The present power point presentation explains the following concepts such as organization, organisation, organisational structure, definition, factors affecting organizational structure, departmentalisation, span of management, centralisation, decentralisation, delegation of authority, methods, function, process, product, customers, territory, centralization, decentralization, departmentalization

1. FACTORS AFFECTING
ORGANISATIONAL
STRUCTURE
Pooja Yadav,
Research Scholar
Central University of Rajasthan, Ajmer
Satyender Yadav
Research Scholar,
UCCMS, MLSU, Udaipur

2. Content
• Organisational structure concept
• Factors affecting organizational structure
a) Departmentalisation
b) Span of Management
c) Centralisation and Decentralisation
d) Delegation of Authority

4. What is Organisation??
• Organisation is refers to a social groups designed to
achieve certain goals. Organisation involves creating a
structure of relationship among people working for the
desired results”.
CONCEPT OF ORGANISATION
Organisation refers to the institution
Organising is one of the functions of management

5. The Concept of
Organisational Structure
• Organisational structure can be defined as “the logical arrangement of task
and the network of relationships and roles among the various positions
established to carry out the activities.
• Organisation structure constitutes the arteries and veins through which the
blood of work flows in the body of Organisation.

6. Definition of Organisational
Structure
According to Fred Luthans,
“ Organisation structure represents the skeleton
framework for organisations”
According to Albert Herry H.,
“Organisational structure is the framework within
which managerial and operating tasks are
performed”.

7. Factors affecting Organisational Structure
The following considerations must be kept in mind while building an
Organisational structure:
• Departmentalisation
• Span of Management
• Centralisation and Decentralisation
• Delegation of Authority

8. 1. Departmentalisation/ Departmentation
It is a process wherein jobs/teams are combined together into functional
units called departments on the basis of their area of specialisation, to
achieve the goals of the organisation and to carry out activities of
similar nature.
Objectives of Departmentalisation
To specialize activities.
To simplify the process and operations of the organisation
To maintain control

9. Methods of Departmentalisation
There are mainly five methods by which an organisation can be
departmentalised. They are:-
Function Process Product Customer Territory

10. A. Departmentalization by Function
In this method, all the activities related to a function or which are of
similar nature are combined in a single unit, to give proper directions to
the entire group in one go. The creation of department is on the basis of
specified functions, such as production, marketing, purchase, finance
etc.

11. A. Departmentalisation by Function
Example

12. B. Departmentalisation BY PROCESS
In departmentation by the process, the activities are grouped as per the
production processes. These departments require manpower and material
so as to carryout operations.
Example:

13. C. DEPARTMENTALIZATION BY PRODUCT
In departmentation by the product, the activities related to product
development and delivery are combined into a particular division. It is
appropriate for large-scale multi-product enterprises.
Example:

14. D. Departmentalization by Customer
The grouping of the organization according to the different classes of
customer or clients. It focuses on special customer needs.
Example:

15. E. DEPARTMENTALIZATION BY TERRITORY
When the division is based on the geographical area, it is called as
territorial departmentalization. This is suitable for the organizations, that
have widespread operations at different locations.
Example:
B.O.D
Northern
Region
Eastern
Region
Western
Region
Southern
Region
Managerial
Director

16. 2. Span of Management
The Span of Management refers to the number of subordinates who
can be managed efficiently by a superior. Simply, the manager
having the group of subordinates who report him directly is called
as the span of management.
The Span of Management has two implications:
a) Influences the complexities of the individual manager’s job
b) Determine the shape or configuration of the Organization

17. 3. Centralization and
De-centralization
Centralization of authority
refers to the concentration of
decision making power at the
top level of management. All
important decisions are taken
at the top level. Everything
which goes to reduce the
importance of subordinate is
called centralization.
Decentralization refers to ‘the
systematic effort to delegate to
the lowest levels all authority
except that which can only be
exercised at central points’.

18. Difference between Centralization and
De-centralization

19. 4. Delegation of Authority
The Delegation of Authority is an organizational process wherein, the
manager divides his work among the subordinates and give them the
responsibility to accomplish the respective tasks. Along with the
responsibility, he also shares the authority, i.e. the power to take
decisions with the subordinates, such that responsibilities can be
completed efficiently.

20. Features of Delegation of Authority
The delegation of authority may be oral or written, and may be specific or general.
The delegation is an art and must comply with all the fundamental rules of an
organization.
Delegation does not mean that manager give up his authority, but certainly he
shares some authority with the subordinate essential to complete the responsibility
entrusted to him.
Authority once delegated can be further expanded, or withdrawn by the superior
depending on the situation.
The manager cannot delegate the authority which he himself does not possess.
Also, he can not delegate his full authority to a subordinate.

21. DIFFERENCE B/W Delegation &
De-CENTRALISATION
Basis Delegation De-Centralisation
Nature Delegation is a compulsory act. De-centralisation is an optional policy.
Freedom of Action There is less freedom to take own
decision as there is more control by
supervisors.
There is greater freedom of action as there is less
control over executive.
Status It is a process followed to share
tasks.
It is the result of the policy decision of the top
management.
Scope It has narrow scope as it involves
superiors and his immediate
subordinate only.
It has wide scope as it involves all the levels of
management.
Purpose The main purpose is to lessen the
burden of the manager.
The main purpose in this case is to increase the
role of the subordinates in the organisation by
giving them the authority to take decisions.

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