Organisational Design

Lecture Three: Structure

Christopher Nicol
Term paper
 The Configuration and Complexity
of the Firm
• A firm’s choice of configuration, also referred to as structure or
architecture is a very important decision for the executive (Burton
and Obel, 2004)
• Configuration illustrates how a firm partitions larger tasks into
smaller tasks either by specialization or product, and also indicates
communication patterns.
• Org. Design of configuration involves 2 complementary problems:

• 1- how to partition a big task of the organization into smaller basic tasks
of the subunits.
• 2- how to coordinate these smaller subunit tasks such that they fit together
to fit the larger task or organisational goals. (Mintzberg, 1983)
 Complexity

• How many subunits?

• How many levels of hierarchy?
• How many departments?
 Organisational Complexity

• Org. complexity is a property or characteristic of organisational

structure
• Width, or horizontal differentiation is the degree of task
specialisation across the hierarchy
• Height, or vertical differentiation is the depth of the hierarchy –
top to bottom.
 Configuration

• Two fundamental dimensions exist to distinguish

basic configurations:
• 1- product/service/customer orientation
• 2- functional specialisation
Functional Organisational Structure
Silo Effect found in Functional
Structures
Functional Structures
Project Organisational Structure

Figure 2.8
Project Structures
Matrix Organisational Structure

Figure 2.9
Matrix Structures