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ORGANIZATION

An organization is not a haphazard collection of people, but a meaningful combination of groups

and individuals working together purposefully to meet organizational goals.

In a simple words, An organization is a group of people who work together to meet the
organization’s goals and objective.

How should companies organize themselves into separate units so as to be most effective?
This question is a venerable one in the field of business—and a very important one. OB
researchers and theorists have provided considerable insight into the matter by studying what is
called….

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ORGANIZATIONAL STRUCTURE

  Itrefers to the formal configuration between individuals and groups with respect to the
allocation of tasks, responsibilities, and authority within organizations. 

Organizational structure is a way or method by which organizational activities are divided,

organized and coordinated.

 The organizations created the structures to coordinate the activities of work factors and
control the member performance.

A person cannot directly see the structure of an organization; it is an abstract concept.

However,the connections between various clusters of functions of which an organization
is composed can be represented in the form of a diagram known as an organization
chart. Specifically, an organization chart may be considered a representation of an
organization's internal structure.

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 ORGANIZATIONAL CHART
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 Organization charts are useful tools for specifying how various tasks or functions are
interrelated within organizations. 
Image source: https://media.istockphoto.com/vectors/organizational-chart-corporate-business-hierarchy-
vector-id592684434?k=20&m=592684434&s=612x612&w=0&h=6aIMP-L9DSLCv3vPEDFhpiYVcG-
oxqCFekYKckUiE8A=

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BASIC ELEMENTS OF ORGANIZATIONAL STRUCTURE

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Division of Labor
 The standard organization chart reflects the fact that the many tasks to be performed
within an organization are divided into specialized jobs. 
 The more tasks are divided into separate jobs, the more those jobs are specialized and
the narrower the range of activities incumbents are required to perform. 

In theory, the fewer tasks a person performs, the better he or she may be expected to
perform them, freeing others to perform the tasks that they perform best. (We say "in theory"
because if specialization is too great, people may lose their motivation to work at a high level,
possibly causing performance to suffer. 
As you might imagine, the degree to which employees perform specialized jobs is likely
to depend on the size of the organization. The larger the organization, the more likely
opportunities for specialization exist. 
For example, an individual working in a large advertising agency may get to specialize in
a highly narrow field, such as writing jingles for radio and TV spots for automobiles. In contrast,
someone working at a much smaller agency may be required to do all writing of print and
broadcast ads in addition to helping out with the artwork and meeting with the clients. Obviously,
the larger company might be expected to reap the benefits of efficiently using the talents of
employees (a natural result of an extensive division of labor).

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 Span of Control
  The number of people formally required to report to each individual manager is
immediately clear. This number constitutes what is known as a manager's span of
control
 Those responsible for many individuals are said to have a wide span of control, whereas
those responsible for fewer are said to have a narrow span of control. 

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Image source:https://theintactone.com/2019/03/01/be-u1-topic-8-organizational-structure/

As you can see in the image,  the board of directors is responsible for only the actions of
the CEO, giving this individual a narrower span of control than the CEO himself, who has a span
of control of Six individuals which is the managers of  Sales & marketing, Production, HR,
Finance, Research & development, and purchasing department.  

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Line versus Staff Positions

  A line position is a position that has authority and responsibility for achieving the major
goals of the organization. 
 A staff position is a position whose primary purpose is providing specialized expertise
and assistance to line positions. 
In simple words, staff positions cannot make a decision but they can provide
suggestions and advices.  For example, such an individual may help corporate officials
decide whether a certain product name can be used without infringing on copyright
restrictions. This individual may be said to hold a staff position.
Differences between line and staff personnel are not unusual. Specifically, staff
managers tend to be younger, better educated, and more committed to their fields than
to their organizations. 
Line managers might feel more committed to their organizations, not only
because of the greater opportunities they have to exercise decisions, but also because
they are more likely to perceive themselves as part of a company, rather than as an
independent specialist whose identity lies primarily within his or her specialty area. 

