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Department of Education
Division of Cebu
ST. ISIDORE LABRADOR CHILD DEVELOPMENT CENTER, INC.
Maya, Daanbantayan, Cebu
Tel. No. 346 – 5975
Email address: silcdci_maya@yahoo.com

GRADE 12

ORGANIZATION AND
MANAGEMENT

Second Semester_MIDTERM
MODULE 1_WEEK 1

 Organization Theories for Effective Business Management

Most Essential Learning Competencies:

- Apply Organization Theories for Effective Business Management
-

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Senior High School-Grade 12 (Second Semester) *CRISELDA D. MANTOS

MIDTERM_ORGANIZATION AND MANAGEMENT

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# DIAGNOSTIC TEST
Try to answer this but DO NOT PASS. Use your Lecture notebook.
Direction: Identify the form of business organization as a sole proprietorship (SP),
partnership(P), or corporation(C) from the information provided. Then indicate whether the given
information is an advantage or a disadvantage. Write your answers on your activity
sheet/notebook.

A. Business B. Advantage/
Organization Disadvantage
Form

1. Limited Capital ____________ _____________

2. Practically Unlimited Life ____________ _____________
3. Easy to Form ____________ _____________
4. Capacity as a legal entity ____________ _____________
5. Flexibility of Operations ____________ _____________

# DISCUSSION
There are two main classifications of theories regarding organizational design(how
management achieves the right combination of differentiation and integration of the
organization’s operations, in response to the level of uncertainty in its external environment).
According to Robbins & Coulter(2009): Traditional and Modern. Traditional pertains to the
usual or old fashion ways while modern refers to contemporary or new design theories.

Traditional Theories include:

Simple
This organizational design has a few departments, wide spans of control, or a big
number of subordinates directly reporting to a manager: has a centralized authority figure and
has very little formalization of work: usually used by companies that start as entrepreneurial
ventures.
Simple Organizational Design
Strengths Weaknesses Strengths Weaknesses
 Flexible  The risk that overdependence with over-
 Fast decision-making and result dependence on a single person
 Clear accountability  No longer appropriate as the company
grows

Functional
This organizational design groups together similar or related specialties. Jobs are grouped in
departments with the specified skills and/or business
functions.
Example of the functional organization includes:
a. An English department for a particular school teaches all the English subject regardless
of what grade level the students are.
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b. The municipal water district is responsible for all the water needs in a particular town.
c. The purchasing department of an enterprise buys all the materials, supplies, and other
resources required by an enterprise, whether these inputs are required by marketing,
finance, accounting, human resources, or other departments.

Functional Organizational Design

Strengths Weaknesses Strengths Weaknesses
 Cost-saving advantages  Managers have little knowledge of other
 Management is facilitated because units’ function
workers with similar tasks are grouped.

Divisional
This organizational design is made up of separate business divisions or units, where the
parent corporation acts as overseer to coordinate and control the different divisions and provide
financial and legal support services.

Example of the divisional organization includes:

1. NORSU set up university branches located in the different towns in Negros Oriental.
2. Health Centers set up “barangay health units” to provide the health services of each
barangay in the town.
Divisional Organizational Design
Strengths Weaknesses Strengths Weaknesses
 Focused on results  Possible duplication of activities and
❖ Managers are responsible for what resources
happens to their products and services ❖ Increased cost and reduced efficiency

Modern Theories include:

Team Design
This organizational design is made up of workgroups or teams. They define team
structures such as roles and responsibilities, and they collaboratively identify working
arrangements that allow their team to deliver on their purpose and goals.

Team Organizational Design

Strengths Weaknesses Strengths Weaknesses
 Better Communication  Better Communication
 Teams Resolve Problems Quicker  Teams Resolve Problems Quicker
 Potential conflict  Potential conflict
 Some people are not team players  Some people are not team players
 Flexible and Empowered Workforce  Under-performing employees hide behind
 Empowerment of team members and the team
reduced barriers among functional areas

Matrix-Project Design
This refers to an organization design were specialists from different departments work
on projects that are supervised by a project manager. This design results in a double chain of
command wherein workers have two managers - their functional area manager and their project
manager-who share authority over them.
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Matrix-Project Organizational Design

Strengths Weaknesses
 A specialist is involved in the project
 Increased communication efficiency
 Improved employee motivation
 Increased teamwork
 Maximize resource usage
 Increase professional development
Strengths Weaknesses
 Task and personality conflicts
 The potential conflict between managers
and projectsAuthority confusion
 Reduced employees effectiveness
 Increased management overhead costs

Project design
It refers to an organizational design where employees continuously work on a
project.

Project Organizational Design

Strengths Weaknesses Strengths Weaknesses
 Flexible designs  Task and personality conflict
 Fast decision making

Boundary-less Design
This refers to an organization design where the design is not defined or limited by
vertical, horizontal, and external boundaries. There are no hierarchical levels that separate
employees, no departmentalization, and no boundaries that separate the organization from
customers, suppliers, and other stakeholders. The key to this design is electronic
communication, where information is shared with the member enterprise with distinct
competencies.

Boundary-less Organizational Design

Strengths Weaknesses Strengths Weaknesses
 Highly flexible  Lack of control
 Responsive and draws on talent where it  Presents communication difficulties
is found

# ASSESSMENT
Use SHORT BOND PAPER in doing this ASSESSMENT. Don’t forget the Preliminary
Entries and 1 inch margin each side.

Direction: Answer the following questions.

1. What are the three traditional organization design theories? Briefly define each?

2. What are the advantages and disadvantages of simple organizational design? Do you
agree or disagree with these advantages and disadvantages?

3. Name the different modern organizational design theories? Briefly design each.

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Senior High School-Grade 12 (Second Semester) *CRISELDA D. MANTOS

MIDTERM_ORGANIZATION AND MANAGEMENT

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