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2. Topic: Organizational Structure
Presented by: Sana Majeed , Sundas Zaheen ,
Raja Amir, Ahmer Waqar &
Sabeel Younas
Program: B-Com (2nd Semister, 2016)

3. ORGANIZATIONAL STRUCTURE DEFINED
Division of labor and patterns of coordination,
communication, workflow, and formal power that direct
organizational activities.
Refers to formalized patterns of interactions that link a
firm’s tasks, technologies, and people

4. WHY DO WE NEED ORGANIZATIONAL STRUCTURE
 Without a formal organizational structure, employees
may find it difficult to know who they officially report to in
different situations, and it may become unclear exactly
who has the final responsibility for what.

5. BUILDING BLOCK DIAGRAM OF ORGANIZATIONAL STRUCTURE

6. BASIC AND DIFFERENT TYPE OF ORGANIZATION
STRUCTURE
 1) Functional Structure
 An organizational form in which the major
functions of the firm, such as production,
marketing, R&D, and accounting, are grouped
internally.

7. FUNCTIONAL STRUCTURE
 Advantages
 Enhanced coordination and control
 Centralized decision making
 Enhanced organizational-level perspective
 More efficient use of managerial and technical talent
 Facilitated career paths and development in specialized areas
 Disadvantages
 Impeded communication and coordination due to differences in
values and orientations
 May lead to short-term thinking (functions vs. organization as a
whole)
 Difficult to establish uniform performance standards

8. 2) DIVISIONAL ORGANIZATIONAL STRUCTURE
 An organizational form in which products, projects, or
product markets are grouped internally.
 Also called multidivisional structure or M-Form

9.  Advantages
 Separation of strategic and operating control
 Quick response to important changes in external environment
 Minimal problems of sharing resources across functional
departments
 Development of general management talent is enhanced
 Disadvantages
 Can be very expensive
 Can be dysfunctional competition among divisions
 Differences in image and quality may occur across divisions
 Can focus on short-term performance

10.  3) Matrix organizational structure
 An organizational form in which there are multiple lines
of authority and some individuals report to at least two
managers.

11.  Advantages
 Facilitates the use of specialized personnel,
equipment and facilities
 Provides professionals with a broader range of
responsibility and experience
 Disadvantages
 Can cause uncertainty and lead to intense power
struggles
 Working relationships become more complicated
 Decisions may take longer

12. BASIC FORM OF ORGANIZATION STRUCTURE WITH RESPECT
TO COORDINATING WORK ACTIVITIES
 An organizational structure is used by businesses to provide
an overall hierarchy and reporting structure for each job
within the organization, and defines how an organization will
operate to meet its goals. For small businesses, one of
several basic types of organizational structure can provide a
platform to allow for future growth without making extensive
changes to job responsibilities, the management structure
or financial budgets for each area

13. COORDINATING WORK ACTIVITIES
1. Informal communication
 Sharing information, forming common mental models
 Allows flexibility
 Vital in no routine and ambiguous situations
 Easiest in small firms
 Applied in team-based structures
 Includes integrator roles

14. 2. Formal hierarchy
• Direct supervision
• Assigns formal (legitimate) power to manage others
• Coordination strategy for departmentalization

15. 3. Standardization
a) Standardized processes (e.g., job descriptions)
b) Standardized outputs (e.g., sales targets)
c) Standardized skills (e.g., training)

16. ELEMENTS OF ORGANIZATIONAL STRUCTURE
 >
Elements of
Organizational
Structure
Span of
Control
Centralization
Department-
alization
Formalization

17. X
SPAN OF CONTROL
Number of people directly
reporting to the next level
 Assumes coordination through
direct supervision
Wider span of control possible
when:
 Other coordinating
mechanisms present
 Routine tasks
 Low employee
interdependence

18.  It is really important to have an organizational
structure that will allow those companies to have
the ultimate confidence
Susan Estrada