Organization

Theories and
Application
Narisa Pacis
Lyngel Joie Grande
Organizational design

the manner in which a 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.
 Traditional organizational design
theories include:
Simple
This organizational design has few departments, wide
span 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 out as entrepreneurial ventures.
According to Robins and Coulter(2009) there are two main
classification of theories regarding organizational design :
traditional and modern
Traditional- pertains to the usual or old
• Simple
• Functional
• Divisional
Modern- refers to contemporary or new design
theories
• Team Design
• Matrix-Project Design
• Boundary-less Design
 Simple Organizational Design

Strengths Weaknesses

• flexible • risk that overdependence w/ over-

dependence on a single person

• fast decision-making and results • no longer appropriate as the company

• clear accountability
 Functional
the organizational design groups together
similar or related specialties. It is, generally, funtional
deparmentalization utilized and put into practice in
an entire organization. For example: A marketing
firm that markets cars and related products like tires,
car batteries, and accessories. It also has strengths
and weaknesses.
 Simple Organizational Design
Strengths Weaknesses

• Cost saving advantages • Managers have little knowledgeof other

units functions

• Management is facillitated because

workers with similar task are
grouped together

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 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.

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 Simple Organizational Design
Strengths Weaknesses

• Focused on results • Possible duplication of activities and

resources

• Managers are responsible for what • Increased cost and reduced efficiency
happens to their products and
services

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Modern organizational design
theories include:
Team Design
in team design, the entire organizations is
made up of work groups or teams. Its advantages include
impowerment of team members and reduced barriers
among funtional areas. It also has disavantages, including a
clear chain of command and great pressure on teams to
perform.
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Matrix-Project Design
Matrix Design
refers to an organization design where specialist 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 funtional
area manager and their project manager –who share authority
over them.

Advantage: specialists are involved in the project.

Disadvantage: task and personality conflicts.
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 Project Design
refers to an organizational design where
employees continously work on a project.

Advantages: flexible designs and fast decision making.

Disadvantages : complexity of assigning people to projects
and task and personality conflicts.

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 Boundary-less Design
this is another modern design organizational
design where the design is not defined or limited by vertical,
horizontal, and external boundaries. In other words, there
are no hierachical levels that separate employees, no
departmentaliztion, and no boundaries that separate the
organization from customers, suppliers, and others
stakeholders.
Advantages: being highly flexible and responsive
Disadvantages : lack of control and problems in
communication
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 Thank You!

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