Organisational STRUCTURE

The ORGANISATIONAL STRUCTURE REPRESENTS THE SKELETAL FRAMEWORK FOR ORGANISATIONAL BEHAVIOUR. It IS A SYSTEM OF CONSTANT INTERACTION WITH THE ENVIRONMENT, GOAL, PEOPLE AND TECHNOLOGY.

STEPHEN P.ROBBINS HAS DEFINED ORGANISATIONAL STRUCTURE AS ‘HOW JOB TASKS ARE FORMALLY DIVIDED, GROUPED AND COORDINATED’. It TELLS HOW SPECIALISED AND NON-SPECIALISED TASKS ARE PERFORMED.

Classification OF ORGANISATIONAL STRUCTURE

Organisational STRUCTURE IS THE DIFFERENTIATION OF FUNCTION TO FACILITATE THE ACHIEVEMENT OF GOALS. The MAIN CHARACTERISTICS OF THE ORGANISATIONAL STRUCTURE ARE:-

1. Differentiation:- JOBS ARE DIFFERENTIATED FOR ACHIEVING THE GOALS MORE EFFICIENTLY, THE JOBS ARE SUBDIVIDED INTO HORIZONTAL AND VERTICAL FORMS.

Horizontal DIFFERENTIATIONS:- THE DIVISION OF LABOUR IS THE BEST EXAMPLE OF HORIZONTAL DIFFERENTIATION. The JOB CAN BE DIVIDED ON THE BASIS OF PURPOSES, PROCESS, PERSON AND PLACE.

PRODUCT LINE CHANGE ON DEPARTMENTALISATION IS HORIZONTAL DIFFERENTIATION. Technological CHANGES ARE DIFFERENTIATION FOR THE IMPROVEMENT OF THE PROCESS.

Vertical DIFFERENTIATION:-VERTICAL DIFFERENTIATION DEALS WITH HIERARCHY, POWER INFLUENCE, AUTHORITY RESPONSIBILITY AND SPAN OF CONTROL, LEVEL AND FUNCTION ARE VERTICAL DIFFERENTIATION. Vertical DISTANCE IS CREATED BETWEEN THE INDIVIDUAL AND GROUPS. Scalar OR CHAIN OF COMMAND IS USED FOR DIFFERENTIATION. Generally, FIVE LEVELS OF AUTHORITY ARE OBSERVED THAT IS MIDDLE, LOWER, SUPERVISORS, AND EMPLOYEES.

Standardisation:- THE ORGANISATIONAL STRUCTURE IS FORMALISED OR STANDARDISED FOR SIMPLICITY AND EFFICIENTLY. The PROCESS INPUT AND THE OUTPUT ARE UNIFORM. Jobs ARE EXPLICITLY DEFINED AND DESCRIBED. Employees HAVE THE LEAST AMOUNT OF FREEDOM UNDER THE

STANDARDISED STRUCTURE. A LESS STANDARDISED STRUCTURE GIVES MORE FREEDOM TO THE EMPLOYEES. They EXERCISE DISCRETION IN THEIR WORK.

Specialisation:- EACH AND EVERY PART OF THE WHOLE WORK IS DONE BY SPECIALISED PEOPLE. The TOTAL WORK IS BEATEN UP INTO SMALLER FACTS AND THE RESPONSIBILITY OF PERFORMANCE OF EACH PART IS ASSIGNED TO EXPERTS. This MAKES PEOPLE MORE SPECIALISED AND ACTIVE.

SPECIALISATION MAKES ALL THE WORK MORE USEFUL. Whether IT INVOLVES SKILLED OR UNSKILLED FUNCTIONS. It HAS INCREASED PERFORMANCE AND EMPLOYEES’ SATISFACTION.

2. Departmentalisation:- IT IS GROUPING OF SPECIALISATION INTO SPECIFIC FUNCTIONS. Different FUNCTIONS ARE GROUPED ON A SIMILAR BASIS. It IS USED IN ALL TYPES OF ORGANISATIONS ACCORDING TO THEIR OBJECTIVES AND FUNCTIONS. The DEPARTMENTALISATION IS DONE ON SEVERAL BASES SUCH AS PRODUCT, PROCESS, PLACE, CUSTOMER, SERVICE AND ADMINISTRATION.

Product DEPARTMENTALISATION:- DEPARTMENTS ARE DIVIDED ON THE BASIS OF THE PRODUCT. An ORGANISATION ENGAGED IN CLOTH MANUFACTURING HAS READY-MADE DEPARTMENT, CLOTH DEPARTMENT HAS ITS OWN HEAD WHO LOOKS AFTER THE TOTAL FUNCTIONS OF HIS DEPARTMENT. The ACCOUNTABILITY ARE SPECIFICALLY ASSIGNED FOR EACH DEPARTMENT.

