The document discusses various aspects of organizational structure. It begins by defining organization and organizational structure. It then covers key elements of organizational structure including work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization. The document also discusses authority relationships, responsibility, accountability, and delegation of authority. Finally, it briefly covers organic and mechanistic organizational structures and contingency factors that influence organizational design choices.

1. ORGANISATION DESIGN
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Submitted By:
• Arjun Kamal (Roll.no. 15)
• Ishwarpal Singh Bal(Roll.no. 47)
• Yuvraj Singh Bhatti(Roll.no. 147)
Submitted To:
Dr. Hansdeep Kaur

2. What Is A Organisation
Organisation is the backbone of management because
without an efficient organisation no management can
perform its functions smoothly.In the management
process this organization stands as a second state which
tries to combine various activities in a business to
accomplish pre-determined goals.It is the structural
framework of duties and responsibilities required of
personnel in performing various functions with a view to
achieve business goals.
In other words, organization is simply people working
together for a common goal. It is a group of people
assembling or congregating at one place and contributes
their efforts to achieve a common goal.Hence, it is
coordinates different activities for running the business
enterprise efficiently so that the common goal can be
achieved.
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3. What is Organizational Structure?
A worker reports to a manager. A manager reports to a director, a director reports to a vice president, and a
vice president reports to a C-level senior leader, like a chief executive officer or a chief administrative officer.
If you’ve ever worked in a corporate setting, you’re likely to recognize this as the basic set of layers of an
organisation’s structure.
Organizational structure defines how job tasks are formally divided, grouped, and coordinated. The structure
of an organization usually features six different elements:
• Work specialization
• Departmentalization
• Chain of command
• Span of control
• Centralization and decentralization
• Formalization
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4. Work specialization
The process of job specialization is to split up the process of work into individual tasks that is necessary for
the organization or business and that cannot be handled by one person.
If you put one worker on the task of building an automobile, he might still be building it a month or two later.
But if you have one worker that’s focused on installing right front tires, and another who is focused on left
front fenders, then those tasks become standardized. Employees learn to do them quickly with practice.
Work specialization was ideal from a task point of view—easy tasks could be done by unskilled labor, and
those tasks that required more skill could be separated out and addressed by employees that possessed those
skills. Those skilled employees weren’t wasting their time on tasks they didn’t have to be doing.
Work specialization was also ideal from a productivity point of view. Installation of brake pads requires
different tools than the installation of a tire, and when workers were assigned to one of those tasks instead of
both, tools didn’t need to be taken out and put away. Employees could cheaply be trained to do one specific
task, and many employees, each trained to do their specific task, could assemble highly complex machinery
quicker and easier than one highly trained employee that possessed all the skills to complete the assembly.

5. ADVANTAGES:-
• Upward growth:
Having a specific skill or being specialized in that work would
also bring growth in that division.
• Good package:
A job specialization means a person is knowing how to do that
work and complete it. Companies are ready to pay if they find
that person is really expert in that work as there is no one to
replace them.
• Defines quality and excellence:
When a company declares employing specialists for their tasks it
means that they take care of the type and quality of work being
executed.
• Increases productivity:
It is generally found that allowing work to be done by people who
are expert in that field would have fewer errors. As correcting
errors not only takes time and resource, it also reduces
productivity. Thereby training is provided to make employee
specialized in that work.
DISADVANTAGES:-
• Gets boring:
As you are aware that specialised work allows a person to
concentrate on one aspect of work and day after day they perform
the same work. With time, this work does not pose any challenging
assignments and becomes boring.
• Cannot multitask:
Sometimes, being specialised in one work does not allow one to
perform multitasking jobs. As they would have been concentrating
and functioning in only one aspect of the work, they would find
it difficult to multitask.
• Company suffers:
If the company is performing well due to the expert working in
that category, his/her absence would definitely create a vacuum.
This absence is sure to affect the performance and the company
suffers in due course of time.
• Cannot take breaks:
When the specialized workforce members do require to take
breaks for a special reason, they often cannot take as there is no
one else to replace them.

