Organization and Management

Chapter 4: Organizing
Lesson 2 : Types of Organization
Group 2

Daileen Salomsom and Mark Dave Abila

Reporter
 Objective

- Distinguish the various types of

Organization structures
 Organization structure
is a system made up of tasks to be accomplished,
work movements from one work level to other works
levels in the system, reporting relationships, and
communication passageways that unite the work of
different individual persons and groups.
 VERTICAL ORGANIZATIONAL STRUCTURE
• According to Bateman and snell (2008) - a vertical structure
clears out issues related to authority rights, responsibilities,
and reporting relationships.

• Authority rights refer to the legitimate rights of individuals,

appointed in position like president, vice president, manager,
and the like , to give orders to their subordinates, who in
turn, report to them what they have done
Organizational chart of
vertical structure
• Refers to the fact that the
organization works from the
top to the bottom, and that
employees are not required
or expected to contribute to
the choices that you make
regarding how the company
operates.
 Advantages
• Vertically structured organizations have clear
lines of authority, with quicker decision
making and better designation of tasks to
employees. Staffs in a vertical structure have
well-defined roles and responsibilities, which
reduces duty ambiguity and encourages high
production efficiency.
 Disadvantages
• The vertical organizational structure also has
lots of disadvantages. Due to the lack of
autonomy, employees from the bottom may
have lots of limitations to share their
constructive ideas or creative proposals, and
it will take more time to respond to a
problem or implementing decisions.
HORIZONTAL ORGANIZATIONAL STRUCTURE
- is one that has only a few layers of management.
Managers have a wider span of control with more
subordinates in a flat structure, and there is usually a short
chain of command.

- refers to the departmentalization of an organization into

smaller work units, like departments and staff
departments, as their tasks become increasingly varied and
numerous.
Two departments under the horizontal
organizational structure

• Line department
• Staff department
 Line Department

- Deal directly with the firm's primary

goods and services ; responsible for
manufacturing, selling, and providing
services to clients.
 Staff Department
- Support the activities of the line
departments by doing research,
attending to legal matters,
performing public relations duties,
etc.
Departmentalization maybe done
using three approaches:

• Functional Approach
• Division Approach
• Matrix Approach
 Functional Approach
- where the subdivision are formed
based on specialized activities such
as marketing, production, financial
management, and human resources
management.
 Division approach
- where department are formed
based on management of their
products, customers, or
geographic areas covered.
 Matrix approach
- is a hybrid form of
departmentalization where managers
and staff personnel report to a
superiors, the functional manager, and
the divisional manager.
 Network organization structure
-is a collection of independent, usually single function
organizations/companies that work together in order to
produce a product or service. Such network
organization are each capable of doing their own
specialized work activities independently, like
producing, distributing, designing, etc., but are capable
of working effectively at the same time with other
network members
Thank you
for
listening!