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Explain the basic characteristics of organizational structure revealed in an organizational chart. Describe what is meant by organizational structure and how it is revealed by an organizational chart. Describe different approaches to departmentalization. Distinguish between classical and neoclassical approaches to organizational design and between mechanistic organizations and organic organizations, as described by the contingency approach to organizational design. Describe the five organizational forms identified by Mintzberg. Characterize two forms of interorganizational design.

1. Organization A group of people or employee who are working and sharing a common goal 2. Organization Structure The formal frameworks, by which tasks are divided, grouped and coordinated and link together 3. Organization Design A process of developing or changing an organizations structure to accomplish goal Configuration of design concepts that adapt with environment, strategy, technology, size and life cycle stage

4. Factor of organization structure Although many things can affect the choice of an appropriate structure for an organization, the following five factors are the most common: size The larger an organization becomes, the more complicated its structure. life cycle Organizations, like humans, tend to progress through stages known as a life cycle. Like humans, most organizations go through the following four stages: birth, youth, midlife, and maturity. Each stage has characteristics that have implications for the structure of the firm.

- Strategy How an organization is going to position itself in the market in terms of its product is considered its strategy. A company may decide to be always the first on the market with the newest and best product (differentiation strategy), or it may decide that it will produce a product already on the market more efficiently and more cost effectively (cost-leadership strategy). - Environment The environment is the world in which the organization operates, and includes conditions that influence the organization such as economic, social-cultural, legal-political, technological, and natural environment conditions

- Technology Advances in technology are the most frequent cause of change in organizations since they generally result in greater efficiency and lower costs for the firm. Technology is the way tasks are accomplished using tools, equipment, techniques, and human know-how.

- Defines how job tasks are formally divided, grouped, and coordinated. - There are six key elements that managers need to address when they design their organizations structure

- Work specialization or division of labor to describe the degree to which activities in the organization are subdivided into separate jobs. The essence of work specialization is that rather than an entire job being done by one individual. - Example: Every Ford worker was assigned a specific, repetitive task. One person would just put on the right-front wheel, and someone else would install the right-front door.

- Departmentalization by function can be used in all types of organizations. A hospital might have departments devoted to research, patient care, accounting and so forth. - The major advantage to this type of grouping is obtaining efficiencies from putting like specialists together.

- Chain of command Is an unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. Authority and unity of command. - Authority refers to the right inherent in a managerial position to give orders and expect the orders to be obeyed. - The unity-of-command principle helps preserve the concept of an unbroken line of authority


- The number of subordinates a manager can efficiently and effectively direct. - It determines the number of levels and managers an organization has. All things being equal, the wider or larger the span, the more efficient the organization.


- The term centralization refers to the degree to which decision making is concentrated at a single point in the organization. The concept includes only formal authority that is, the rights inherent in ones position. - In a decentralized organization, action can be taken more quickly to solve problems, more people provide input into decision and employees are less likely to feel alienated from those who make the decision that affect their work lives.


- Formalization refers to the degree to which jobs within the organization are standardized, if a job is highly formalized, then the job incumbent has a minimum amount of discretion over what is to be done, when it is to be done and how it is to be done. - The degree of formalization can vary widely between organizations and within organizations. Certain jobs for instance are well known to have little formalization. College book travelers the representatives of publishers who call on professors to inform them of their companys new publications-have a great deal of freedom in their jobs.


Organizational Structure: The formal Structure configuration between individuals and groups with respect to the allocation of tasks, responsibilities, and authorities within organizations. Organizational Chart: A diagram Chart representing the connections between the various departments within an organization: a graphic representation of organizational design.


Hierarchy of Authority: A configuration Authority of the reporting relationships within organizations; that is, who reports to whom. Division of Labor: The process of Labor dividing the many tasks performed within an organization into specialized jobs. Span of Control: The number of Control subordinates in an organization who are supervised by an individual manager.

Line Positions: Positions in organizations in Positions which people can make decisions related to doing its basic work. Staff Positions: Positions in organizations in Positions which people make recommendations to others but who are not themselves involved in making decisions concerning the organizations day-today operations. Decentralization: The extent to which authority Decentralization and decision making are spread throughout all levels of an organization rather than being reserved exclusively for top management (centralization).


