Chapter 4:

Organizing
1. Nature of organizations
2. Types of organization structures
3. Organization theories and application

MRS. JANNETH M. BARRERA, LPT

Learning Objectives:
a.) discuss the nature of
organizations;

b.) distinguish the various types of

organization structures; and

c.) apply organization theories in solving

business cases.
 Organization vs Organizing
Organization- is collection of people working together under a
division of labor and a hierarchy of authority to achieve a
common goal.

Organizing- refers to put constant relationships between

different jobs, that foster cooperation between individuals and
groups inside the organization in order to achieve the common
goals and objectives of the organization.
 Lesson 1: Nature of An Organization
• DIVISION OF LABOR
- involves assigning different tasks to different people
in the organization’s different work units.

• SPECIALIZATION
- is the process in which different individuals and units
perform different tasks.
• INTEGRATION
- is another process in the organization’s internal environment
which involves the collaboration and coordination of its
different work units or work divisions.

• COORDINATION
refers to the procedures that connect the work activities of the
different work divisions/units of the firm in order to achieve its
overall goal.
 Lesson 2: Type of An Organization
FORMAL ORGANIZATION
• A structure of well defined jobs each bearing a measure
of authority and responsibility

INFORMAL ORGANIZATION
• a network of personal and social relationships.
ORGANIZATION STRUCTURE
• is a system made up of tasks to be accomplished,
work movements from one work level to other work
levels in the system.

3 Types of Organization Structure:

a) Vertical Structure c) Network
b) Horizontal Structure Structure
 3 TYPES OF ORGANIZATION STRUCTURE

1. Vertical Structure
• Bateman and Snell(2008), a vertical structure clears
out issues related to authority rights, responsibilities,
and reporting relationships
1. Vertical Structure
 3 TYPES OF ORGANIZATION STRUCTURE

2. Horizontal Structure
• refers to the departmentalization of an organization
into smaller work units as tasks become increasingly
varied and numerous.
2. Horizontal Structure
 In terms of Decision-Making
• In a vertical org chart, a decision is made by the top
management and descended down to employees
through the hierarchy.
• Employees are required to follow orders and
guidance from their upper level in order to complete
the tasks.
 In terms of Decision-Making
• In horizontal org chart, employees can make a
decision by themselves for daily operation and only
have to ask for instructions when it comes to very
important issues.

• In most cases, staffers are not driven by their

manager’s command, but instead the company’s
goal.
 In terms of Collaboration
• In vertical org charts, since the decision is made by
the upper level and flows down to employees,
collaboration can only occur on some formal
occasions like a meeting.
• In horizontal org charts, employees have rights to
make a decision during the daily operation, therefore,
collaboration tends to happen more organically.
 3 TYPES OF ORGANIZATION STRUCTURE

3. Network Structure
• is a collection of independent, usually single function
organizations/companies that work together in order
to produce a product or service.
3. Network Structure
THANK
YOU