ORGANISATIONAL STRUCTURING

ORGANISATION STRUCTURE

After all the functions of an organisation has been

determined, (Functional Grouping) the organisation
structure must be determined.

An organisation structure can be identified as the pattern

of jobs and groups of jobs in an organisation.

An organisation structure is an abstract concept. One

cannot actually see the structure = like the skeleton of a
human being
 The decisions that managers have to make in terms
of organisation structure

• How the overall task of the organisation,, will be divided into smaller
jobs. (division of labour and specialisation)
• The grouping of individual jobs (departmentalisation) depicted on a
chart as a structure = known as an Organisation structure.
• When the different managerial and non-managerial posts are also
depicted on the structure, the structure is called an Organisation and
Staff Establishment structure.
• The size of the group of jobs reporting to each superior must be
determined. (span of control)
• How many levels the organisation will have. (the scalar chain)
• The distribution of authority among the jobs.
 THE PURPOSE OF THE STRUCTURE

• to indicate the positions of the people working in the organisation

• to divide work between all the members in the organisation.

• to define channels of communication, tasks, responsibilities, work

roles and relationships.

• to define how jobs are formally divided, grouped and coordinated.

• to ensure that the objectives of the organisation can be reached

THE OBJECTIVES OF THE ORGANISATION
STRUCTURE ARE TO PROVIDE FOR:

• The economic and efficient performance of the organisation and the

level of resource utilisation
• Monitoring the activities of the organisation
• Accountability for areas of work undertaken by groups and individual
members of the organisation
• Co-ordination of different parts of the organisation and different areas
of work
• Flexibility in order to respond to future demands and developments,
and to adapt to changing environmental influences
• The social satisfaction of members working in the organisation.

(Mullins)
AN ORGANISATION STRUCTURE MUST SATISFY
THREE REQUIREMENTS NAMELY:

• It must be organised for future business

• The structure should contain the least number of

management levels. ( In other words, the structure must be
flat with wide spans of control.

• The structure must make possible the training and testing

of future top management.
(Drucker)
 DIVISION OF LABOUR\WORK

Division of labour is the process of dividing work into

relatively specialised jobs to achieve the advantages of
specialisation.

An advantage of specialisation is that the worker performs

the task successfully because of repetition (Henry Ford –
father of specialisation) workers become experts.

An disadvantage of specialisation is that the workers get

bored easily and are highly stressed and it influence their
productivity negatively.
 DEPARTMENTALISATION

The decisions on how to combine the smaller tasks into

significant groups or departments and of how many jobs
per grouping or department is called departmentalisation
Thus
Departmentalisation is the process in which an
organisation is structurally divided by combining jobs in
departments according to some shared characteristic or
bases.
There are two types of posts or jobs in an organisation.
The one post is a managerial post and the other
production post or worker post.
SOME OF THE MAJOR DEPARTMENTALISATION
BASES ARE THE FOLLOWING:

• Functional departmentalisation
• Territorial departmentalisation
• Product departmentalisation
• Customer departmentalisation
• Departmentalisation according to the nature of
the work performed
• Departmentalisation according to common time
scales
• Combined bases for departmentalisation
 FUNCTIONAL DEPARTMENTALISATION

This is where jobs are combined

according to the functions to be
performed in the organisation.
The functions to be used will be
the functions as determined Figure 2.1: Functional
during the Functional Grouping. Departmentalisation
(Chapter 1) 31 January, 1997

The advantage: whole TO SUPPLY

CLOTHING
department will consist of
experts in specific fields for
example marketing, production,
research and development, etc.
PRODUCTION MARKETING STAFF FUNCTIONS

A disadvantage is that “stove

pipes” are created.
 TERRITORIAL DEPARTMENTALISATION
This is where jobs are grouped
according to territory, location or
geographical area. The result is
decentralisation
Figure 2.2: Territorial
Advantages of this basis of Departmentalisation
31 January, 1997
departmentalisation is that it can
act as a training ground for
managers because they are away
from head office. To supply clothing

A disadvantage of such a
departmentalisation is that Durban Johannesburg Staff functions

authority and becomes difficult

and a bigger administrative staff
is required to keep track of units in
scattered locations.
 PRODUCT DEPARTMENTALISATION

All jobs associated with

producing and delivering a
Figure 2.3: Product
specific product or service Departmentalisation
will be grouped together. 31 January, 1997

To supply clothing

Advantage: all the jobs

associated from inception of
that product or service to
Dresses Shoes Staff functions
the final delivery is now
grouped under one
manager.
Decision making is faster
 CUSTOMER DEPARTMENTALISATION

