ORGANIZATIONAL STRUCTURE

 ORGANIZING:   

Creating and defining the structure/network of functions, departments, roles, responsibilities and relationships in   an organization .  It includes following. 

Creating and defining the structure/network of functions, departments, roles, responsibilities and relationships in   an organization .  It includes following. 

Create the departments  and divisions in an organization 
Define the functions or areas of every department 
Decide the jobs or positions of every function Assign tasks and responsibilities in every job   
Show the relationships among the jobs.  Show the organizational Hierarchy Allocate  and deploy the resources  

ORGANIZATIONAL STRUCTURE 
It consists of the following things 
 Complexity  
Formalization
Centralization
Decentralization 
 Specialization 
Standardization
Departmentalization
Coordination
Authority 
Span of Control    

Complexity:  
The amount of differentiation in an organization. Means many departments and products and diversified business activities.  

 Formalization:  
The degree to which an organization relies on rules regulations and procedures to direct the behavior of employees and carry on organizational activities.  generally there are two types of organizational set ups  

Formal Organization

 Informal Organization 
 
   CENTRALIZATION:  
Vesting the decision making authority in the hands of top level management. This means all the decisions are to be made by top level management and the lower management is supposed to implement the decisions are made by the top level management.  
  DECENTRALIZATION:  
 Handing down the decision making authority to lower level management.   

SPECIALIZATION:   
Dividing the work and training and developing the people and making them master in particular areas, functions or tasks.   

STANDARDIZATION:  
Uniform or consistent procedures or policies that the employees are supposed to follow in order to fulfill their duties and achieve organizational goals.   

 DEPARTMENTATION:   
Making different sub divisions (on different basis) in an organization to facilitate the overall functioning of an organization .    

BASES GENERALLY USED FOR DEPARTMENTALIZATION  

Numbers:  
This is generally used in defense. Like core 1 2 or Brigade .1 or 2   

Functions:   
Accounting, Marketing, Finance or Production  
 
Products: 
 Chemicals, Pharmaceutical and Agricultural etc.  

 Process: 
 Painting, Denting, Assembling etc. 

Customers: 
 Individual, Corporate, Industrial and Agricultural etc.  

Geography: 
 North zone, South zone and Central zone etc.  

Cross Functional Teams:  
Forming teams of specialists and experts from different departments.   

COORDINATION:  
Integration of individual and group activities.   

  AUTHORITY:  
The right of a manager to tell the people what to do and expect them to do it.  

Line Authority :  
The right to control and direct the subordinates.  

Staff Authority: 
The right to support and help the boss.  

Functional Authority:  
In any particular area like accounting, marketing etc.  

 
SPAN OF CONTROL:  
The number of employees a manager can manage efficiently and effectively.   

ADVANTAGES OF LARGER SPAN OF CONTROL 
Low Cost  
Quick Decision Making  
Easy Working and implementation  
Saving of Time    

  
ORGANIZATIONAL DESIGN 
 DECISIONS ORGANIZATIONAL

DESIGN: 
 Defining and maintaining an organization’s structure.  

MECHANIC & ORGANIC ORGANIZATIONAL STRUCTURE SIMPLE STRUCTURE FUNCTIONAL STRUCTURE  DIVISIONAL STRUCTURE 
 TEAM BASED STRUCTURE  
MATRIX STRUCTURE  
AUTONOMOUS  
INTERNAL UNITS  BOUNDRY LESS ORGANIZATION  LEARNING ORGANIZATION Virtual Structure  

MECHANIC & ORGANIC ORGANIZATIONS  
MECHANIC ORGANIZATION:   
A rigid and tightly controlled organization 1.  

 ORGANIC ORGANIZATION:   
An adaptive and flexible organization. 

 
MECHANISTIC    
High Specialization 
Rigid Departmentalization 
Clear Chain of Command 
Narrow Span of Control  
Centralization  
High Formalization  

ORGANIC 

Cross Functional Teams 
Cross Hierarchical Team
Free Flow of Information
Wider Span of Control 
Decentralization 
Low Formalization  

SIMPLE STRUCTURE:  
Less departments, wider span of control, centralize authority and little formalization. 

 

https://hussainshahdab.blogspot.com/2022/09/organizational-structure.html

 FUNCTIONAL STRUCTURE:  

Based on departments of different functions. 

https://hussainshahdab.blogspot.com/2022/09/organizational-structure.html

DIVISIONAL STRUCTURE:  

Made of semi-autonomous units or Like ICI, Wal-Mart based on the categories of stores.

https://hussainshahdab.blogspot.com/2022/09/organizational-structure.html

 

TEAM BASED STRUCTURE : 

Structure made up of teams or work groups Like XEROX and Motorola .  

 Team based structure https://hussainshahdab.blogspot.com/2022/09/organizational-structure.html
 

MATRIX STRUCTURE:  

 Structure that assigns specialists from different functional departments to work on one or more projects being laid by project managers.     

https://hussainshahdab.blogspot.com/2022/09/organizational-structure.html  

AUTONOMOUS INTERNAL  UNITS 

 Full autonomous units run by a joint management. Like ABB is combination of 1000 companies all over the world, run by 8 directors in Zurich Switzerland. 

BOUNDARY LESS ORGANIZATION :  

An organization whose design is not defined by or limited to horizontal, vertical or external boundaries, imposed by a predetermined structure. Like Jack Welch did in GE. He eliminated the bureaucratic lairs and eliminated vertical and horizontal barriers. 

LEARNING ORGANIZATION : 

A boundary less organization, having strong mutual relationships based culture, keeps on foreseeing and bringing changes in the set up. 

VIRTUAL  STRUCTURE : 

Virtual organizations are often associated with terms such as virtual office, virtual team, and virtual leadership. The ultimate goal of a virtual organization is to deliver innovative, high-quality products or services on demand to customers on demand. 

CHAIN OF COMMAND:  

The continuous line of authority that extends from upper organizational levels to lower levels and clarifies who reports to whom. This is also called Scalar Chain principle.  

UNITY OF COMMAND: 

Each should report to one person. 

UNITY OF DIRECTION:  

All employees and managers should have on objective and thinking.

 

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