The process of breaking up organizations into coherent units. Functional Organization: The type of Organization departmentalization based on the activities or functions performed (e.g., sales, finance). Product Organization: The type of Organization departmentalization based on the products (or product lines) produced. Matrix Organization: The type of Organization departmentalization in which a product or project form is superimposed on a functional form.





process of coordinating the structural elements of an organization in the most appropriate manner. Approaches include

Classical and Neoclassical Approaches The Contingency Approach Mintzbergs Framework The Boundaryless Organization

Classical Organizational Theory: The approach that

assumes that there is a single best way to design organizations.
This approach assumes that managers need to have close

control over their subordinates and calls for designing organizations with tall hierarchies and a narrow span of control.

Neoclassical Organizational Theory: An attempt to

improve on the classical organizational theory that argues that not only economic effectiveness, but also employee satisfaction, should be goals of an industrial organization.
This approach assumes that managers do not have to

carefully monitor their subordinates and calls for designing organizations with flat hierarchies and a wide span of control.



The contemporary approach that recognizes that no one approach to organizational design is best, but that the best design is the one that best fits with the existing environmental conditions. Mechanistic Organization: An internal Organization organizational structure in which people perform specialized jobs, many rigid rules are imposed, and authority is vested in a few topranking officials. Organic Organization: An internal Organization organizational structure in which jobs tend to be very general, there are few rules, and decisions can be made by lower-level




Mintzberg claims that organizations are composed of five basic elements, or groups of individuals, any of which may predominate in an organization. The element that predominates will determine the most effective design in that situation.


Operating Core: Employees who perform the Core basic work related to an organizations product or service. Strategic Apex: Top-level executives Apex responsible for running an entire organization. Middle Line: Managers who transfer information Line between higher and lower levels of the organizational hierarchy. Technostructure: Organizational specialists Technostructure responsible for standardizing various aspects of an organizations activities. Support Staff: Individuals who provide indirect Staff support services to an organization.

Simple Structure: An organization characterized Structure as being small and informal, with a single powerful individual, often the founding entrepreneur, who is in charge of everything. Machine Bureaucracy: An organizational form in Bureaucracy which work is highly specialized, decision making is concentrated at the top, and the work environment is not prone to change (e.g., a government office). Professional Bureaucracy: Organizations (e.g., Bureaucracy hospitals and universities) in which there are lots of rules to follow, but employees are highly skilled and free to make decisions on their own.

Divisional Structure: The form used by many Structure large organizations, in which separate autonomous units are created to deal with entire product lines, freeing top management to focus on large-scale, strategic decisions. Adhocracy: A highly informal, organic Adhocracy organization in which specialists work in teams, coordinating with each other on various projects (e.g., many software development companies).



An organization in which chains of command are eliminated, spans of control are unlimited, and rigid departments give way to empowered teams. Modular Organization: An organization that Organization surrounds itself by a network of other organizations to which it regularly outsources noncore functions. Virtual Organization: A highly flexible, Organization temporary organization formed by a group of companies that join forces to exploit a specific opportunity. Affiliate Networks: Satellite organizations Networks



Organizational designs in which two or more organizations come together. Conglomerates: A form of organizational Conglomerates diversification in which an organization (usually a very large, multinational one) adds an entirely unrelated business or product to its organizational design. Strategic Alliance: A type of Alliance interorganizational design in which two or more separate companies combine forces to develop and operate a specific business.

1. How to achieve a good design for organization Clarifies relationships, information flows, and work flows Little duplication of effort: efficiency Neither over-control nor under-control of activities and information Focuses concerted effort on most important goals and market domains


2. An important application for organization Selection In organization, Manager sometime maybe changes their decision of selection any individual person to perform or do any task, Therefore, manager should have an exactly selection and minimum change. Performance Appraisal Performance appraisal is very important for every organizations, because it is justification of an individual employee based on performance, therefore an evaluation of an individual judgment of manager should not distortion and bias