2. DEFINITION
An informal organization is considered
as a network of personal and social
relationships (alliances, cliques,
friendships) that arise as people
associate with other people in a work
environment.
The key in defining an
organization is that it has a
definite structure for a purpose.
3. Key terms used in organizational
design and structure
Work
specialization
• the degree to which
organizational tasks are
subdivided into individual jobs.
Chain of
command
• an unbroken line of authority
showing who reports to whom.
Span of control or
• the number of employees
span of
reporting to a supervisor
management
4. Centralization
• the location of decision authority
at the top management level.
Decentralization
• location of decision authority
near the lower organizational
levels.
Departmentalization
• grouping individuals into
departments and departments
into the total organization.
5. ORGANIZATIONAL STRUCTURE
• There are five approaches to designing an
organization:
1. Functional
2. Divisional
3. Matrix
4. Teams
5. Networks
Traditional approaches
Contemporary approaches
6. FUNCTIONAL STRUCTURE
• Grouping of positions into departments based
on similar skills, expertise and resources.
President
(Managing Director)
Marketing
Finance
HRM
Manufacturing
7. DIVISIONAL STRUCTURE
• Divisional structures are grouped on the basis
of common products or services, geographic
markets, or customers served.
CEO
Caribbean
R&D
HRM
finance
Central
America
Marketing
North
America
8. MATRIX STRUCTURE
• An organizational structure that arranges
work groups on two dimension simultaneously.
9. TEAM STRUCTURE
• The team approach gives managers a way to
delegate authority and a means to be more flexible
and responsive to the competitive environment.
Cross-functional
teams
• employees from many functional
departments are permanently
assigned to solve ongoing
problems.
Permanent team
structure
• employees working together on a
project
