BUSINESS THEORIES

1. ORGANIZATION THEORIES
FOR EFFECTIVE BUSINESS
MANAGEMENT

2. THERE ARE DIFFERENT TYPES OF ORGANIZATIONAL
SET-UP OR STRUCTURE
• Formal Organization usually represented with organized
charts and with position descriptions. There is a clear
reporting relationship that the manager is aware of.
• informal organization is a set of evolving relationships and
patterns of human interaction within an organization that
actually do exist but are not officially prescribed

3. ORGANIZATIONAL DESIGN
• is the process of aligning an organization’s structure
based on its vision and mission. It is a careful study
at the complex relationship between tasks,
workflows, responsibilities and authorities, and
making sure these all support the objectives of the
organizational strategy and mandate

4. THERE ARE TWO MAIN CLASSIFICATIONS OF THEORIES
REGARDING ORGANIZATIONAL DESIGN ACCORDING TO
ROBBINS AND COULTER (2009): TRADITIONAL AND MODERN.
• Traditional pertains to the usual or old-fashioned
ways, while modern refers to contemporary or new
design theories.

5. TRADITIONAL ORGANIZATIONAL DESIGN THEORIES
INCLUDE:
• Simple
This organizational design has few departments, wide spans of control, or a big
number of subordinates directly reporting to a manager
Functional This organizational design groups together similar or related
specialties. Generally, functional departmentalization is utilized and put into
practice in an entire organization

6. • Divisional
This organizational design is made up of separate business
divisions or units, where the parent corporation acts as
overseer to coordinate and control the different divisions
and provide financial and legal support services

7. MODERN ORGANIZATIONAL DESIGN THEORIES
INCLUDE:
Team Design
In team design, the entire organization is made up of work
groups or teams.
• Matrix – Project Design
Matrix design refers to an organization design where
specialists from different departments work on projects that
are supervised by a project manager.

8. • Boundary – less Design
This is another modern organizational design where
the design is not defined or limited by vertical,
horizontal and external boundaries. There are no
hierarchical levels that separate employees, no
departmentalization, and no boundaries that
separate the organization from customers, suppliers
and other stakeholders