Process DEPARTMENTALISATION: - THE PROCESS OF ORGANISATION IS THE BASIS OF DEPARTMENTALISATION, FOR EG. Proofreading, PRINTING, MACHINE REPAIRING AND SETTING OF PLACES ARE THE IMPORTANT DEPARTMENTS OF A NEWSPAPER PRINTING ORGANISATION. Each PROCESS REQUIRES DIFFERENT SKILLS. The PEOPLE WORKING ON A PROCESS BECOME SPECIALISED WITHIN REASONABLE PERIOD.

Place DEPARTMENTALISATION: - THE DEPARTMENT IS DEVELOPED ACCORDING TO TERRITORY, GEOGRAPHICAL AREAS PLACE OF FUNCTIONS. Regional DEPARTMENTS, HAVE THEIR SPECIALITIES IN PERFORMANCE AND FUNCTIONS. Head OFFICE AND BRANCH OFFICES ARE THE BASIC OF EXAMPLES OF PLACE DEPARTMENTALISATION.

Customer SERVICE DEPARTMENTALISATION: - DEPARTMENTS ARE FORMED ACCORDING TO THE NEEDS OF THE CUSTOMER’S SERVICE. Effort ARE MADE TO SATISFY THE CUSTOMER’S NEEDS IN EVERY DEPARTMENT. If IT IS NOT SATISFIED, THE CUSTOMERS ARE REQUESTED TO CONSULT SOME SPECIALISED PERSONNEL IN HIGHER DEPARTMENTS.

Administration DEPARTMENTALISATION: - AN ORGANISATION DEVELOPS ITS OWN ADMINISTRATION DEPARTMENT. The PERSONNEL DEPARTMENT, SECRETARIAL DEPARTMENT, TRAINING AND PLACEMENT ARE THE VARIOUS EXAMPLES OF SUCH DEPARTMENTS. Head OFFICE, ZONAL OFFICE, DIVISIONAL, BRANCH OFFICES ARE GLARING EXAMPLE OF DEPARTMENTALISATION.

3. Chain OF COMMAND:- THE ORGANISATIONAL STRUCTURE DECIDES THE MODE OF THE CHAIN OF COMMAND LINE ORGANISATION HAS A SCALAR CHAIN OF COMMAND AND THE FUNCTIONAL ORGANISATION HAS A SUPERVISORY COMMAND. The CHAIN OF COMMAND IS THE UNBROKEN LINE OF AUTHORITY THAT EXTENDS FROM TOP OF THE ORGANISATION TO THE LOWEST LEVEL. It DECIDES THE AMOUNT OF AUTHORITY FLOWS FROM A HIGHER TO A LOWER LEVEL IN DIFFERENT FORMS IN SEPARATE ORGANISATION.

IN THE LINE ORGANISATION, THE COMMAND IS BY ONLY ONE PERSON TO PERSON TO WHOM THE LOWER MANAGER IS LIABLE TO REPORT. It IS KNOWN AS THE UNITY OF COMMAND.

In A FUNCTIONAL ORGANISATION, THE EMPLOYEES ARE ACCOUNTABLE TO THE FUNCTIONAL HEADS. The CHAIN OF COMMAND DECIDES THE SPAN OF CONTROL WHICH IS THE NUMBER OF SUBORDINATES A MANAGER CAN EFFECTIVELY AND EFFICIENTLY DIRECT. The SPAN OF CONTROL IS DECIDED BY THE FORMULA, SPAN OF CONTROL

=N[2N/2+(N-1)] WHERE ‘N’ IS THE NUMBER OF EMPLOYEES.

4. Centralisation:- THE ORGANISATIONAL STRUCTURE IS ALSO BASED ON CENTRALISATION AND DECENTRALISATION. Centralisation IS THE DEGREE TO WHICH DECISION MAKING IS CONCENTRATED AT A SINGLE POINT. It IS THE RIGHT OR AUTHORITY WHICH IS CONFINED TO A FEW PEOPLE IN THE ORGANISATION. On THE CONTRARY, WHEN A LOWER

MANAGER IS GIVEN THE DECISION MAKING POWER, IT IS DECENTRALISATION. Under DECENTRALISATION, DECISION IS MORE EFFECTIVE AND QUICK. Modern ORGANISATION MAINLY ADOPT DECENTRALISATION FOR FLEXIBILITY AND RESPONSIVENESS.

