coordinated effort by defining task and authority relationships  determining who does what and who reports to whom  that involves developing an organizational structure
  4. 4. ORGANIZATIONAL STRUCTURE  refers to the division of labor as well as the patterns of coordination, communication, work flow, and formal power that direct organizational activities  Organizational design- process of creating and modifying organizational structures.
  5. 5. ORGANIZATIONAL STRUCTURE (cont’d) TWO FUNDAMENTAL PROCESSES  Division of Labor  Coordination FOUR MAIN ELEMENTS     Span of Control Centralization Formalization Departmentalization
  6. 6. TWO FUNDAMENTAL PROCESSES Division of Labor • subdivision of work into separate jobs assigned to different people • leads to job specialization • increases work efficiency
  7. 7. TWO FUNDAMENTAL PROCESSES (cont’d) Coordinating Work Activities • Informal Communication – Sharing information on mutual tasks • Direct communication • Integrator roles • Formal Hierarchy – Assigning legitimate power to individuals • Direct supervision • Corporate structure • Standardization – Creating routine patterns of behavior or output • Standardized skills • Standardized processes • Standardized output
  8. 8. FOUR MAIN ELEMENTS: SPAN OF CONTROL  The number of people directly reporting to the next level in the organizational hierarchy.  Tall Structure  Flat Structure
  9. 9. FOUR MAIN ELEMENTS: SPAN OF CONTROL (cont’d) Tall Structure
  10. 10. FOUR MAIN ELEMENTS: DEPARTMENTALIZATION • The organizational chart represents the fourth element in the structuring of organizations • Specifies how employees and their activities are grouped together • It is a fundamental strategy for coordinating organizational activities • Establishes the chain of command • Creates common measures of performance • Encourages coordination through informal communication among people and sub units.
  11. 11. FOUR MAIN ELEMENTS: DEPARTMENTALIZATION (cont’d) Five Types: • Simple Structure • • • • Functional Structure Divisional Structure Matrix Structure Team-Based (Lateral) Structure
  12. 12. FOUR MAIN ELEMENTS: DEPARTMENTALIZATION (cont’d) Simple Structure • Most companies/ organizations begin with simple structure • There is minimal hierarchy • Flexible but they usually depend on the owner’s direct supervision to coordinate work activities. • Difficult to operate under complex conditions Functional Structure • Organizes employees around specific knowledge or other resources • Foster professional identity and clarify career paths • Tend to have higher dysfunctional conflict and poorer coordination with other work units
  13. 13. FOUR MAIN ELEMENTS: DEPARTMENTALIZATION (cont’d) Divisional Structure • Groups employees around geographic areas, clients, or outputs. • Accommodates growth and focuses employee attention on services or customers rather than tasks. • This structure creates silos of knowledge and duplication of resources. Matrix Structure • Overlays two organizational forms in order to leverage the benefits of both • Requires more coordination than functional or pure divisional, may dilute accountability and increases conflict.
  14. 14. FOUR MAIN ELEMENTS: DEPARTMENTALIZATION (cont’d) Team-Based (Lateral) Structure • Flat hierarchy and relatively little formalization, consisting of self directed work teams responsible for various work processes. Management Team Employee Employee Employee Employee Employee Employee Employee Employee
  15. 15. Thank You! Reference: Organizational Behavior by McShane and Von Glinow Third Edition