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Organizational Structures

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Organizational Structures

Todays companies, more team

orientated.

Organizational Structures,

becoming more important.

Defines how job tasks are

coordinated.

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Organizational Structures

Many different physical layouts.

Could be very tall, or very flat.

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Organizational Structures

Could be anywhere in-between

those extremes.

Flat Structure Team orientated.

Open atmosphere.

Problems solved quickly.

More interaction between different

hierarchical levels.

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Organizational Structures

Tall Structure More levels of organization

Limited interaction.

More personal responsibility.

If you have a problem, you would talk to

your manager, who would talk to their

manager, etc.

Often, the message that you told toyour manager, is different from the one

they portray to their manager

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Organizational Structures

When deciding which

organizational structure is best for

their company managers need to

address six key elements: Work Specialization

Departmentalization

Chain of command

Span of control

Centralization and decentralization

Formalization

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Six Key Questions

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Six Key Elements

1. Work Specializat ionor Divisionof Labor:

The degree to which tasks in the

organization are subdivided into separate

jobs Ex. Henry Ford, assembly line

Individuals specialize in doing part of an

activity, rather than the whole thing

May lead to boredom, fatigue, stress andincreased absenteeism

Raises employee productivity and

efficiency, but lowers job satisfaction

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Six Key Elements

2. Departmental izat ion: The basis on which jobs are grouped

together

Creates competitiveness betweendepartments

Narrow vision with respect toorganizational goals

5 different kinds of departmentalization: Functional

Product

Geographic

Process

Customer

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Six Key Elements:Types of Departmentalization

A) Functional Functional Departmentalization groups

activities by functions performed.

More efficient to put together people with

common skills and orientation into a

common unit.

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Six Key Elements:Types of Departmentalization

B) Product: Grouping your organization

depending on the type of product

created is productdepartmentalization.

Increases accountability for product

performance.

Also works with services.

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Six Key Elements:Types of Departmentalization

C) Geographic: Departmentalized on the basis of geography,

or territory.

Ex. International companies having differentdepartments for each country.

D) Process: Organizes departments by the processing

that occurs.

Ex. inspecting, packing, shipping

E) Customer: Departmentalize by the type of customer the

organization seeks to reach.

Ex. Corporate or individual customers.

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Six Key Elements

3. Chain of Command: Unbroken line of authority that extends form

the top of the organization to the bottom.

Designates where you go if you have a

problem.

Becoming less structured than it was in the

past.

4. Span of Control: The number of employees a manager can

efficiently and effectively direct.

Generally determines the number of levels

an organization has.

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Six Key Elements

5. Centralization andDecentralization:

Decentralization: The decision discretion is pushed down to

lower-level employees.

Take action quicker.

More people provide input into decisions.

Easier to address customer concerns.

Centralization: The degree to which decision making is

concentrated at a single point in theorganization.

Top management makes all the decisions.

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Six Key Elements

6. Formalization The degree to which jobs within the

organization are standardized.

Low Formalization:

Job behaviours are relatively non-programmed.

Lots of employee freedom.

Less standardization.

High Formalization:

Explicit job description.

Lots or organizational rules.

Clearly defined procedures for work

processes.

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Two Models of

Organizations

Mechanistic Model: A structure characterized by extensive

departmentalization, high formalization,a limited information network and

centralization.

Organic Model: A structure that is flat, uses cross

hierarchical and cross-functional teams,

has low formalization, possesses acomprehensive information network,and relies on group decision making.

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Mechanistic vs. Organic Models

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Two Models of Organizations

Which model is chosen depends on

the members of the organizations

experience, personality, the work

task and their cultural background.Mechanistic:

People with a high degree of bureaucratic

orientation

Organic: People with a low degree of bureaucratic

orientation