Like in hospitals where

there are children’s wards Figure 2.4: Customer
and male and female Departmentalisation
31 January, 1997
wards.
Advantage: it helps the
organisation to get to
To supply clothing

know the client well and

to cater for the specific
needs of that client or Men Ladies Staff functions

customer.
 DEPARTMENTALISATION ACCORDING TO THE
NATURE OF THE WORK PERFORMED

Jobs are grouped together

according to some common Figure 2.5:
Departmentalisation
feature of the work, for according to nature of
example, jobs on noisy work
31 January, 1997
machines or in unpleasant
environments.
To supply clothing

Advantage: that the special

feature can be contained in
one unit and the manager of
Cutting Stiching Designing
such a unit can pay special
attention to it.
 DEPARTMENTALISATION ACCORDING TO COMMON
TIME SCALES

Sometimes organisations
Figure 2.6:
will group jobs that are Departmentalisation
performed together for according to common
example where shift work time scales
31 January, 1997
is done in a factory.

To supply clothing
Each shift will be
grouped together with its
own manager in charge of
that particular shift. Shift A Shift B Shift C
COMBINED BASES FOR DEPARTMENTALISATION

Figure 2.8:
Combined bases
31 January, 1997

To supply clothing

Production Marketing Staff functions

Men Ladies Johannesburg Durban

 The Matrix organisation

Figure 2.7: Matrix

Organisation
This grouping attempts to 1 February, 1997

maximise the strengths and

minimise the weaknesses of both
the Functional and Product bases To supply clothing

by super-imposing the product- or

project-based design on the
existing function-based design. Production: Marketing: Staff functions:
Functional Head Functional Head Functional Head
This means that
departmentalisation is based on
function and product. Workers
Project A: Project
work in their functional capacity Head

and as they are needed for a

project they work on the project
and in their function Project A: Project

simultaneously.
Head
 UNIT SIZE

Reflects the number of posts per organisational unit.

Must be done so that a manager does not have too many subordinates
to supervise. (span of control)

This is determined by means of measuring the work to be done. After

work is measured , a standard time for the performance of such a task
is determined.

Based on the standard time and the frequency of the work a specific
formula can be used to calculate the theoretical manning.
 THEORETICAL MANNING

Formula to determine the theoretical manning (number of

posts)

Theoretical Manning = standard time × required

production ÷ available time
 THEORETICAL MANNING (Example)

To calculate the number of packers necessary to pack groceries, the time taken
up for packing can be determined by means of a time study/work sampling =
that it takes 2 minutes to pack a bag of groceries. Further investigation shows
that 300 bags of groceries must be packed per 8 hours day.

Theoretical Manning = standard time × required production ÷

available time
= 2 minutes per bag × 300 bags per day ÷ 480 minutes per day
= 1.250 posts
= 1.3 posts
 SPAN OF CONTROL

Span of control refers to the number of subordinates

under a manager's direct control. As an example, a
manager with five workers that directly reports to him/her
has a span of control of five

It is usually reported as 1:5 (1 manager to 5 subordinates)

 SPAN OF CONTROL

Span of control deals with the concept of how many

subordinates one supervisor can supervise effectively.

The volume of interpersonal relationships that a manager

can handle should be determined because that will have an
effect on the number of subordinates such a manager can
supervise effectively.

This concept will also determine how many levels there

will be in the organisation. The wider the span of control,
the lower the cost for managerial jobs and the flatter the
organisation structure will be
 A flat versus a tall structure
Figure 2.10: A flat versus
a tall structure
31 January, 1997
Name
Title

Name Name
Title Title

Name Name Name Name Name Name Name Name Name Name
Title Title Title Title Title Title Title Title Title Title

An Example of a flat
structure

Name
Title

Name Name
Title Title

Name Name Name Name

Title Title Title Title

Name Name Name Name Name Name Name Name Name Name
Title Title Title Title Title Title Title Title Title Title
An example of a tall structure
 FACTORS/INFLUENCES TO CONSIDER IN DETERMINING
SPAN OF CONTROL
• Required contact between the supervisor and subordinates - If it is
necessary in the job that the manager and the subordinate must, for
the sake of the effective executing of the job, have direct contact,
then the span of control can obvious not be wide.

• The degree of specialisation in the organisation will also contribute to

the decision on span of control - If the job is highly specialised, the
manager will be able to supervise more subordinates.

• The need for the manager to communicate with the subordinates - If

the manager can communicate clearly, concisely and effectively he or
she will be able to supervise more subordinates
 FACTORS/INFLUENCES TO CONSIDER IN DETERMINING SPAN
OF CONTROL (Mullins)

• The nature of the organisation, - complexity of the work, the similarity

of functions, and the range of responsibilities
• The ability and personal qualities of the manager including the
capacity to cope with interruptions
• The amount of time the manager has available from other activities to
spend with subordinates
• The ability and training of subordinate staff, and the extent of
direction and guidance needed
• The effectiveness of co-ordination and the nature of communication
and control systems
• The physical location or geographical spread of subordinates
• The length of the scalar chain
 DELEGATION OF AUTHORITY

Deals with the decision that has to be made in terms of how much
authority each job and jobholder should have.

