This document discusses the key elements of organizational structure, including work specialization, departmentalization, centralization/decentralization, formalization, span of control, and chain of command. It describes common types of each element and how they affect the structure. For example, it explains how narrow spans of control encourage close supervision while wider spans allow more autonomy. The document also discusses factors that determine organizational structure, such as strategy, size, technology, and environmental conditions. Finally, it provides an overview of how structure design influences organizational performance and employee satisfaction.

1. Foundations of
Organization
Structure

2. Group Members
Umer Farooq-010
Mati-ur-Rehman-015
Muhammad Usman-003
Mian Sahib-088
BS(IT) 5th Semester

3. Organization Structure
• How jobs are formally divided , grouped , and
coordinated.
• There are six key elements for the design of
organization structure.
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Work Specialization
Departmentalization
Centralization and Decentralization
Formalization
Span of Control
Chain of Command

4. Elements of Organizational
Structure
Work
Specializ
ation
Departme
ntalizati
on
Formaliz
ation
Organizational
Structure Elements
Centraliz
ation &
Decentra
lization
Chain of
Command
Span of
Control

5. Work Specialization
• Assign wok according to Work
specialization
• Division of labor
• Activities subdivided into separate jobs
• Consume less time to understand tools and
equipments
• Increase efficiency of work

6. Departmentalization
• The basis by which jobs are grouped.
• Clustering individuals into units and units
into departments and departments into
larger units.
• Encourages informal Communication among
people and subunits.

7. Types of Departmentalization
Functions
Product &
Services
Process
Geography
Customer

8. Types of Departmentalization
Functional
Product/service
Process
• Grouped units by performed functions.
• Efficiency gained by putting specialist
together.
• Departmentalize as Manufacturing,
Accounting, Supply.
• Grouped by type of product or service
• Increase accountability for performance
• Works for Processing customers as well as
product
Customers
• Departmentalization uses the particular type
of customer of the organization.
Geography
• Grouped on the basis of territory
• Valuable if organization’s customer are
scattered over a large geographic area

9. Chain of Command
• Unbroken line of authority , extends from top
of the organization to the lowest
• Clarifies who report to whom
• Responsibility, legal duty to perform a task
which is assigned
• Authority, right inherent in a managerial
position to give order and expects them to be
obeyed
• Unity of command, A person should have one
and only one superior to whom he is directly
responsible
• Organization more productive by enforcing
chain of command

10. Span of Control
• The number of subordinates a manager can
efficiently and effectively direct
• It determine the number of level and
manager an organization has
• Types of Span
Narrow
Span
Wider
Span

11. Types of Span
Wider
Span
Narrow
Span
• Most efficient in terms of cost
• Reduce efficiency effectiveness and employee
performance
• Less time to provide leadership and support
•
•
•
•
Manager can maintain close control
Expensive
Make vertical communication more complex
Slowdown decision making And isolate upper
management
• Encourage supervision and discourage
employee autonomy

12. Centralization and
Decentralization
Centralization
• Decision making
concentrated at single
point
• Top manager make all
decisions
• Decision making rate
slow
• No other one
participate in decision
making
Decentralization
• Decision making pushed
down to managers
closest to the action
• Solve problems
quickly and effectively
• Allow others to
participate in decision
making
• Democrative

13. Formalization
• The degree to which jobs within an
organization are standardized
• Describe what, when and how to do work
• Describe lots of organizational rules and
clearly defined procedures covering work
process
• Reduce ambiguity
• Increase consistency and uniform output

14. Organization Model
Mechanistic Model
• High Specialization
• Rigid
Departmentalization
• Clear Chain of
Command
• Narrow Spans of
Control
• Centralization
• High Formalization
Organic Model
• Cross-functional Team
• Cross-hierarchical
Team
• Free Flow of
Information
• Wide Spans of Control
• Decentralization
• Low Formalization

15. Common Organizational Design
Simple
Structure
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•
•
•
Low degree of departmentalization
Wide span of control
Centralized Structure
Little formalization
The
Bureaucracy
•
•
•
•
•
Work specialization structure
Very formalized rules and regulations
Task grouped in functional departments
Narrow span of control
Centralized authority
Matrix
Structure
• Create dual lines of authority
• Combine functional and product
departmentalization

16. New Design Options
Virtual
Organization
Boundaryless
Organization
• A small , core organization that
outsources major business functions
• Highly centralized
• Little or no departmentalization
• Eliminate the chain of command
• Limitless span of control
• Replace departmentalization with
empowered team

17. Causes of Different Structure
Strategy
Environme
nt
Causes
Technolog
y
Organizatio
n Size

18. Organization Size
• Organization size’s significantly affects its
structure
• Larger organization have more specialization
, more formalization rather than smaller
organization
Technology
• The way in which an organization transfer its input
into output
• Technology also affects organization Structure

19. Strategy
Innovation
Costminimization
Imitation
• Emphasizes the introduction of major new products
and services
• Tight cost control
• Avoidance of unnecessary innovation or marketing
expenses
• Price cutting
• Introduce new product only if their viability
already proved
• Risk aversion strategy

20. Environment
Capacity
Volatility
Complexity
• The degree to which an environment support
growth
• Rich and growing environments generate excess
resources
• Describe instability in the environment
• Difficult to manage
• The degree of heterogeneity and concentration
among environmental elements

21. Organization Structure: Its
determinants and Outcomes
Causes
•Strategy
•Size
•Technology
•Environment
Design
Determines
Associated with
•Mechanistic
•Organic
Performanc
e and
Satisfaction
Moderated by
individual
differences and
cultural norms