1. organizational structure

8/16/2019 1. Organizational Structure

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Lecture 11 & 12

Organizational Structure


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Organizational structure


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Introduction $cont%• Developed in late 1th century and earlier

2'th century(• )*O placed at the top and everyone else

placed in layers do+n

•

hin-ing and decision ma-ing +as made attop and physical +or- done by employeesorganized in departments

• Such structure got popularity in pro!t, non

pro!t and military organizations• he changing environment./


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0ey *lements of OrganizationalStructure

1 or- Specialization2 Information Sharing erspective

3 Departmentalization

4 )hain of )ommand5 Span of )ontrol

6 7ormalization


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1or- Specialization

• or- specialization or division of labor thedegree to +hich activities in theorganization are subdivided into separate

8obs

•

*ssence is to divide 8ob in number of steps,each completed by a separate individual

• 9ot all employees have same level of s-ills

• It is most e:cient +ay to utilize employeess-ills and improve through repetition

• ;e


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or- Specialization $)ont%• It +as vie+ed as unending source of

increased productivity• =ut from 16's researchers started arguing

that it cause boredom, absenteeism, stress,poor llo+ing to do complete 8ob


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2 Information Sharing erspective• If the structure doesn?t !t the information re


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Aertical Information Sharing• Aertical lin-ages are used to coordinate

activities bet+een the top and bottom of anorganization and are designed primarily forcontrol of the organization

• Organization may use variety of structural devices,

such as(• Hierarchical Referral $roblem can be referred to

neCt upper level and the ans+er is passed bac- insimilar +ay%

•

Rules and plan $if problem decisions are repetitionsthen rules or procedures are established to giveemployees direction for problem solving%

• Vertical Information Systems $includes periodicreports, +ritten information, and computerbased

communications distributed to managers%

B t I t


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Bor zonta In ormat on ar ng$cont%

• It overcomes the barriers of communication

• rovides opportunities for coordination amongemployees to achieve unity of e"orts andob8ectives

• It is horizontally among departments

Information System• )omputerized information systems enable

managers or frontline +or-ers throughout theorganization to routinely eCchange information

about problems, opportunities, activities ordecisions

Direct Contact

• > higher level of horizontal lin-age is direct

contact among employees +ho are a"ected


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Borizontal Information Sharing$cont%Task orce

• If the problem is among various departmentsthen a temporary tas- force is created to solvethe issues, +hich is usually disbanded after thetas- accomplishment It is composed of

representative from various departments +ho areinvolved in the issue

ull!time Integrator• Enli-e the liaison person, the integrator does not

report to one of the functional departments beingcoordinated Be or she located outside thedepartments and has the responsibility forcoordinating several departments

B i t l I f ti Sh i


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Borizontal Information Sharing$cont%

Teams• eams tend to be the strongest horizontal lin-age

mechanism

• eams are permanent tas- forces and are often usedin con8unction +ith a fulltime integrator +hen

activities among departments re virtual team is one that is made up of

organizationally or geographically dispersedmembers +ho are lin-ed primarily through advanced

information and communications technologies


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3 Departmentalization

Departmental Frouping• 7unctional grouping, divisionalgrouping, matriC grouping, horizontal

grouping, virtual net+or- grouping


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7unctional Structure• In a functional structure, activities are grouped

together by common function from the bottom tothe top of the organization

• Buman -no+ledge & s-ills +ith respect to speci!cactivities are consolidated

•

his structure is most e"ective(• hen indepth eCpertise is critical to meet

organizational goals

• hen the organization needs to be controlled and

coordinated through the vertical hierarchy, and+hen e:ciency is important

• his structure could be


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Airtual Structure

•

he most +idespread design trend in recentyears has been the outsourcing of variousparts of the organization to outside partners

• > fe+ organizations carry outsourcing to theeCtreme to create a virtual net+or-structure ith a virtual net+or- structure,sometimes called a modular structure, !rmsubcontracts most of its ma8or functions orprocesses to separate companies andcoordinates their activities from a small

head


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Bybrid Structure• @ost large organizations, in particular, often use a

hybrid structure that combines characteristics ofvarious approaches tailored to speci!c strategicneeds

• Organizations combine characteristics of functional,divisional, geographic, horizontal, or net+or-structures to ta-e advantages of strengths ofvarious structures and avoid some of the+ea-nesses

• hey o"er greater #eCibility

• One hybrid that is often used is to combine thefunctional and divisional structures

• > second hybrid approach that is increasingly usedtoday is to combine characteristics of functional,

divisional, and horizontal structures


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4 )hain of )ommand

• It deals +ith !tting the +or- activities and

departments together in the organizationalhierarchy

• It is unbro-en line of authority that eCtends fromthe top of the organization to the lo+est echelon

and clari!es +ho reports to +hom• *ach manager is given a degree of authority in

order to meet hisGher responsibility

• Enity of command is given to preserve unbro-en

line of authority• Lin-s all persons on an organization and sho+s +ho

reports to +hom


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6 7ormalization

• Degree to +hich 8obs +ithin an organization

are standardized• Incumbents have minimum amount of

discretion over +hat, +hen and ho+ to do

•

*Cpected to handle same input in same +ayresulting consistent and uniform output

• *Cplicit 8ob descriptions, lots of rules,procedures

• It eliminates employee alternative behaviorengagement


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Symptoms of De!ciency•Decision ma-ing is delayed or

lac-ing in


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@echanistic & OrganicStructure

High specialization

Rigiddepartmentalizatio

nClear chain ofcommand

"arro# spans ofcontrol

Centralization

High formalization

Cross!functionalteams

Cross!hierarchical

teamsree $o# ofinformation

%ide spans of

controlDecentralization

&o# formalization

1. organizational structure

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