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Jolisa Gilmore

October 6, 2015
MGMT 3301.04 - Voelker

Elements and SEE-I: Organizational Structure

Task #1 - The Elements
How are work decisions made within a company?
What are the elements of an organizational structure?
Questions and Issues
What purpose does the P-O-L-C framework serve?
How to assess whether a company is more suited for a centralized or decentralized
organization structure.
How do these elements work together?
The major concept developed in this chapter was the P-O-L-C framework. P stands for
planning, O stands for organizing, L stands for leading, and C stands for
The P-O-L-C framework explains the primary responsibilities of a manager. While
managers have duties outside of these, the POLC framework is central to the daily
responsibilities of a manager.
Points of View
Managers that are responsible for making all the important organization decisions.
Team of employees that play a role in making important organizations decisions.
Stakeholders making more money from the company theyre invested in because the
company has an organizational structure that works well with its goals and objectives.
In a centralized organization, employees are always reporting to their superiors, even
when making minor decisions.
In a decentralized organization, employees and managers have a relationship more
similar to that of a team than that of a superior and subordinate.
As a manager, I would use this information by using it to create a thorough business plan
that is able to answer which organizational structure would work best for me. Besides
this, the information from the text has showed me how important preparation and a
clear understanding of a companys goals helps in being organized.
In the instance managers failed to apply this knowledge, I would expect their company to
be unsuccessful and eventually go out of business because a lack of structure and
leadership within an organization would eventually lead to money loss.

Task #2 - SEE-I
Simply put, the organizational structure is how work is done inside of an
organization. Having a reliable organizational structure is important because it
controls the flow of how smoothly things are done. This becomes more apparent
when you start to analyze the advantages and disadvantages of using a
centralized structure, where the decisions are made by top managers, or a
decentralized structure, where decisions are made by a team. There are four
elements that make up organizational structure: centralization, formalization,
hierarchal levels, and departmentalization.
It is the responsibility of top level managers to find the organizational structure
that works the best for their needs.
Centralization means exactly how much is higher management involved in
making business decisions. Are they completely responsible or only partly
Formalization means how formal is the work culture. Is the organization one that
enforces a strict by the book environment or is the environment more relaxed?
Hierarchal levels means how many levels are there in an organizations
structure. Are there few or many? Are managers more hands on in their
employees work or are they distanced from their employees?
Departmentalization means dividing parts of a business into different
departments according to what they do or other commonalities between the
departments. Think of how businesses have different types of departments (i.e. IT
department, marketing department, etc.).
Alex decided to open his own finance firm. He decided to enlist some of his
former peers from grad school.
They ranged from backgrounds in finance, to backgrounds in law and math.
While building a business plan and meeting with his future coworkers, a question
that arose was who would be making the decisions that would impact the
companys future.
After an hour of discussion, the group concluded that the top managers would be
responsible for the companys decision, because of the credentials they bought to
the table.
Their business structure would be more centralized and employees in nonmanagerial positions would report information to them, as managers, before
decisions were made about the company.
Think of a centralized organization as the relationship between one of a child and
a teacher. Managerial authorities can be seen as the teacher while nonmanagerial employees can be seen as the child.
Before a child is able to do something, they must go to their teacher for approval.
If the teacher says yes, the child may do it, but they are only able to do it if their
teacher explicitly states it is okay.

The decision power is completely up to the child and if the child disobeys, they
will be remanded for their actions.
This dynamic is advantageous because it takes the pressure off of the child to
make important decisions alone.