The document discusses different elements of organizational structure including work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization. It then describes common organizational designs like the simple structure, bureaucracy, and matrix structure. Finally, it discusses new design options like virtual organizations and boundaryless organizations as well as factors that influence organizational structure like strategy, size, technology, and environment.

1. Foundations of Organization
Structure

2. Group of People have to Present
Roll No Name
01 Ajit P. Paudel
13 Dhara P. Sardhara
17 Disha Patel
21 Jaimin Parmar
25 Jeet Trivedi

3. 1. What is Organization Structure ?
 An Organization Structure defines how job tasks or works are formally divided, grouped
and coordinated.
 An Organization can be structured in many different ways, depending on its objectives.
 Managers need to address 6 key elements when they design their organization's structure.

4. The 6 elements of Organization Structure
1. Work Specialization :
 Work should be divided into specialization of the workers.
 Employees are specialized in different areas as their skills.
 It creates efficiency and productivity and entire job is not done by one individual.

5. 2. Departmentalization :
 Once jobs have been divided through work specialization, they must be grouped so common
tasks can be coordinated. The basis by which jobs are grouped is called
“Departmentalization”.
 There are many department in every organization like – Functional Departmentalization,
Product Departmentalization, Process Departmentalization, Customer Departmentalization.

6. 3. Chain of Command :
The unbroken line of authority that extends from the top of the organization to the lowest and
clarifies who report to whom.
Authority: Refers to the rights inherent in a managerial position to tell people what to do and
to expect them to do it.
Responsibility: The obligation to perform any assigned duties.
Unity of command: The management principle that each person should report to only one
manager.

7. 4. Span of Control :
 The number of subordinates a manager can efficiency and effectively direct.
 Number of subordinates are working under one same manager.
 The wider or larger span, the more efficient the organization.
 There is also some kind of drawbacks which are – it is a complex and expensive, only
vertical communications, tight supervision and discourage employee autonomy.
5. Centralization and Decentralization :
Centralization: It refers to the degree to which decision making is concentrated at a
single point in organization.
 In centralization, top managers make all the decisions and lower level management only
carry out their directives.

8. Decentralization: It refers to the degree to which most decisions are made by mid-level
or lower-level managers, rather than being made centrally by the
head of the company.
 It is completely opposite of centralization.
6. Formalization :
 It refers to the degree to which jobs within the organization are standardized.
 The extent to which work roles are structured in an organization, and the activities of the
employees are governed by rules and procedures.

9. 2. Common Organizational Design
 We now turn to three of the more common organizational design which
are –
1. The Simple Structure:
2. The Bureaucracy:
3. The Matrix Structure:

10. 1. The Simple Structure:
It has only direct and vertical relationship between different level in firm. Simple
structures are perhaps the most common form of organization design, primarily because there are more small
organizations than large.
C.E.O
Production
Manager
Foreman
Workers
Foreman
Workers
Marketing
Manager
Sale
Officer
Sales
Person
Sale
Officer
Sales
Person

11. Advantages :
 Tends to simplify and clarify authority, responsibility and accountability relationship
 Promotes to fast decision making
 Simple to understand
Disadvantages :
 Neglects specialist in planning
 Overload key persons.
 As the firm grows larger, line organization becomes more ineffective .

12. 2. Bureaucratic Structure :
 It is an organizational from that exhibits many of the facets of the mechanistic organization.
Designed for efficiency and rely on high levels of work specialization, formalization, centralization of
authority, rigid and well-defined chains of command, and relatively narrow span of control.

13. C.E.O
Marketing
Foreman
Foreman
Foreman
Foreman
Finance
Foreman
Foreman
Foreman
Foreman
Production
Foreman
Foreman
Foreman
Foreman
H.R
Foreman
Foreman
Foreman
Foreman

14. Advantages :
 High Specialization
 Rigid Departmentalization
 Clear chain of command
 Narrow span of control
 Centralization
 High formalization

15. 3. The Matrix Structure:
 Matrix is a structure that creates dual lines of authority and combines functional and product
departmentalization.

