CHAPTER 8

ORGANISATION
STRUCTURE
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LECTURE OUTLINE
Nature of organisation structure
Job design
Types of departmentalisation
Methods of vertical coordination
Promoting innovation

(methods of horizontal coordination)

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NATURE OF
ORGANISATION STRUCTURE
Formal pattern of interactions
and coordination designed by
management to link the tasks of
individuals and groups in
achieving organisational goals.

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NATURE OF
ORGANISATION STRUCTURE
Four elements:
1.
2.
3.
4.

Assignment of tasks and

responsibilities to individuals and units
Clustering these to form a hierarchy
Mechanisms for vertical coordination
Mechanisms for horizontal
coordination

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NATURE OF
ORGANISATION STRUCTURE
The organisation chart

Line diagram depicting broad outlines of an

organisations structure

The chain of command

Unbroken line of command ultimately linking

each individual with the top organisational
position

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NATURE OF
ORGANISATION STRUCTURE
Principles of chart design

As few hierarchical levels as possible

Charts should show who has authority over who
Charts should show official lines of
responsibility & communication

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NATURE OF
ORGANISATION STRUCTURE
ABC INC.
CEO
DIRECTOR
HRM

DIRECTOR
FINANCE

DIRECTOR
SALES

MANAGER
FINANCE
SUBORDINATE

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JOB DESIGN
Work Specialisation
Degree to which work is broken down

into various jobs

Most organisations require work
specialisation, otherwise every
employee would need to be able to
perform every job

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JOB DESIGN
Specification of task activities
associated with a particular job

logical grouping of tasks

design of jobs affects employee
motivation

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JOB DESIGN
Four main approaches:
Job simplification
Job rotation
Job enlargement
Job enrichment

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JOB DESIGN
Job simplification
Process of configuring jobs so
job-holders have only a small
number of narrow activities to
perform.

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JOB DESIGN
Job rotation
Practice of periodically shifting
workers through a set of jobs in a
planned sequence.

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JOB DESIGN
Job enlargement
Allocation of a wider variety of similar tasks
to a job to make it more challenging.
Job Scope
Number of different tasks an employee
performs in a particular job.

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JOB DESIGN
Job enrichment
Process of upgrading the job-task in
order to increase significantly
potential for growth, achievement,
responsibility and recognition.

Job depth

Job characteristics model

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JOB DESIGN
Job characteristics model:
Model developed to guide jobenrichment efforts.
Core job characteristics
Critical psychological states
Outcomes

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JOB DESIGN
Core job characteristics
Skill variety
Task identity
Task significance
Autonomy
Feedback

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JOB DESIGN
Critical psychological states:
Experienced meaningfulness of work
Experienced responsibility for work

outcomes
Knowledge of the actual results of work

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CORE JOB CHARACTERISTICS

Outcomes
High internal work motivation
High growth satisfaction
High general job satisfaction
High work effectiveness

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Core Job
Characteristics

Critical
Psychological
States

Outcomes

skill variety
experienced meaningfulness
task identity
of the work
task significance

high internal work

work motivation

autonomy

high growth
satisfaction

feedback from

experienced responsibility
for work outcomes
knowledge of results from
work activities

high work
effectiveness

Moderators:
1.Knowledge & skill
2.Growth need strength
3.Context satisfactions
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MANAGING DIVERSITY:
ALTERNATIVE WORK SCHEDULES
Balancing
Balancing work
work and
and personal
personal life
life
Flexitime:
Flexitime:
core
corehours
hours
to
tobe
beworked,
worked,
more
more
at
atemployee
employee
discretion
discretion

Job
Jobsharing:
sharing:
two
twoor
or
more
morepeople
people
sharing
sharing
aafull-time
full-timejob
job

Compressed
Compressedwork
work
week:
week:
longer
longerhours
hoursworked
worked
per
perday,
day,shorter
shorter
working
workingweek
week

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MANAGING DIVERSITY:
ALTERNATIVE WORK SCHEDULES
Schedules based on adjustments in the
normal work schedule rather than in the
job content.

Flexitime
Compressed work week
Job sharing

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DEPARTMENTALISATION
Clustering individuals into units,
and units into departments and
larger units, to facilitate achieving
organisational goals.

