This document discusses elements of organizational structure. It defines organizational structure as referring to the division of labor, patterns of coordination, communication, workflow, and formal power that direct organizational activities. The four basic elements of organizational structure are span of control, centralization, formalization, and departmentalization. Organizational structure is shaped by factors like the environment, technology, size of the organization, and its strategy. The structure facilitates management action, encourages efficiency, communication, optimal use of resources, and job satisfaction.

1. Elements of Organizational
Structure

2. Organizations are groups of
people who work
interdependently toward some
purpose.

3.  Org.l structure refers to the division of labour, the
patterns of coordination, communication, workflow,
and formal power that direct org.l activities.
 An org.l structure reflects its culture and power
relationships.
 Thus an org. is defined as,
“the planned coordination of the activities of s number
of people for the achievement of some common,
explicit purpose or goal, through division of labour and
function, and through a hierarchy of authority and
responsibility.”

4. Elements of Organizational Structure
• Every org. is configured in terms of four basic
elements of org.l structure.
1. Span of Control
2. Centralization
3. Formalization
4. Departmentalization

5. Span of Control
= the number of people directly reporting to the next level in the org.l
hierarchy.
i.e.,
the number of subordinates a manager can efficiently and effectively direct.
 This element of organizational structure also outlines the number of
mangers an organization needs, which is typically determined based on
the number of employees and departments a company has.
The size of an org’s hierarchy depends on both the average span of control
and the number of people employed by the org.
 A tall structure has many hierarchical levels, each with a relatively narrow
span of control,
 whereas a flat structure has few levels, each with a wide span of control.
 Larger org.s that depend on hierarchy for coordination necessarily develop
taller structures.

6. Centralization
= the degree to which formal decision authority is held by
a small group of people, typically those at the top of
the org.l hierarchy.
Most org.s begin with centralized structures, as the
founder makes most of the decisions and tries to
direct the business toward his or her vision.
But as org. grow, they diversify and their environments
become more complex.
Consequently, larger org.s tend to decentralize, i.e. they
disperse decision authority and power through the org.
The optimal level of centralization or decentralization
depends on several contingencies.

7. Formalization
It is the degree to which org.s standardize behaviour
through rules, procedures, formal training, and related
mechanisms.
Companies tend to become formalized as they get older
and larger.
External influences such as govt safety legislation and
strict a/cing rules, also encourage formalization.
Formalization may increase efficiency and compliance,
but it can also create problems.
Becz. Rules and procedures reduce org.l flexibility, so
emp.es follow prescribed behaviours even when the
situation calls for a customized response.

8. Departmentalization
It specifies how emp.es abd their activities are
grouped together.
It is a fundamental strategy for coordinating org.l
activities becz it influences org.l behaviour…
1. it establishes the chain of command
2. focuses pple around common mental models
or ways of thinking, such as serving clients,
developing products, or suporting a particular
skill set, etc.
3. encourages coordination through informal
communication among pple and subunits.

9. Organization structure
Once a group of pple has established an org to
accomplish shared goals, org.l structure evolves
to increase the effectiveness of the org.’s control
of the activities necessary to achieve its goals.
Org. structure is the formal system of task and
authority relationships that control how pple
coordinate their actions and use resources to
achieve org.’s goals.
The principal purpose of org. structure is one of
control: to control the means used to motivate
people to achieve these goals.

10. To any org, an appropriate structure facilitates
effective responses to problems of
coordination and motivation – problmes that
can arise for any number of environmental,
technological, or HR.
As org.s grow and differentiate, the structure
likewise evolves.
Org. structure can be managed and changed
through the process of org design.

11.  Org. design is the process by which managers select
and mange elements of structure so that an org can
control the activities necessary to achieve its goals.
 Org. structure is the means the org uses to achieve its
goals.
 Org. design is about how and why various means are
chosen. T is a task that requires managers to strike a
balance b/w external pressures from the org’s
environment and internal pressures from it choices. Ex:
technology.
 Achieving the proper balance helps a firm ensure that
the org will survive in the long run.

12. Role of organization Strucuture
1. Facilitating Management Action
2. Encourages efficiency
3. Communication
4. Optimum use of org.l Resources
5. Stimulating Creativity
6. Job satisfaction

13. Determinants of org.l Structure
Each org structure must suit the situation and be
optimally useful in meeting the org.l
objectives.
Good org. design is the function of number of
factors including the environment, technology
and size of the company.
These three factors determine the philosohy and
strategy of central mgmt that forms the
foundation of the org.l structure.

14. 1. Environment:
org.s are open systems that continuously
interact with outside environment.
the macro-environment of business today
has considerable impact on the internal
oprations of the org, especially if the org is a
large one.
these external factors include the customers,
cultural and economic conditions as well as
international environment.

15. 2. Technology
Has a major influence on org.l structure that would
depend upon whether the technology is simple
and routine requiring few repetitive tasks, in
which case a mechanistic structure would be
desirable.
However, when the technology is advanced and
intensive and complex requiring high
interdependence among members of the
workforce, then the organic structure would be
operationally more effective.

16. 3. Size
The size of the org, as measured by the number of
pple working in the org would determine as to
which type of structure would be more effective
for it.
As the org grows in size, it increases the number of
functional depts, the number of managerial
levels, extent of specialization, number of
empl.es with diversified responsibilities resulting
in increase in the degree of coordination required
among members of the org and this further
results in increase in related problems

17. 4. Strategy of the Organization
Strategy is typically defined as “ the
determination of the basic long-term goals
and objectives of an enterprise, and the
adoption of courses of action and the
allocation of resources necessary for carrying
out these goals.
Two basic strategies:
1. Stability strategy
2. Growth Strategy: it involves expansion. Hence
elements of complexity and uncertainty exist.