Organizational Structures

1. 1
Organisational
Structures
Key features of Organisational Structures
Types of Organisational Structures

2. Key Points
Span of Control - number of employees that
each manager/supervisor is responsible for.
Wide - charge of many employees
Narrow - charge of a few employees.
2
Work Specialization
The degree to which tasks in the
organization are divided into
separate jobs.
Overspecialization can lead to
boredom, fatigue, stress, poor
quality etc
Chain of Command
Line of authority from top mgmt
to lowest levels
Clarifies who reports to who.
Unity of Command
One employee - one boss

3. Drivers of Organisational
Structure
 Strategy of the Organisation
 Innovation
 Cost driven
 Mass Market
 Size
 Degree of environmental uncertainty
 Products/Services
 Location
 Internal Competencies
 Staff expertise
 Resources
3

4. 4
Simple
Structure
Functional
Structure
Multinational
Structure
Product
Departments
Location
Customer
Internationalisation
Complex products
Alliances
Technology
Small business
Owner/Manager
Limited location
Evolution
of Structure

5. 5
Centralisation Decentralisation
Static
environments
Top managers make the
decisions and lower-level
employees simply carry
out those orders.
Decision-making
is left to the managers
who are closest
operations
Non-specialist/inexperienced
DM
Top management
want control
Dynamic/complex
environments.
Experienced low
level managers.
Democratic
structures.
Dispersed
organisation

6. 6
Formal or Informal Structure
Low formalization means fewer constraints on
how employees do their work.
Highly flexible and adaptable structure
Non-standardized jobs Fluid team-
based structure
Little direct supervision/rules
Open communication network
Empowered employees
Highly formalized jobs offer little discretion over what is to be done.
A rigid and tightly controlled structure
High specialization/formalization
Rigid departmentalization
Narrow spans of control
Limited information network (downward)
Low decision participation

7. Tall and Flat Structures
 Many levels of management (long chain of command)
 Narrow span of control – close supervision possible
 There is a clear management structure.
 The function of each layer will be clear and distinct.
 Clear progression and promotion ladder.
 Freedom and responsibility of employees is restricted.
 Decision making could be slowed down
 Communication can be slow.
 High management costs
7

8. Flat Structures
 Few layers or just one layer of management Short chain of command but large span
of control)
 Better team sprit
 Less bureaucracy and faster and easier decision making.
 Lower management costs
 Better communication between management and workers.
 Workers may have more than one manager/boss.
 Structure limited to small organisations such as partnerships, co-operatives and some
private limited companies.
 Function of each department/person could be blurred and merge into the job roles of
8

9. 9
Functional Structure
(Departmentalization)
Integration of common specialists
Strong specialized work groups
Divides work to be done into specific jobs and departments.
Assigns tasks and responsibilities associated with individual jobs.
Coordinates diverse organizational tasks.
Establishes relationships among individuals, groups, and departments.
Establishes formal lines of authority.
Allocates and deploys organizational resources.
Director/Executive/Branch
Manager
IT Dept
Marketing Dept
HR Dept
Accounts Dept
Conflicts between managers
Poor integration between depts.
Lack of strategic goals

10. 10
Geographical Structure
Advantages
More effective and efficient handling of specific regional issues that
arise
Serve needs of unique geographic markets better
Disadvantages
Duplication of functions
Can feel isolated from other organizational areas
Sales Director
Sales Director
(Scotland)
Sales Director
(Ireland)
Sales Director
(Wales)
Sales Director
(England)

11. 11
Multi Divisional Structure
(Geographical)
Chief Executive Officer
Asia
Europe
Americas
Product A Product A
Product A

12. 12
Process Structure
More efficient flow of work activities
Each function with specific role
Can only be used with certain types of products
Can lead to blame culture
Car Assembly
Distribution
Test
Production
Design

13. 13
Functional Structure
(Customer)
Customers’ needs and problems can be met by specialists
Duplication of functions
Limited view of organizational goals
Customer Relations
Phone Company
New Customers
Contract Customers
Pay as you customers

14. 14
Matrix Structure
Hatchback
Saloon
Executive
R&D Production
Sales
R&D
+
Hatchback team
R&D
+
Saloon team
Sales
+
Hatchback team
R&D
+
Executive team
Production
+
Hatchback team
R&D
+
Executive team
R&D
+
Executive team
R&D
+
Saloon team
R&D
+
Saloon team
Specialists assigned to projects led by project managers.
Project participants have two managers.
Employees work continuously on projects;
moving on to another project as each project is completed.
Fluid and flexible design
Complexity of assigning people to projects.
Task and personality conflicts.

15. Forms of Virtual Organisations 15
Agile
Virtual Organization
Small core of f/t staff
temporarily hires specialists to work
on opportunities that arise
Network Organization
Small core organization
outsources its major business functions

16. Conclusions
Structures are dependent on external and internal
environment of organisations
Modern structures attempt to be organic and flexible with
few boundaries
Most organisations have mixed approaches
16

17. 17
Any
questions