MBA 501 Some Purposes of Organizing

Principles of Management &

Organizational Behavior
w Divides work to be done into specific jobs and departments.
[Chapter 06] w Assigns tasks and responsibilities associated with individual
jobs.
w Coordinates diverse organizational tasks.
Hanif Mahtab
w Clusters jobs into units.
email: hanif@iub.edu.bd
w Establishes relationships among individuals, groups, and
departments.
w Establishes formal lines of authority.
w Allocates and deploys organizational resources.
Source: Robbins, S. P. & Coulter, M. (2009) Management (10th Edition), Prentice-Hall, Inc.

Organization Design and Economies and Diseconomies of

Structure Work Specialization
w Organizing
n It is the management function that creates the
organization’s structure.
w Organization design
n A process in which managers develop or change their
organization’s structure
w Work specialization
n A component of organization structure that involves
having each discrete step of a job done by a different
individual rather than having one individual do the whole
job

1
 Organizational Structure: Contrasting Spans of Control
Control
w Chain of command
n The management principle that no person should report
to more than one boss
w Span of control
n The number of subordinates a manager can direct
efficiently and effectively
l Influenced by: similarity and complexity of employee tasks,
proximity of employees, presence of standardized procedures,
capabilities of the information management system, strength of
the firm’s value system, and preferred style of management.

Organizational Structure: Types of Organizational

Control (cont’d) Authority
w Authority w Line authority
n The rights inherent in a managerial position to n The position authority (given and defined by the
give orders and expect them to be obeyed organization) that entitles a manager to direct the
w Power work of operative employees
n An individual’s capacity to influence decisions w Staff authority
• Responsibility n Positions that have some authority (e.g.,
organization policy enforcement) but that are
n An obligation to perform assigned activities
created to support, assist, and advise the holders
of line authority

2
 Chain of Command Line Versus Staff Authority

Authority Versus Power Types of Power

3
 Centralization And Types of Departmentalization
Decentralization
w Centralization
n A function of how much decision-making
authority is pushed down to lower levels in an
organization; the more centralized an
organization, the higher the level at which
decisions are made
w Decentralization
n The pushing down of decision-making authority
to the lowest levels of an organization

Five Common Forms of Five Common Forms of

Departmentalization Departmentalization (cont.)

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 Five Common Forms of Five Common Forms of
Departmentalization (cont.) Departmentalization (cont.)

Mechanistic and Organic Mechanistic versus Organic

Organizations Organizations

w Mechanistic organization
n The bureaucracy; a structure that is high in
specialization, formalization, and centralization
w Organic organization
n An adhocracy; a structure that is low in
specialization, formalization, and centralization

Structure follows strategy

5
Technology and Structure Organization Design
Applications
w Simple structure
n An organization that is low in specialization and
formalization but high in centralization
w Functional structure
n An organization in which similar and related
occupational specialties are grouped together
w Divisional structure
n An organization made up of self-contained units

Bureaucracy and Functional

Structure Divisional Structure

6
 Other Organizational Structures
w Matrix structure
n An organization in which specialists from functional
departments are assigned to work on one or more
projects led by a project manager
Other Organizational Structures
w Team-based structure
n An organization that consists entirely of work
groups or teams
w Boundaryless organization
n An organization that is not defined or limited by
boundaries or categories imposed by traditional
structures

Other Organizational Structures Learning Organization

w An organization that has developed the

capacity to continuously adapt and change
because all members take an active role in
identifying and resolving work-related
issues.
n Organization design
n Information sharing
n Leadership
n Organizational culture

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Characteristics of a Learning
Organization