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Foundations of Organization structure

What is organizational structure?


An

organizational structure defines how job tasks are formally divided, grouped, and coordinated

Elements of organizational structure


Work

specialization Departmentalization Chain of command Span of control Centralization and decentralization Formalization

Work specialization
The

degree to which the tasks in the organization are subdivided into separate jobs

Departmentalization
The

basis by which jobs are grouped together Functions Product Geography Process Customer

Chain of command
The

unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who report to whom

Authority
The

rights inherent in a managerial position to give orders and to expect the orders to be obeyed

Unity of command
A

subordinate should have only one superior to whom he or she is directly responsible

Delegating authority
Clarify

the assignment Specify the subordinates range of discretion Allow the subordinate to participate Inform others that delegation has occurred Establish feedback controls

Span of control
The

number of subordinates a manager can efficiently and effectively direct

Centralization
The

degree to which decision making is concentrated at a single point in the organization

Decentralization
Decision

discretion is pushed down to lower level employees

Formalization
The

degree to which jobs within the organization are standardized

Common organizational designs


The

simple structure The bureaucracy The matrix structure

Simple structure
A

structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization

The Bureaucracy
A

structure with highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command

Matrix structure
A

structure that creates dual lines of authority; combines functional and product departmentalization

New design options


The

team structure The virtual organization The boundary less organization

Team structure
The

use of teams as the central advice to coordinate work activities

Virtual organization
A

small, core organization that outsource major business functions

Boundary less organization


An

organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams

Why do structures differ?

Mechanic model High specialization Rigid departmentalization Clean chain of command Narrow spans of control Centralization High formalization

Organic model Cross-functional teams Cross-hierarchical teams Free flow of information Wide spans of control Decentralization Low formalization