Session 3

Structural Design for Organizations

Key Components or elements of Organization structure

1. Designates formal reporting relationships- no. of levels of hierarchy,span of control of
managers & supervisors
2. Identifies the grouping together of individuals into departments and dept. Intototal
organizations
3. It includes design of systems for effective communication, coordination and integration
1&2 are structural framework- vertical hierarchy and 3 is interaction among
organizational employees
An ideal structure encourages employees to provide horizontal info and coordination
when needed.

Organizational chart -​ visual representation of a whole set of underlying activities and

processes in the org. It shows how the company works, interrelationships and how each
dept. fits into the whole picture.

Information sharing Perspective on structure

Org. should be designed to provide both vertical and horizontal info flow as necessary
to achieve goals.
Vertical linkages are designed primarily for control , horizontal for collaboration and
coordination, usually means reducing control
Traditional organization- emphasis on vertical communication, designed for efficiency
Contemporary organization- horizontal communication, designed for learning and
adaptation
Emphasis on efficiency and control is associated with specialized tasks , hierarchy of
authority , rules and regulations, formal reporting system , few teams and task forces ,
centralized decision making , problems are funneled to top levels of the hierarchy.
Emphasis on learning and adaptation is associated with shared tasks , relaxed hierarchy
, fewer rules, f2f communication, many teams and task forces , informal, decentralized
decision making , authority pushed down to lower levels of organization.
Organizations can choose to orient toward any type of organization and may have to
experiment to find the correct degree of centralization and decentralization to meet their
needs.

Vertical info sharing-​ vertical linkages are used to coordinate activities between top and
bottom of organization and are designed primarily for control . Hierarchy or chain of
command is the first vertical device , if you are unable to solve a problem it can be
referred up to the next level of hierarchy and the solution is passed to lower levels.Use of
Rules and plans is the next linkage device- to the extent that problems and decisions are
repetitious , a rude or procedure can be established so employees know how to respond
without communicating directly with their manager (SOP). Vertical info system is a
strategy for increasing vertical info capacity - it includes periodic reports, written info,
computer based communication distributed to managers. It makes communication up
and down the hierarchy more efficient.

Horizontal info sharing- ​horizontal linkages refers to communication and communication

horizontally across organizational departments. Devices that are structural alternatives
that can improve horizontal coordination and info flow are:
1- info systems- cross functional info systems are a significant method of providing
horizontal linkage. Computerized info sys enable managers or frontline workers to
routinely exchange info about problems , opportunities, activities or decisions . Some
organizations encourage employees to use company’s info systems to build
relationships all across the organization.
2- Liaison roles- a liaison person is located in one dept but has the responsibility for
communicating and achieving coordination with another department. Eg between
engineering and manufacturing dept
3- Task forces- it is a temporary committee composed of representatives from each or
organizational unit affected by a problem.
4- full time integrator- create a full time position or dept solely for the purpose of
coordination, the integrator does not report to one of the functional depts being
coordinated . They have a lot of responsibility but little authority
5- Teams- Project teams tend to be the strongest horizontal linkage mechanism. They
are permanent task forces and are often used in conjunction with a full time integrator.
When activities among departments require strong coordination over a long period of
time, a cross functional team is often the solution.
A virtual team is one that is made up of organizational;ly or geographically dispersed
members who are linked through advanced info and communication techs

Relational Coordination- is the highest level of horizontal coordination , refers to frequent

, timely , problem solving communication carried out through relationships of shared
goals, shared knowledge and mutual respect. It is part of the fabric of the culture of an
organization . Coordination is carried out through a web of ongoing positive relationships
rather than because of formal coordination roles or mechanisms.

Organization Design Alternatives

The overall design of organizational structure indicates 3 things- required work activities,
reporting relationships , departmental groupings.

Required work activities - depts created to perform tasks considered strategically

important.
Reporting Relationships- chain of command- represented by vertical lines on an
organization chart- unbroken line of authority that links all persons in an organization and
shows who will report to whom.