MM204 Ba204 Ed204

Divine Word College of Bangued
Bangued, Abra
GRADUATE SCHOOL
Module in MM204/BA204/ED204
(Concepts and Dynamics in Organization and Management)
Module 4. Various Types of Organization
Learning Objectives:
After a study of this topic, the students should be able to:
1. Learn the basic concepts and theories of the different types of organizational
structures; and
2. Determine the appropriate type of organization structure an organization is using.
Introduction:
In setting up a business firm, one of the important component is the establishment of

an appropriate organizational structure. The structure signifies the hierarchical arrangement
of various positions in the firm. It shows the distribution of authority and responsibility formally
in the organization. The structure may be simple or comprehensive, but it can generally be
identified as belonging to certain well-defined forms. There are distinct types of organizational
structure which have developed during the growth of business firms, of which the most
common are the line type, and the committee.
The Line Type of Organization
The line type of organizational structure is a historically the oldest type where there is
a direct flow of authority from one top position to immediate subordinate levels. This is known
by different terminologies: the scalar type, military type, vertical type and departmental type.
All types of internal organizational structure have mostly been modifications of the line
organizations. The concept of the line type holds that in any organization derived from a scalar
process, there must be a single head who commands it.
Characteristics of the line type of organization:

1) It is the oldest and simplest type.
2) Each level of management has equal rights.
3) There is a vertical flow of authority and responsibility.
4) There is unity of command.
BA204/MM204 Concepts and Dynamics in Org’n & Mgt -Prof. Reagan P. Benabese,MBA,MM
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5) There is scalar chain in the line type of organization.

6) There is limit on the number of subordinates under on superior.
Advantages of the line type of organization

1. Directness
2. Clear-cut division of authority and responsibility
3. Strong discipline
4. Unified control
5. Immediate decision
6. Flexibility
7. Development of all-around executives at higher levels of authority
Disadvantages of the line type of organization

1. Heavy burden of work by the manager
2. Concentration of authority
3. Lack of specialization
4. Lack of communication
5. Scope of favouritism
The Functional Type of Organization

In the functional type of organization, all activities in the firm are grouped together
according to certain functions like production, marketing, finance and personnel. These
functions are put under the charge of different persons. The person in-charge of a function
follows it throughout the organization and also controls the individuals working in the
functional area. This means that if as a person performs several functions, he will be under
the direct charge of the several persons-in-charge of these functions. The functional in-charge
is an expert in his own field. It is rare to find a pure functional plan to carry out the primary
functions.
Taylor identified his classic example of a functional type of organization as follows:
(1) Office or Planning Division divided into:

- Order of work or route clerk
- Instruction card clerk
- Time and cost clerk
- Shop disciplinarian
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(2) Factory Division divided into:

- Gang boss
- Speed boss
- Inspector
- Repair of maintenance foreman
Characteristics of the Functions type of organization:

1. The work is divided into specialized functions.
2. The superior specialist commands an authority and therefore gives orders relative to
his specific functions throughout the lines.
3. The specialist must be consulted before any decision is taken on matters relating to
his specialized area.
4. The responsibilities of a functional authority are mainly discharged by other managers.
5. It is a flat-topped organization in comparison to the line type.
6. The direct flow of authority from the general of the firm down to the workers is done
away with or eliminated.
Advantages of Functional Type

1. Specialization
2. More efficiency
3. Separation of mental and physical functions
4. Economy (in a large scale production caused by standardization and specialization)
5. Cooperation
6. Expansion
Disadvantage of Functional Type

1. Confusion
2. Lack of coordination
3. Difficulty of determining responsibility
4. Conflict (equal positions may not agree on certain things)
The Line and Staff Type of Organization
The line and staff type of organization is the combination of the salient features of both the
line and functional types. In additional to the regular line personnel, we now bring in the
concept of “staff”. Staff means those personnel of a business firm that help the line of work
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most effectively in accomplishing the primary objectives of the firm. The staff officers support
the line officers who hold the authority.
2 Departmental Organizations in the line and staff type of organization:
1) The line departmental organization doing the actual manufacturing or whatever type
of business the firm is engaged in, This group exercises the faculty of leadership in
getting things done; and
2) The staff departmental organization acting in an advisory function. This group provides
data as to ways and means. This group is made up primarily of experts and specialists
who possess the needed intelligence and skill in varies problems. The role of this
group are to conduct research and investigation work, analyse data needed, plan and
coordination information to be readily made available to the line officers for business
efficiency.
Characteristics of Line and Staff type of organization

1) It has two type of managers: the line managers and staff managers.
2) Line managers execute the functions of decision-making, issuing orders and
controlling while the staff managers execute the functions of advising, assisting and
providing expert specialized services.
3) Unity of command.
4) There is scalar chain.
Advantages of Line and Staff Type