Factors INFLUENCING ORGANISATIONAL STRUCTURE

The IMPORTANT FACTORS INFLUENCING THE STRUCTURE ARE CORPORATE STRATEGY, SIZE, TECHNOLOGY AND ENVIRONMENT.

Corporate STRATEGY

The CORPORATE STRATEGY HAS AN IMPORTANT IMPACT ON THE STRUCTURE. The DICTATORIAL STRATEGY OF AN ORGANISATION REQUIRES A BUREAUCRATIC STRUCTURE. The MECHANISTIC STRUCTURE IS LOOSENED UNDER DEMOCRATIC STRATEGY. A STRUCTURE IS DEVELOPED TO ACHIEVE THE OBJECTIVE THROUGH THE APPLICATION OF CORPORATE STRATEGY. The HIERARCHICAL STRUCTURE DEPENDS ON THE OVERALL STRATEGY AT THE CORPORATE AND DEPARTMENTAL LEVELS.

The STRATEGIC FRAMEWORK ARE IMITATION INNOVATION AND COST MINIMISATION.

IMITATION REFERS TO FOLLOWING ITS OWN PREVIOUS STRATEGY. The PREVIOUS STRATEGY HELPS TO FIND OUT THE SUITABLE STRATEGY FOR MINIMISING COSTS AND MAXIMISING REVENUE.

The INNOVATION STRATEGY REFERS TO THE CHANGES IN THE EXISTING STRATEGY FOR THE BETTER.

The TECHNOLOGICAL DEVELOPMENTS ARE INCLUDED IN THE STRATEGY. Innovation STRATEGY DEALS WITH LOW SPECIALISATION, LOW CENTRALISATION AND LOW STANDARDISATION.

INNOVATION STRATEGY ENCOURAGES THE ORGANIC STRUCTURE AND COST MINIMISATION STRATEGY HELPS TO MAINTAIN THE MECHANISTIC STRUCTURE, WHEREIN CONTROL SPECIALISATION, FORMALISATION AND CENTRALISATION ARE AT A HIGH LEVEL.

Size

The SIZE OF AN ORGANISATION HAS IMPORTANT BEARING ON THE ORGANISATIONAL STRUCTURE. A LONGER ORGANISATION CANNOT PERFORM EFFECTIVELY WITH A SIMPLE OR BUREAUCRATIC STRUCTURE. It HAS TO ADOPT THE MATRIX STRUCTURE. An ORGANIC STRUCTURE IS SUITABLE FOR A BIG ORGANISATION. Specialization, DEPARTMENTALISATION, FORMALISATION, DECENTRALISATION ARE REQUIRED FOR BIG AND LARGE ORGANISATION.

Technology

Technological DEVELOPMENTS INFLUENCES THE STRUCTURE SOPHISTICATED TECHNIQUES REQUIRE A MECHANISTIC APPROACH, WHEREIN HIGH SPECIALISATION, RIGID DEPARTMENTALISATION, CLEAR CHAIN OF COMMAND ARE NEEDED. Technology REFERS TO HOW IT IS APPLIED IN ALL THE AREAS OF MANAGEMENT THAT IS FINANCE, MARKETING, PERSONAL, PRODUCTION ETC.

Environment

The ENVIRONMENT IS THE REACTIVE RESULTS OF VARIOUS INTERNAL AND EXTERNAL FACTORS INFLUENCING THE BEHAVIOUR OF MANAGERS, EMPLOYEES, CUSTOMERS’ DISTRIBUTORS, GOVERNMENT AGENCIES AND OUTSIDERS DECIDES THE SPECIFIC FORM OF ENVIRONMENT. The CAPACITY, COMPLEXITY AND VOLATILITY OF THE ENVIRONMENT INFLUENCES THE ORGANISATIONAL STRUCTURE.

Capacity:-

The CAPACITY OF AN ORGANISATION TO SUSTAIN THE ENVIRONMENT ENCOURAGING GROWTH IS THE DECIDING FACTORS OF AN ORGANIC STRUCTURE. An ENVIRONMENT INHIBITING DEVELOPMENT COMPELS ONE TO ADOPT A MECHANISTIC FORM.

Complexity:-

Complex FUNCTIONS REQUIRE A MECHANISTIC AND MATRIX STRUCTURE. A HETEROGENEOUS ENVIRONMENT REQUIRES AN ORGANIC STRUCTURE. A HOMOGENOUS AND CONCENTRATED ENVIRONMENT ENCOURAGES THE ORGANISATION TO ADOPT A ENVIRONMENT HAS MORE HETEROGENEITY AND DISPERSION.