6. Departmentalization
Once jobs are divided up through work specialization, those jobs need to be combined together to coordinate common tasks.
Departmentalization is the basis by which jobs are grouped together. Jobs can be grouped in the following ways.
• Function. This is among the most popular way to group activities. Corporations might have a supply chain function, a
finance function, a human resources function. All the worker specializations for those areas are grouped together, and people
with common skills work in common units.
• Product. A large manufacturing company might group its common tasks together by product. A paper products
manufacturer might have a department for office paper, and other department for bathroom tissues, and yet another for
cartons. The major advantage of organizing common tasks this way is to increase employee accountability for the success of
those products.
• Geography. If an organisation’s customers are scattered over a geographic region, an organization might choose to group
common tasks geographically. A company that has a South, Midwest, and Eastern sales function is organizing around
territory, or geography.
• Process. A manufacturing plant might choose to organise common tasks around process. A tubing plant might organise
departments around casting, pressing, finishing, packaging, etc. Each department specialises in one particular part of the
manufacturing process. The same kind of departmentalization is true of the Department of Motor Vehicles, where you proceed
from one area to another to renew your license plates or your driver’s license.
• Customer. A business might choose to combine tasks around the type of customer it serves. For instance, a service like
Dropbox.com has free file sharing and cloud storage for its individual users, but there is also a department of Dropbox that
services business clients.
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7. Chain of Command
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The chain of command is the unbroken line of authority that
extends from the top of the organization (e.g., the CEO or the
President) to the lowest echelon and clari

8. Span of control or span of management is a dimension of organizational
design measured by the number of subordinates that report directly to a
given manager. This concept affects organization design in a variety of
ways, including speed of communication flow, employee motivation,
reporting relationships, and administrative overhead. Span of
management has been part of the historical discussion regarding the most
appropriate design and structure of organizations.
A small, or narrow, span of control results in each manager supervising a
small number of employees, while a wide span of management occurs
when more subordinates report directly to a given manager. A small span
of management would make it necessary to have more managers and
more layers of management to oversee the same number of operative
employees than would be necessary for an organization using a wider
span of management. The narrower span of management would result in
more layers of management and slower communications between lower
level employees and top level managers of the firm.
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9. CENTRALIZATION AND DECENTRALIZATION
It tells about the organization structure that who is
the decision maker in the organization. Who has the
power and the authority to make a decision for the
firm. In the centralization decision making is
concentrated by the single person and the decision
making is done higher hierarchy and without
interaction from the lower level.
In the decentralization decision making is
distributed in the hierarchy throughout the
organization. It is beneficial and decisions are taken
more quickly and more confidently. Every employee
is the decision maker and he will feel himself an
important part of an organization.
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10. Formalization
Similar to specialization, formalization deals with the how
jobs are structured within an organization. The key
differentiator here is that formalization also takes into account
the degree to which an employee’s tasks and activities are
governed by rules, procedures, and other mechanisms.
A formal organizational structure seeks to separate the
individual from the role or position, as the role or position
stays the same regardless of who’s holding it. An informal
organization, on the other hand, places more value on the
individual. It allows for the evolution of a role or position
based on an individual’s preferences, skill set, etc., and places
less importance on what team or department that individual is
part of.
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11. Authority Relationship
• Authority, according to Fayol, is the principle that managers have the
right to give orders with the expectance of obedience.
• Authority is something that is granted to people. Authority can be
demanded, taken or usurped, but in order for it to really work for the
betterment, it is usually granted.
The Organisation structure of a business enterprise consistes of three types
of authority relationships:-
• Line Authority
• Staff Authority
• Functional Authority

12. Line Authority
Line refers to those positions & elements of
the organisation which have the
responsibility & authority & are
accountable for accomplishment of primary
objectives.
• Line authority gives a supervisor a line of
authority over a subordinate.
• Example:
1. Production Manager
2. Marketing Manager
Staff Authority
Staff refer to those elements which have
responsibility & authority for providing
advice & service to line in attainment of
objectives.
• The nature of relationship is advisory
• Staff elements facilitate the decision
process by bringing in expert &
specialised knowledge.
• Example:
1. Industrial engineer
2. Market research manager

13. Functional Authority
Functional authority is the right that is delegated to an individual or a department to control specified processes, practices,
policies, or other matters about activities undertaken by persons in other departments.
If the principle of unity of command were followed without exception, authority over these activities would be exercised
only by their line superiors.
But numerous reasons — including a lack of special knowledge, a lack of ability to supervise processes, and the danger of
diverse interpretations of policies—explain why these managers are occasionally not allowed to exercise this authority. In
such cases, line managers are deprived of some authority. It is delegated by their common superior to a staff specialist or a
manager in another department.
For example, a company controller is ordinarily given functional authority to prescribe the system of accounting
throughout the company, but this specialised authority is a delegation from the chief executive.
Functional authority is not restricted to managers of a particular type of department.
It may be exercised by line, service, or staff department heads, but more often by the latter two because service and staff
departments are usually composed of specialists whose knowledge becomes the basis for functional controls.