1. Based on planned specialization.
2. Adoption of research and development programs.
3. Balanced decisions.
4. Lesser burden on the line officers.
5. Greater flexibility.
Disadvantages of Line and Staff Type of organization

1. Confusion on the authority, responsibility and accountability between the line and staff
officers.
2. Limited authority of the staff officers resulting them to be less effective.
3. Arising conflict between the line and staff officers.
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The Matrix Type of Organization
The matrix type of an organization is a combination of the project type of organization

and the functional type of organization. Authority flows vertically within the functional
departments, while the authority of the project managers flows horizontally crossing vertical
lines. Thus, matrix type of organization is created, “when project management id
superimposed on a stable hierarchical structure usually of a functional nature. Here the
individuals working on a project have a continuing dual assignment – to their projects and to
their base department.”
Essential Elements of Matrix Type of Organization

1. Built around specific projects.
2. Personnel from various departments.
3. Different roles.
4. Management by objectives.
Advantages of Matrix type of organization

1. Functional vertical relationships lead to operational flexibility.
2. Provides focus on projects.
3. Retains the benefits of highly specialized expertise and capabilities of functional
departments.
Disadvantages of Matrix type of organization
1. Conflict between project groups and functional groups is inevitable.
2. Demands proper coordination of a number of specialized skills.
3. Frequent movements from one project to another may also create anxiety about
career path progress.
References:
Stoner J.A. (1995), Management, Pearson Education
Salvador, S. et al (2013), Principles and Practices of Management and Organization.

Allen Adrian Books Inc.
Koontz H. et al (2009) Essentials of Management: An International Perspective. Eight

Edition. Tata McGraw Hill Education Private Ltd.
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EXERCISES:
I. Knowledge Enhancement. Read more….
 Committee type of organization; its characteristics, advantages and disadvantages.

II. Knowledge and Skill Evaluation. Objectively answer the following questions: (Total 50 points)
1. Based on the given descriptions and characteristics of each of the type of organization,
present charts with explanations by citing the differences and similarities (if any) of the
types of organization. (20 points)
2. Explain flexibility as one of the advantages of the line type of organization. (10 points)
3. How does specialization be an advantage and disadvantage in an organization? (10
points)
4. Discuss the elements of Matrix type of organization. (10 points)
Coordinating instructions for the entire semester:
1. Read the topics of this module and do the given exercises.

2. Submission of output will be not later than March 19, 2022 via email to
edrheign23@gmail.com with subject as MM204/BA204/ED204 Module 4. Late submission
will incur point deductions.
3. Document must be in a word file format, following the heading of this module, letter (short)
size, arial font and 11 font size.
4. Rubrics for evaluating your module output are as follows:
A. General Rubrics.
- Content of Output (80%)
- Timeliness of Submission (20%)
B. Content of Output
Focus. The single controlling point made with an awareness of tasks about a specific
topic.
Content. The presence of ideas developed through facts, examples, anecdotes, details,
opinions, statistics, reasons and/or explanations.
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Organization. The order developed and sustained within and across paragraphs using
transitional devices and including introduction and conclusion.
Style & Convention. The choice, use and arrangement of words and sentence structures
that create tone and voice. This also includes the grammar, mechanics and sentence
formation.
End of this module

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Divine Word College of Bangued

Module 4. Various Types of Organization

In setting up a business firm, one of the important component is the establishment of

The Line Type of Organization

Characteristics of the line type of organization:

5) There is scalar chain in the line type of organization.

Advantages of the line type of organization

Disadvantages of the line type of organization

The Functional Type of Organization

Taylor identified his classic example of a functional type of organization as follows:

(1) Office or Planning Division divided into:

(2) Factory Division divided into:

Characteristics of the Functions type of organization:

Advantages of Functional Type

Disadvantage of Functional Type

The Line and Staff Type of Organization

2 Departmental Organizations in the line and staff type of organization:

Characteristics of Line and Staff type of organization

Advantages of Line and Staff Type

Disadvantages of Line and Staff Type of organization

The Matrix Type of Organization

The matrix type of an organization is a combination of the project type of organization

Essential Elements of Matrix Type of Organization

Advantages of Matrix type of organization

Stoner J.A. (1995), Management, Pearson Education

Salvador, S. et al (2013), Principles and Practices of Management and Organization.

Koontz H. et al (2009) Essentials of Management: An International Perspective. Eight

I. Knowledge Enhancement. Read more….

 Committee type of organization; its characteristics, advantages and disadvantages.

Coordinating instructions for the entire semester:

1. Read the topics of this module and do the given exercises.

End of this module

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