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TYPES OF
DEPARTMENTALISATION
Functional
Divisional
Hybrid
Matrix

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DEPARTMENTALISATION
Functional:
Functional:based
basedon
on
expertise,
expertise, skill
skill&&
similarity
similarityofofwork
workactivity
activity

Divisional:
Divisional:based
basedon
on
product
productorormarket
market
similarities
similarities

Hybrid:
Hybrid:some
some
activities
activitiesgrouped
groupedby
by
function,
function,some
some by
by
products
productsorormarkets
markets

Matrix:
Matrix:Superimpose
Superimpose
horizontal
horizontaldivisional
divisional
over
overhierarchical
hierarchical
functional
functionalstructure
structure

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METHODS OF VERTICAL
COORDINATION
Linking of activities at the top of the
organisation
with those at the middle and lower levels to
achieve organisational goals.

Formalisation
Span of management
Centralisation vs decentralisation
Delegation
Line & staff positions
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METHODS OF VERTICAL
COORDINATION
Formalisation:
Degree to which written policies, rules,

procedures, job descriptions and other documents

specify what actions are (not) to be taken under a
given set of circumstances
Extent of formalisation tends to grow with
age & size.

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METHODS OF VERTICAL
COORDINATION

Factors influencing span of management:

High competence levels

Low interaction requirements
Work similarity (between organisational peers)
Low problem frequency and seriousness
Physical proximity
Few non-supervisory duties of managers
Considerable available assistance
High motivational work possibilities

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METHODS OF VERTICAL
COORDINATION
Centralisation
Extent to which power & authority are retained at
the top organisational levels

Decentralisation
Extent to which power & authority are delegated to
lower levels

Factors favouring centralisation

Large organisational size

Geographic dispersion
Technological complexity
Environmental uncertainty

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METHODS OF VERTICAL
COORDINATION
Extent
Extentto
towhich
whichpower
powerand
andauthority
authoritywill
willbe
beretained
retainedat
at
upper
upperlevels.
levels.Influenced
Influencedby:
by:
Large
Largesize:
size:
larger
largerorganisations
organisations
likely
likelyto
tobe
bemore
more
decentralised.
decentralised.

Geographic
Geographicdispersion:
dispersion:
more
moredispersed
dispersedlikely
likelyto
tobe
be
decentralised,
decentralised,to
toenable
enable
control
controlat
ataanumber
numberof
ofsites.
sites.

Technological
Technologicalcomplexity:
complexity:
with
withmore
morecomplex
complex
technology,
technology,need
needto
todevolve
devolve
authority
authorityto
tolower
lowerlevels.
levels.

Environmental
Environmentaluncertainty:
uncertainty:
with
withrapid
rapidchange,
change,need
needfor
for
more
moreemployees
employeesto
tobe
beinvolved
involved
ininresponding
respondingto
tochallenges.
challenges.

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METHODS OF VERTICAL
COORDINATION
Delegation
Assignment of part of a managers work to others,
along with both responsibility & authority
necessary to achieve expected results

Factors restraining delegation

Fear of subordinate failure

Time to train subordinates
Enjoy doing tasks
Release of authority
Concern for task performance
Fear subordinate competence

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METHODS OF VERTICAL
COORDINATION
Configuration of line and staff positions:
Line authority
Authority following the chain of command
established by the formal hierarchy
Functional authority
Authority of staff over others in the organisation in
matters related directly to their respective functions
e.g. HRM dept

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Horizontal coordination:
Linking of activities across departments at

similar levels
METHODS
OF
HORIZONTAL
Need for information processing across
COORDINATION
the organisation
Promotes innovation through
dissemination of ideas & information
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METHODS OF HORIZONTAL
COORDINATION
Horizontal coordination promoted by:
Slack resources
Cushion of resources that facilitates adaptations
to internal/external pressures, as well as initiation
of changes
Information systems
One information source for many users
Lateral relations
Direct contact, liaison roles, task forces, teams
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LECTURE SUMMARY
The nature of organisational structure

Definition
Organisation chart
Job design

Job design

Designing for motivation: job enlargement,

rotation, enrichment, simplification

Types of departmentalisation

Functional, divisional, hybrid, matrix

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LECTURE SUMMARY
Methods of vertical coordination

Formalisation

Span of management

Centralisation vs decentralisation

Delegation

Line & staff authority

Copyright 2005 McGraw-Hill Australia Pty Ltd

PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin

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LECTURE SUMMARY
Methods of horizontal coordination

Slack resources

Information systems

Lateral relations

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