Volatility:- IT IS RELATED WITH PREDICTABILITY AND STABILITY. A MANAGER HAVING A VOLATILE SYSTEM ADOPTS A MECHANISTIC STRUCTURE. If IT IS HIGHLY VOLATILE, THE ORGANISED STRUCTURE WILL BE FORMALISED, SPECIALISED AND SO ON. In LOW VOLATILITY, THE ORGANIC STRUCTURE IS SUFFICIENT. The DEGREE OF VOLATILITY DECIDES OF COMBINATION OF THE MECHANISTIC AND ORGANIC STRUCTURE.

Organisational DESIGN

The STRUCTURAL DESIGN OF AN ORGANISATION HAS BEEN GIVEN PRIME IMPORTANCE IN THE ORGANISATIONAL BEHAVIOUR.

BASICALLY THREE DESIGNS ARE ACCEPTED IN BEHAVIOURAL SCIENCE THAT IS SIMPLE STRUCTURE, BUREAUCRATIC STRUCTURE AND MATRIX STRUCTURE.

Simple STRUCTURE

A SIMPLE STRUCTURE HAS A LOW DEGREE OF COMPONENTS OF STRUCTURE. There IS LOW LEVEL OF CONTROL, SINGLE-PERSON CONTROL, LESS STANDARDISATION OR FORMALISATION AND LOW DEGREE OF DEPARTMENTALISATION. The SPAN OF CONTROL HAS ONLY TWO OR THREE VERTICAL LEVELS AND LOOSE EMPLOYEE COMMAND. The MANAGER IS ONE OR VERY FEW BUT CONTROLLED BY ONLY ONE. There ARE VERY SMALL NUMBER OF EMPLOYEES. The EVERY FUNCTION IS SIMPLE AND WELL KNOWN. Accountability IS CLEAR. The STRUCTURE IS IN EXPENSIVE TO MAINTAIN. The SIMPLE STRUCTURE IS VISIBLE IN SMALL ORGANISATION.

Bureaucratic STRUCTURE

A BUREAUCRATIC STRUCTURE IS BASED ON RULES AND REGULATION WHICH ARE CONSIDERED THE PRIME MOVERS OF ORGANISATIONAL BEHAVIOUR. It IS STANDARDISED.

BUREAUCRACY IS HIGHLY ROUTINE, OPERATING THROUGH, SPECIALISATION. A BUREAUCRATIC STRUCTURE HAS A NARROW SPAN OF CONTROL, SCALAR CHAIN OF COMMAND, FUNCTIONAL DEPARTMENTALISATION, CENT RAINED AUTHORITY AND HIGHLY FORMALISED

FUNCTION. The ACTIVITIES ARE DIVIDED INTO HIGHLY SPECIALISED STRUCTURE TO MAKE THE FUNCTIONS EFFICIENT AND EFFECTIVE. In THE ABSENCE OF SPECIALISATION, THE PERFORMANCE WILL NOT BE QUALITATIVE AND EFFICIENT. Managers HAVE NO SCOPE FOR PERSONAL DISCRETION AS THEY HAVE TO FOLLOW THE RULES AND REGULATIONS WHILE TAKING ANY DECISIONS.

CENTRALISATION IS ONE OF THE MAIN TENETS OF A BUREAUCRATIC STRUCTURE. Duplication IS AVOIDED ALTHOUGH IN A LENGTHY SPAN OF CONTROL, THE ORDER UNNECESSARILY FLOWS TO VARIOUS CHANNELS.

Matrix STRUCTURE

A MATRIX STRUCTURE COMBINES THE DIFFERENT FACTORS OF ORGANISATIONAL BEHAVIOUR IN AN EFFICIENT MANNERS. Employees HAVE TO CARRY VARIOUS RESPONSIBILITIES ACCORDING TO THE NATURE OF WORK, HIERARCHY AND POSITION. Matrix IS A COMBINATION OF DEPARTMENTALISATION, FUNCTIONALIZATION AND PRODUCT. Functions ARE USED TO CREATE SEVERAL STRUCTURE. Similarly MAIN PRODUCTS BY PRODUCTS, SUB PRODUCTS AND ALLIED PRODUCTS ARE FACTORS OF DIVISIONALISATION.

THE MATRIX STRUCTURE IS A CO-ORDINATION OF DIVERSE FUNCTIONS. Instead OF A SCALAR CHAIN OF COMMAND THERE ARE MULTIPLE SUPERVISORS AS PER THE NEED OF THE FUNCTIONS. It IS MOST USEFUL IN LARGE ORGANISATIONS. It PROVIDES ECONOMY OF SCALE BY MINIMISING THE COST OF OPERATION AND MAXIMISING THE REVENUE.

Completed BY:-

Danveer KUMAR VEER