16. Strengths :
1. Facilitates Coordination
2. Complex and independent
activity
3. Better communication
4. More Flexibility
5. Efficient allocation of
specialists
6. Economies of scale
Weakness :
1. Confusion created
2. Stress placed on workers
3. Increased ambiguity
4. Unclear reporting relationships
5. Power struggles
6. Role conflicts
7. Unclear expectations

17. 3.New design options in organizational structure

18. VIRTUAL ORGANISATIONS MEANING
 not physically existing as such but made and connected by software.
 ‘virtual organization’ also known as digital organization, network
organization or modular organization.
 A virtual organization is a “business without walls”

19. FEATURES VIRTUAL ORGANISATIONS
One is the choice of team members with the appropriate
skills and knowledge for the task
second is the effective linking of team members,
including communication channels, interactions, and
relationships

20. Advantages & Disadvantages
+ -
Increased productivity
Less paperwork
Can be quickly reshaped
Money saved
Abilities to work at home
Difficult to control
Technologies can be easily
revealed.

21. Boundary less Organization
Seek to remove vertical, horizontal, and external
barriers so that employees, managers, customers, and
suppliers can work together, share ideas , and identify the
best course for the organization.

22. Types of Boundary less organization
 Vertical Boundaries
 Horizontal Boundaries
 Geographic Boundaries

23. VERTICAL BOUNDARIES :-It divide management from
employees & divide layers of management from each other.
HORIZONTAL BOUNDARIES :- It divide divisions &
departments within a corporation from each other.
Geographic Boundaries :-the boundary less organization also
breaks down geographic barriers. Coca-Cola and McDonald’s,
do as much business overseas as in the United States . the
goal is to break down cultural barriers.

24. The Leaner Organization: Downsizing
Leaner organizational structure :-
is a structure that is designed to create more
customer value using fewer resources than a
traditional organizational structure. The goal for all
members of an organization that utilizes a lean
structure is to constantly find ways to improve the
processes of the organization and to make the
organization more efficient.

25. Diff between traditional org & lean org

26. What is Downsizing?
 A downsizing strategy reduces the scale (size)
and scope of a business to improve its financial
performance.

28. 4. Why Do Structure Differ ?

29. Models :
The Organic Model
1. Cross-functional team
2. Cross-hierarchical teams
3. Free flow of information
4. Wide span of control
5. Decentralization
6. Low Formalization
The Mechanistic Model
1. High Specialization
2. Rigid Departmentalization
3. Clear chain of command
4. Narrow span of control
5. Centralization
6. High formalization

30. Reasons :
 Organizational Strategy
 Organizational Size
 Technology
 Environment

31. 1. Organizational Strategy :
 Structure
 To achieve objectives
 Desire from organizational overall strategy
 Structure – Strategy
Types of Strategy :
 Innovation
 Cost Minimization
 Imitation

32. 1. Innovation :
A strategy that emphasizes the introduction of major new product and
services.
2. Cost Minimization :
A strategy that emphasizes high cost controls, avoidance of
unnecessary innovation or marketing expenses and price cutting.
3. Imitation :
A strategy that seeks to move into new product or new market only after
their viability has already been proven.

33. Strategy Structure Option
Innovation Organic : A loose structure; low
specialization, low formalization,
decentralized
Cost Minimization Mechanistic : Tight control; extensive work
specialization, high formalization, high
centralization
Imitation Mechanistic and organic : Mix of loose
with tight properties; tight controls over
current activities and looser controls for
new undertakings

34. 2. Organizational Size
Specialization
Departmentalization
Vertical Levels
Rules and Regulations

35. 3. Technology
 The way in which an organization transfers its in puts into outputs.
4. Environment
 Institutions or forces outside an organization that potentially affect the organization’s
performance.