ADVANCED ORGANIZATIONAL
BEHAVIOR GROUP
ASSIGHNMENT (MBA 561)
1
Cont’d…….
TITLE:- Organizational Design
& Structure
What is an Organizational Structure
Is the organization's hierarchy of people and departments
as well as how information flows within the organization.
How job, tasks are formally divided, grouped and
coordinated.
the framework of the relations on jobs, systems, operating
process, people and groups making efforts to achieve the
goals.( Minterzberg ;1972)
The importance of the Organizational Structure
- enhances to an efficient operation of a business
- clearly defines its workers and their functions.
- define the hierarchy and the chain of command.
The Concept of Organization Structure
helps influence behavior and relationships of jobs
and functions
defines recurring activities and processes.
provides a purposeful and goal-oriented behavior.
Types Organizational Structure
2.1. Centralized Structure
- all decisions, as well as processes, are defined; and handled
by the top management.
- Employees and managers are responsible for the successful
implementation of decisions and have to follow them.
- has a top-down approach for decision flow
- Environment is stable
Executive
Director
Finance Oper-
Manager ations
Manager
Finance Admin. Senior Asst.
Executive Officer Manager Manager
Centralization means reservation of authority at central point within the
organization. In centralization, control and decision-making reside at the
top levels of management
Cont’d…….
2.2. Decentralized Organization Structure
- day-to-day tasks and the decision-making processes are
delegated to the supervisors at the middle and lower level
by the top management.
- This also increases the responsibility and accountability of
the employees.
- Environment is complex, uncertain
- Lower-level managers are capable and experience at
making decisions
Tall and Flat Organizations
• Flat Organizational Structure
– Common in decentralized organizations
– Fewer layers of management
– Rapid communication
– Wide spans of control
• Tall Organizational Structure
– Common in centralized organizations
– Multiple layers of management
– Slower communication
– Narrower spans of control
Cont’d……
Organizational Design
Organizational Design - the process of
constructing and adjusting an
organization’s structure to achieve its
goals.
the linking of
departments and
jobs within an
organization
H. Mintzberg, The Structuring of Organizations, Prentice Hall, © 1979, 301.
Reprinted by permission of Prentice-Hall, Inc, Upper Saddle River, NJ.
Key Organizational Design Processes
The process of deciding
how to divide the work
in an organization
Four Dimensions
Goal orientation
Time orientation
Interpersonal orientation
Formality of structure
Basic Principles of Organization Design
1. Division of labor
2. Unity of command
3. Authority and responsibility
4. Span of control
5. Departmentalization
Cont’d……
Division of Labor:
◦ individuals specialize in doing part of an activity rather
than the entire activity
Unity of Command:
◦ no person should report to two or more bosses
Authority & Responsibility:
◦ authority is a right, the legitimacy which is based on the
person’s position in the organization (legitimate power)
◦ power – an individual’s capacity to influence decisions
(other people)
◦ responsibility - an obligation to perform
Span of Control:
◦ a number of subordinates a manager can direct effectively
and efficiently
Cont’d…..
Departmentalization
◦ the way how activities should be grouped into
departments
◦ There are five ways:
·
Functional Product
Customer Geographic Matrix
Cont’d……
1. Functional Departmentalization:
- departments are grouped based on the main functions of
the organization,
- such as marketing, finance, human resources, and
operations.
2. Product Departmentalization:
- departments are formed around specific products or
services that the organization offers.
3. Matrix Departmentalization:
- combines functional and product departmentalization.
- It creates cross-functional teams that work on specific
products, projects, or initiatives.
Organization Design Concepts
There are two basic organization design concepts today:
1. mechanistic organization
2. organic organization
Mechanistic structure
- traditional types of organizations.
- rigid and bureaucratic .
- help companies achieve efficiency.
Organic structure
- modern types of organizations.
- decentralized, flexible, and aid companies in achieving
innovativeness.
Mechanistic Vs Organic Organization
• High specialization • Cross-functional teams
• Rigid departmentalization • Cross-hierarchical teams
• Clear chain of command • Free flow of information
• Narrow spans of control • Wide spans of control
• Centralization • Decentralization
• High formalization • Low formalization
Limited information network
(downward)
Low decision participation
Type of Organizational Design and Structure
There are two major categories of organizations-
1- formal and
2- informal.
Formal organizational design
- involves carefully planned and structured hierarchies, roles,
and reporting relationships.
- aims to provide stability, clarity, and a clear chain of
command within the organization.
Cont’d………
Informal organizational design
- represents the networks of relationships, interactions, and
communication patterns that develop naturally within the
organization.
- can emerge through social connections, shared interests,
and informal decision-making mechanisms within teams or
among individuals.
Cont’d……
Types of formal organizational design and structure:
1. Line Organizational Structure & Design
2. Functional Organizational Structure & Design
3. Line and Staff Organizational Structure & Design
4. Divisional Organizations