14. Responsibility Accountability
• Responsibility is essentially the duty to respond to and
complete tasks.
• It can be shared among a team – multiple people can
be responsible for achieving a specific outcome by working
on the same task, or have different tasks they are responsible
for that lead to the same goal.
• Responsibility cannot technically be assigned to someone. A
person must choose to take responsibility for something
themselves.
• It is specifically task-focused – it can include: who has what
role, what that entails, and what must be done in order to be
successful.
• Accountability is literally the ability and/or duty to report (or
give account of) on events, tasks, and experiences.
• Accountability for a specific task, process, service, etc. should be
assigned to just one person
• If more than one person is accountable for the result of a task,
there is a much higher risk that each person will think the others
are taking charge, leading to no one taking accountability.
• Tasks should be assigned based on an individual’s skills.
• Whereas responsibility is an ongoing duty to complete the task at
hand, accountability is what happens after a situation occurs.
• It is how a person responds and takes ownership of the results of
a task.
• Being accountable often means that the person is liable to face
consequences from some authority if the task isn’t completed
successfully
• However, not always – sometimes the accountability can also be
at play when the “accountable” person communicates the
objective isn’t being reached.

15. Delegation of Authority
The delegation of authority is the process by which a manager divides and assigns work to his subordinates. The manager himself only
performs the tasks that require his special talents and expertise.
The rest of the work and its responsibility he will divide and delegate to his subordinates. Along with the responsibilities the manager will
also share the authority, i.e. the power that enables the subordinates to carry out the tasks.
In the delegation of authority, the sharing of authority is downwards in the management structure. The manager cannot accomplish all
tasks by himself, so he assigns the responsibilities to his subordinates.
This will reduce the work burden of the manager. The manager will not give up all his authority, he will only delegate that much authority
that the subordinate can fulfils his responsibilities and accomplish his tasks efficiently.
Elements of Delegation of Authority:-
•Responsibility
A manager will assign some specific work or task to his subordinate. Thus he is assigning his team-member or subordinate with some responsibilities.
•Authority
Now if the subordinate has to fulfill his responsibility he will need the tools to do so. One of these tools is the authority that comes with responsibility.
This is the power to take certain decisions in order to accomplish tasks. So when the manager will delegate the work, he also delegates the authority.
•Accountability
Once the manager delegates the work and the authority, he needs to check on the work of his subordinates. He is accountable for the work done by his
subordinates.

16. Organic Organization Structure:
The organic organization structure is said to be flat, meaning that there isn't a typical pyramid of leadership flowing from the lower level
workers up to senior management. Often, there are often a lot of employees that work in horizontal clusters, rather than invertical
clusters. From an organizational chart perspective, the goal is to create a more homogeneous culture of employees via decentralised
management roles.
Within the organic organization structure, employees are encouraged to work together and to have teams working on tasks together or
coordinating the flow of information and duties. Teams develop with communication working across teams in a horizontal fashion,
rather than directing information up and down a traditional hierarchy. Many organizations adopting an organic structure implement
open floor plan workspace, where verbal communication is valued more than constant written communication. A team member's role
can adjust, as the needs of the organization and as immediate tasks change over time.
Mechanistic Organization Structure
The mechanistic structure is much more traditional and is often the immediate way a new business establishes its organizational chart.
The structure is more clearly defined as a hierarchy with leadership delegating specific roles and tasks to those below. Teams are led by
managers rather than building a team within cohesive groups. The mechanistic structure tends to be more stable, and also rigid, when it
comes to delegated leadership roles.
With a centralised leadership approach, the mechanistic structure strives to have specific job descriptions for everyone. People work on
individual tasks, with managers and leaders orchestrating the moving pieces. Written communication is used to track and advise on all
aspects of work; this is a heavy-reporting organizational model. The mechanistic structure requires leaders to build loyalty among workers
who report directly to them. Workers must have explicit trust that the directions they are given will move the company closer to its goals.