It is the process of distributing authority downward in the

organisation.

The chain of command clarifies who in the organisation reports to

whom.

Authority refers to the inherent rights that a managerial position has to

enable the manager to meet his responsibilities.
 UNITY OF COMMAND

Unity of command states that a subordinate should only

have one superior to report to.

This principle is to ensure that a subordinate does not have

two supervisors with conflicting demands.
 CENTRALISATION

Centralisation occurs when top management makes all the

decisions and the managers on the lower levels just carry
out the orders of top management.

This means decision making or authority is concentrated at

one point in the organisation.
 ADVANTAGES OF CENTRALISATION ARE THE FOLLOWING:

• The implementation of a common policy is easier

• It prevents sub-units from becoming too independent

• Makes for easier co-ordination and management control

• Improved economies of scale and reduced overhead cost

• There could be a greater use of specialisation that includes better

facilities and equipment

• Improved decision making that would be slower in decentralisation

because of diffused authority and compromise
ADVANTAGES OF DECENTRALISATION ARE THE FOLLOWING:

• It enables decision making to be made closer to the operational level

of work

• Support services, such as administration, are more effective if it is

supplied as near as possible to the activities they must serve

• It provides the opportunity to train managers-to-be

• It usually has an encouraging effect on the morale and motivation of

the staff
ORGANISATION DESIGN
 MECHANISTIC MODEL OF ORGANISATION
DESIGN: EMPHASIS

EMPHASIS is on:

High levels of production and efficiency through:

• High levels of formalization (rules and procedures)

• Inclined to high centralisation and specialisation
• More appropriate in stable conditions/environments
• It is a more rigid structure
 MECHANISTIC MODEL OF ORGANISATION
DESIGN: CHARACTERISTICS

• Specialisation of tasks (formalisation)

• A clear hierarchical structure (formalisation)
• Knowledge centered at the top (centralisation)
• Insistence on loyalty to the organization and obedience to
superiors
• The scalar chain principle where communication must
flow through all the superiors without skipping a level
• Unity of direction which means that jobs are grouped
according to specialty – departmentalisation according to
functions.
 ORGANIC MODEL OF ORGANISATION DESIGN:
EMPHASIS

EMPHASIS is on:
Flexibility and development through:

• Limited use of rules and procedures (less formalisation)

• Favours decentralization (decision making power in the
hands of lower level manager
• Relatively lower levels of specialisation
• More fluid and better suited for changing conditions and
unforeseen circumstances.
 ORGANIC MODEL OF ORGANISATION DESIGN:
CHARACTERISTICS

• Importance and prestige is attached to individual

performance
• Superior knowledge does not necessarily coincide with the
position that the person has in the organisation
• Technical and commercial knowledge is located through the
organisation and not just situated at the top
• There is an increase in job range because specialisation is
not emphasised
• Relatively informal and there is an emphasis on product and
customer basis for departmentalisation – the customer
demands better and faster decision making lower down in
the structure.
 NEWER DESIGN OPTIONS

• The team structure

• The virtual organisation

• The boundary less organisation

• The humanistic organisation

 THE TEAM STRUCTURE

Activities are co-ordinated by teams.

Advantages:
• decision making is decentralised to the level of the team.

• Workers are generalists instead of specialists.

• This structure provides the advantage of standardisation with its

efficiency as well as the flexibility of a team.
 THE VIRTUAL ORGANISATION

Only performs the core business - in other words, what they do best -
themselves.

Other major business functions are outsourced.

This means that there is a high level of decentralisation and very

little departmentalisation.

They outsource everything that is not part of the core business.

The organisation gains flexibility but managers loose control over

key parts of the business
 THE BOUNDARY LESS ORGANISATION
Strives to break down all vertical and horizontal barriers inside the
organisation as well as between the organisation and it’s customers and
suppliers.
Characterised by:
• limitless spans of control,
• empowered teams instead of departments and
• the chain of command would be eliminated.

Advantages :
It breaks down barriers even between countries. This is then a real
global organisation.

It also allows workers to work for an organisation without ever leaving home
(made possible by computers that allows workers to be
connected to their place of work via a communication line).
 THE HUMANISTIC ORGANISATION

According to Robbins (1996:568) these organisations shows the following six

characteristics:

• Members are valued as individual human beings.

• Careers are defined in terms of service to others and not in terms of

promotion, pay increases etc

• Commitment to employee growth by, expanding the skills of their workers

• Creation of a caring community

• Power sharing by means of sharing information & freely participation in

decision making
 THE IMPORTANCE OF GOOD STRUCTURE

A good structure must not only ensure efficiency but also:

• ensure job satisfaction and good morale.

• should allocate responsibilities clearly,
• should facilitate good decision making,
• must group functions correctly and
• facilitate control and rewards.