Organizational structure is the framework that specifies relationships between people, work, and resources within an organization. The span of management, or number of subordinates one manager can oversee, largely determines the structure and levels of hierarchy. Tall structures have many levels and a narrow span of control, while flat structures have few levels and a wide span of control. Decision making is faster in flat structures due to their wide span of control, while tall structures provide more opportunities for promotion but involve higher costs and slower decision making across many levels. Delegation of authority and decentralization of decision making can help make structures more effective and motivate employees. Common organization designs include functional, divisional, and matrix structures.

1. ORGANIZATION STRUCTURE

2. What Is Organizational Structure
Organisation structure is the outcome of the organising
process.
The organisation structure can be defined as the framework
within which managerial and operating tasks are performed.
It specifies the relationships between people, work and
resources.
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The span of management, to a large extent gives shape to
the organisational structure. Span of management refers to
the number of subordinates that can be effectively
managed by a superior. This determines the levels of
management in the structure.

3. Narrow Span of Control
Wider Span of Control
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Span of management/Control

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Tall vs Flat Structure
Tall structure is an organizational
structure with many levels of
hierarchy.
Flat structure is an organizational
structure with a limited number of
levels of hierarchy.
Span of Control
A narrow span of control is seen in
a tall structure.
In a flat structure, the span of
control is wide.
Structure
More time is taken to make
decisions in a tall structure since
there are many levels of personnel
to consider.
Speed of decision making high in
flat structures due to the wide span
of control.
Costs
Cost of managing a tall structure is
costly since there are more layers
of staff
Costs related to a flat structure is
relatively low compared to a tall
structure.
Opportunity
Opportunity for promotion is high in
a tall structure.
Limited opportunities are available
for promotion in a flat structure.
What is the difference between Tall and Flat Structure?

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Delegation
Theo Haimman, Delegation of authority merely means
the granting of authority to subordinates to operate within
prescribed limits.
Elements of Delegation
1.Authority
2.Responsibility
3.Accountability
Importance of delegation is that it helps in effective
management, employee development, motivation,
growth and coordination

7. Decentralisation
decentralisation refers to delegation of authority throughout
all the levels of the organisation. Decision making
authority is shared with lower levels and is consequently
placed nearest to the points of action
Centralization
The degree to which decision making is concentrated at a
single point in the organization.
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8. 1–8
Copyright © 2006 Thomson Business and Economics. All rights reserved.

9. 1–9
Copyright © 2006 Thomson Business and Economics. All rights reserved.

10. Common Organization Designs
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1. Functional organisational structure
2. Divisional structure
3. Matrix structure

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Divisional structure

12. 12
Matrix structure