17. Contingency Factors
• Strategy:
Logically structure follows strategy because organisational structures are built to achieve objectives by implementing the strategies. When strategy changes, structures must change. At the
corporate level, strategies are formulated based on the company’s mission and strategic goals or objectives.
• Environment:
Environment has an impact on decision making – specifically the difficulty of making decisions in an uncertain or unpredictable environment. Similarly, the stability and predictability of
the environment have a direct bearing on the ability of the organisation to function effectively. An unstable environment that changes rapidly and is less predictable has two requirements:
i. The organisation must be able to adapt to change, for which it needs to be flexible and responsive.
ii. The organisation needs greater coordination among departments.
• Size of the organisation:
The number of employers working in an organisation indicates its size. It is observed that large organisations differ structurally from small ones in terms of division of labour, rules and
regulations, performance appraisal and budgeting procedures.
• Age of the organisation:
With age; an organisation incorporates standardised systems, procedures and regulations. Like people, organisations evolve through stage of life cycle – birth, youth, midlife and maturity.
In the birth stage, the organisation created by the entrepreneur is informal, with no rules and regulations. Decision making is centralised with the owner and tasks are not specialised.
In the youth stage, the organisation is growing – it expands and hires more employees. It incorporates division of labour and formal rules and policies. Decision making is still with the
owner although it is shared by few persons close to the owner.
In the midlife stage, the company has become quite large. It now has extensive sets of rules, regulations, policies and systems to guide the employees. Control systems are used,
professionals are hired, tasks are decentralised and authority is delegated to functional departments. In the maturity stage, rules, regulations, specialised staffs, budgets, a refined division
of labour and control systems are in place.
• Technology:
Some kind of technology is used to convert the resources into outputs in every organisation. Technology includes the knowledge, machinery, work procedures, and materials that convert
the inputs into outputs. The technology used to manufacture the products decides the kind of the organisation for the production system.

18. Traditional Designs
• Simple Structure
A simple structure is defined as a design with low departmentalization, wide spans of control,
centralised authority, and little formalization. This type of design is very common in small start up
businesses. For example in a business with few employees the owner tends to be the manager and
controls all of the functions of the business. Often employees work in all parts of the business and
don’t just focus on one job creating little if any departmentalization. In this type of design there are
usually no standardized policies and procedures. When the company begins to expand then the
structure tends to become more complex and grows out of the simple structure.
• Functional Structure
A functional structure is defined as a design that groups similar or related occupational specialties
together. It is the functional approach to departmentalization applied to the entire organization.
• Divisional Structure
A divisional structure is made up of separate, semi-autonomous units or divisions. Within one corporation there
may be many different divisions and each division has its own goals to accomplish. A manager oversees their
division and is completely responsible for the success or failure of the division. This gets managers to focus
more on results knowing that they will be held accountable for them.

19. Contemporary Designs
• Team Structure
A team structure is a design in which an organization is made up of teams, and each team works towards a common goal. Since the
organization is made up of groups to perform the functions of the company, teams must perform well because they are held accountable
for their performance. In a team structured organization there is no hierarchy or chain of command. Therefore, teams can work the way
they want to, and figure out the most effective and efficient way to perform their tasks. Teams are given the power to be as innovative as
they want. Some teams may have a group leader who is in charge of the group.
• Matrix Structure
A matrix structure is one that assigns specialists from different functional departments to work on one or more projects. In an
organization there may be different projects going on at once. Each specific project is assigned a project manager and he has the duty of
allocating all the resources needed to accomplish the project. In a matrix structure those resources include the different functions of the
company such as operations, accounting, sales, marketing, engineering, and human resources. Basically the project manager has to gather
specialists from each function in order to work on a project, and complete it successfully. In this structure there are two managers, the
project manager and the department or functional manager.
• Learning Organization
A learning organization is defined as an organization that has developed the capacity to continuously learn, adapt, and change. In order to
have a learning organization a company must have very knowledgeable employees who are able to share their knowledge with others and
be able to apply it in a work environment. The learning organization must also have a strong organizational culture where all employees
have a common goal and are willing to work together through sharing knowledge and information. A learning organization must have a
team design and great leadership. Learning organizations that are innovative and knowledgeable create leverage over competitors.

20. Thank You!!