Organizational Structure The way in which job tasks are formally divided, grouped and coordinated.Six Elements of Organizational Structure1. Work Specialization2. Departmentalization3. Chain of command4. Span of control5. Centralization and Decentralization6. Formalization
1. Work specialization The degree to which tasks in an organization are subdivided to separate jobs.2. Departmentalization The basis by which jobs in an organizations are grouped together.
3. Chain of command The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. Authority: The rights inherent in a managerial position to give orders and to expect the orders to be obeyed. Unity of command The idea that a subordinate have only one supervisor to whom he or she is directly responsible.
4. Span of control The number of subordinates a manager can efficiently and effectively direct.5. Centralization The degree to which decision making is concentrated at a single point in an organization
Decentralization The more the lower level personnel provide input or actually given the discretion to make decisions, the more decentralization there is .6. Formalization The degree to which jobs within an organizations are standardized.
Common organizational designs1. Simple structure A structure characterized by a low degree of departmentalization, wide span of control authority centralized in a single person and little formalization
2. Bureaucracy A structure with highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks are grouped into functional departments, centralized authority, narrow span of control and decision making that follows the chain of command.
3. The matrix structure A structure that combines two forms authority and combines functional and product departmentalization. Functional departmentalization. Specialists are working together, which minimizes the number necessary while allowing the pooling and sharing of specialized recourses across products.
Disadvantage: difficulty of coordinating the tasks of diverse functional specialists so that their activities are completed on time and within budget. Product Departmentalization Facilitates coordination among specialists to achieve on time completion and to meet budget target, it provides clear responsibility for all activities, but with duplication of activities and costs.
The matrix structure breaks the unity of command. Employee has two bosses i.e. functional department managers and product managers. Therefore the matrix has dual chain of command.
Matrix Structure for a college of Business Administration.
New Designs OptionsTeam Structure Management uses team teams as its central coordination device, it results in horizontal organization and team structure. The primary characteristics of the team structure are that it breaks down departmental barriers and decentralizes decision making to the level of work team. Team structure also requires employees to be generalists as well as specialists.
Pizza Structure Hierarchy is abolished Functions have not supposed to have separate goals People work in self directed work teams All managers are members of at least one such level.
Network Structure Linking of numerous separate organizations to optimize their interaction to accomplish a common over all goal. There can be intranetworking, a joint venture to build complex, technical systems such as a space shuttle. Interorganizational networking, like a network of construction companies to build a larger structure. Networking requires synergy and high level of collaboration
Spaghetti organization IT system that led to the virtual elimination of paper, reconfigured office spaces, and shift in the business from focusing on technology to serving and users
Fishnet Organization Flexible Form and reform varied patterns f connection Middle manager may be at one time be at the apex, at another time in the middle. Rearranges itself quickly while retaining its inherent strength. Allows any structure to be woven together electronically and altered as needed.
The Empowered Organization Participating in decision making Involving empowering
Virtual Organization (network and modular organization) Small core organization that out sources major function business. Centralized Little or no departmentalization
Boundaryless organization Eliminate chain of control Limitless span of control replace departments with empowered teams.
Why do structures differMechanistic model Characterized by extensive departmentalization, high formalization, a limited information network and centralization. Organic model A structure that is flat, uses cross hierarchical and cross functional teams, has low formalization, possess a comprehensive information and relies on participative decision making.
Innovation Strategy A strategy that emphasizes the introduction of major new products and services.Cost minimization strategy A strategy that emphasizes tight costs control, avoidance of unnecessary innovation or marketing expenses and price cutting
Imitation Strategy A strategy that seeks to move into new products or new markets only after their viability has already been proven.
Organizational size Organization’s size affects structure. Large organizations have employees, tend to have more specializations, more departmentalizations, more vertical levels, and more rules and regulations. The impact of size becomes less important as an organization expands.
Organization 2000 employees adding 500 no impact. Organization 300 employees adding 500 major shift.
Technology The way in which an organization transfers its inputs into outputs.Environment institutions or forces outside an organization that potentially affect the organizations performance.