Topic: Organizational Structure Presented by: Sana Majeed , Sundas Zaheen , Raja Amir, Ahmer Waqar &

Sabeel Younas Program: B-Com (2nd Semister, 2016)

ORGANIZATIONAL STRUCTURE DEFINED

Division of labor and patterns of coordination, communication, workflow, and formal power that direct organizational activities.Refers to formalized patterns of interactions that link a firm’s tasks, technologies, and people

WHY DO WE NEED ORGANIZATIONAL STRUCTURE Without a formal organizational structure,

employees may find it difficult to know who they officially report to in different situations, and it may become unclear exactly who has the final responsibility for what.

BUILDING BLOCK DIAGRAM OF ORGANIZATIONAL STRUCTURE

BASIC AND DIFFERENT TYPE OF ORGANIZATION STRUCTURE

1) Functional StructureAn organizational form in which the major

functions of the firm, such as production, marketing, R&D, and accounting, are grouped internally.

FUNCTIONAL STRUCTURE Advantages

Enhanced coordination and control Centralized decision making Enhanced organizational-level perspective More efficient use of managerial and technical talent Facilitated career paths and development in specialized areas

Disadvantages Impeded communication and coordination due to differences in

values and orientations May lead to short-term thinking (functions vs. organization as a

whole) Difficult to establish uniform performance standards

2) DIVISIONAL ORGANIZATIONAL STRUCTURE

An organizational form in which products, projects, or product markets are grouped internally.

Also called multidivisional structure or M-Form

Advantages Separation of strategic and operating control Quick response to important changes in external

environment Minimal problems of sharing resources across functional

departments Development of general management talent is enhanced

Disadvantages Can be very expensive Can be dysfunctional competition among divisions Differences in image and quality may occur across divisions Can focus on short-term performance

3) Matrix organizational structure An organizational form in which there are multiple lines

of authority and some individuals report to at least two managers.

Advantages Facilitates the use of specialized personnel,

equipment and facilities Provides professionals with a broader range of

responsibility and experience Disadvantages

Can cause uncertainty and lead to intense power struggles

Working relationships become more complicated Decisions may take longer

BASIC FORM OF ORGANIZATION STRUCTURE WITH RESPECT TO COORDINATING WORK ACTIVITIES

An organizational structure is used by businesses to provide an overall hierarchy and reporting structure for each job within the organization, and defines how an organization will operate to meet its goals. For small businesses, one of several basic types of organizational structure can provide a platform to allow for future growth without making extensive changes to job responsibilities, the management structure or financial budgets for each area

COORDINATING WORK ACTIVITIES1. Informal communication

Sharing information, forming common mental models

Allows flexibility Vital in no routine and ambiguous situations Easiest in small firms Applied in team-based structures Includes integrator roles

2. Formal hierarchy• Direct supervision• Assigns formal (legitimate) power to manage

others • Coordination strategy for departmentalization

3. Standardizationa) Standardized processes (e.g., job descriptions)b) Standardized outputs (e.g., sales targets)c) Standardized skills (e.g., training)

ELEMENTS OF ORGANIZATIONAL STRUCTURE >

Elements ofOrganizational

Structure

Span of Control

Centralization

Department-alization

Formalization

X

SPAN OF CONTROL

Number of people directly reporting to the next level

Assumes coordination through direct supervision

Wider span of control possible when:

Other coordinating mechanisms present

Routine tasks Low employee

interdependence

It is really important to have an organizational structure that will allow those companies to have the ultimate confidence

Susan Estrada