SLIDE 10

 Decentralization
 The president of General Motors, introduced the notion of a "central office," the place
where a few individuals made policy decisions for the entire company. Another part of
Sloan's plan involved pushing decisions regarding the day-to-day operation of the
company lower on the organizational hierarchy, thereby allowing the individuals who
were most affected by corporate decisions to make those decisions themselves.
 This process of delegating power from higher to lower levels within organizations.
 It is the opposite of centralization, the tendency toward allowing only a few powerful
individuals or groups to hold most of the decision-making power. 
Recent years have seen a marked trend toward increasing decentralization. As a
result, organization charts might show fewer staff positions, as decision-making authority
is pushed farther down the hierarchy. Many organizations have moved toward
decentralization to promote managerial efficiency and to improve employee satisfaction
(the result of giving people greater opportunities to take responsibility for their own
actions).

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MECHANISTIC AND ORGANIC STRUCTURES

Mechanistic Structure
A mechanistic structure, also known as a bureaucratic structure, describes
an organizational structure that is based on a formal, centralized network. 
 The mechanistic structure is best suited for companies that operate in a
stable and certain environment. In general, a mechanistic structure is
easy to maintain and rarely needs to be changed when an organization
operates in a stable environment.
 Because the environment is relatively stable, complex decision-making
processes that involve multiple parties are not required.
  Subordinates are expected to follow the directions of management and
not question their rationale. 
 Authority reflects a well-defined hierarchy where top-level managers
make the majority of the decisions.
Organic Structure
 Organic structures are used in organizations that face unstable and dynamic
environments and need to quickly adapt to change. When an environment changes,
an organization must be able to gather, process, and disseminate information very
quickly. 
Failure to do so can directly affect an organization's ability to maintain its
competitive advantage

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 Communication is lateral and rapid in these complex environments.

To achieve this, organizations that use an organic structure will integrate
functional areas and departments together so that information can flow seamlessly
between them. This fast distribution of knowledge results in an increased ability to
respond to changes in the internal and external environments.
 Needs can change quickly in an organic organization, making it necessary to
continually redefine tasks that allow each person to be responsible for multiple tasks
at a time. 
 Organic organizations also practice joint specialization
whereby employees work together and coordinate tasks of a larger project
often in the form of teams. Having a broad understanding of how multiple tasks work
together allows each individual to respond quickly to change.

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MECHANISTIC AND ORGANIC STRUCTURES

MECHANISTIC ORGANIC

Stability  Change unlikely  Change likely 

Specialization Many specialists  Many generalists 

Formal rules  Rigid rules  Considerable flexibility 

Authority  Centralized in a few top Decentralized, diffused throughout the

people  organization 
 

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A MATRIX ORGANIZATION 

 In a matrix organization, a product structure is superimposed on a functional structure.

 This results in a dual system of authority in which some managers report to two bosses
—a project (or product) manager and a functional (departmental) manager.
Functional managers organize the work of similar people (people performing a
given function). They hand off their deliverables to another group. Project managers
coordinate the work of numerous people to deliver a product to the organization.

 Organizations are most likely to adopt matrix designs when they confront certain
conditions. These include a complex and uncertain environment (one with frequent
changes), and the need for economies of scale in the use of internal resources.
Specifically, a matrix approach is often adopted by medium-size organizations
with several product lines that do not possess sufficient resources to establish fully self-
contained operating units. Under such conditions, a matrix design provides a useful
compromise.

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Advantages of matrix design

1. They permit flexible use of an organization's human resources. 
Individuals within functional departments can be assigned to specific products or
projects as the need arises and then return to their regular duties when this task is
completed.

2. Matrix designs offer medium-size organizations an efficient means of responding quickly

to a changing, unstable environment

3. Such designs often enhance communication among managers,

They literally force matrix bosses to discuss and agree on many matters.

Unfortunately, matrix designs can create frustration and stress caused by having
to report to two different supervisors. However, in situations in which organizations must
stretch their financial and human resources to meet challenges from the external
environment or take advantage of new opportunities, matrix designs can play a useful
role.