FUNDAMENTALS OF

ORGANIZATIONAL
STRUCTURES
 What is
ORGANIZATIONAL
STRUCTURE?

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 What is
ORGANIZATIONAL
STRUCTURE?

It defines how job tasks are formally

divided, grouped, and coordinated.

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 Pyramidal
Organizational
Struture

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 Flat
Organizational
Struture

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 Six Key Questions for
Organizational Structure

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 To what
degree are
tasks
subdivided
into separate The degree to which tasks in the organization are
jobs? subdivided into separate jobs

Benefits: Downsides:
 Boredom,
 Efficiency-less time
 stress
changing tasks
 Low productivity
 Easier to train
 High turnover
employees

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 On what
basis will
jobs be
grouped
together?
The basis on which jobs are grouped together.

Types:
 Functional
 Product
 Geographic
 Process
 Customer

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Departmentalization by Function
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Departmentalization by Product
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Departmentalization by Geography
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Departmentalization by Process
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Departmentalization by Customer
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To whom do
individuals
and group
report? The unbroken line of authority that extends from
the top of the organization to the lowest eschelon
and clarifies who reports to whom

Authority Unity of
Who has the right to Command
give orders and Subordinates should
expect them to be have only one superior
obeyed

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 “
The concepts of chain of command, authority, and
unity of command have substiantially less relevance
today because of advancements in computer
technology and the trend toward empowering
employees.

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 How many
individuals can
a manager
efficiently and
effectively
direct?
The number of subordinates a manager can
efficiently and effectively direct.

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Small Span
 Expensive, more
managers
 Makes vertical
communication
more complicated
 Encourages tight
supervision and
discourages
autonomy

Large Span
 Empowers workers
 Speeds up decisions

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 Where does
decision-
making
authority lie?
The degree to which decision-making is
concentrated at a single point in the
organization.

The degree to which decision-making is

distributed to lower level employees..

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To what degree
will there be
rules and
regulations to
direct
employees and
managers?
The degree to which jobs within the organization
are standardized.

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 Common
Organizational
designs SIMPLE STRUCTURE

BUREAUCRACY

MATRIX STRUCTURE

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 SIMPLE
STRUCTURE
 Low degree of
departmentalization
 Wide spans of
control
 Authority centralized
in a single person
 Little formalization

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Simple Structure

STRENGTH WEAKNESSES
 Simplicity: fast, flexible,  Works best in small
inexpensive organizations
 Can slow down decision-
making in larger
organization
 Can be risky

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 BUREAUCRACY
 Highly routine operating tasks
achieved through specialization
 Very formalized rules and
regulations
 Tasks grouped into functional
departments
 Centralized authority
 Narrow spans of control
 Decision-making that follows
chain of command

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 Bureaucracy

STRENGTH
 Standardizes activities in
an efficient manner
WEAKNESSES
 Creates subunit conflicts
 There is an obsessive
concern with following
rules.

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 MATRIX
STRUCTURE
 Dual lines of
authority
 Combines
functional and
product
departmentalization

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Matrix Structure

STRENGTH WEAKNESSES
 Facilitates coordination  Power struggles,
when there are many confusion, stress
activities
 More communication
 Efficient allocation of
specialits

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Thank You
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