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Redeveloped Division Initiated Self-Learning Module

Department of Education
i – Division of Palawan
 Organization and
Management 11
Analyze the nature of
First Quarter organizations and types of
Week 7 organization structures

MELC: Analyze the nature of organizations and types of organization

structures (ABM_AOM11-Ih-j-15-16)

Objective/s:
1. To discuss the concepts of organizations.
2. To distinguish the various types of organizational structures.
3. To apply the concepts of organizing in analyzing the nature
and structure of an organization.

What I Know

Directions: Read the questions carefully, select the correct answer and write it
on a separate sheet of paper.

1. It is the process that creates the structure of working relationships among

employees to efficiently and effectively achieve organizational goals.
a. Organization c. Staffing
b. Planning d. Organizing

2. Which of the following pertains to a workplace for people working together

to achieve a common purpose?
a. Organization c. Organizing
b. Organizational Process d. Organizational structure

3. Which of the following relationship does NOT appear on the organizational

chart?
a. Formal relationships c. Informal relationships
b. Structured relationships d. Organizational chart

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4. Which of the following is concerned with answering questions such as “Who
reports to whom?”, “Who does what?” and “Where is the work done?”
a. Organizing c. Organization
b. Organizational structure d. Organizational process

5. The organization is also known as what?

a. Organization c. Bank input
b. Output d. Enterprise

6. Which of the following is NOT a factor affecting departmentalization?

a. Task c. Customer
b. Product d. Nature

7. Which of the following is best for firms that produce only one or two
products, especially if managers communicate across functions?
a. Functional departmentalization c. Product departmentalization
b. Geographical departmentalization d. Customer departmentalization

8. It pertains to establishing the organization’s department based on the type

of customers they interact with.
a. Product departmentalization c. Customer departmentalization
b. Process departmentalization d. Functional departmentalization

9. This organizational structure works very well for small businesses in which
each department can support itself by relying on the talent and
knowledge of its workers.
a. Divisional organization c. Matrix organization
b. Functional organization d. Network organization

10. It defines the line of authority within the organization as links and reminders
of who the authority is.
a. Chain of command c. Authority
b. Span of management d. Division of labor

11. It pertains to empowering the lower levels of the organization by permitting

them to make critical decisions.
a. Assignment of duties c. Grant of authority
b. Centralization d. Decentralization

12. Which of the following is being done when tasks are divided and grouped
according to specialization?
a. Differentiation c. Integration
b. Standardization d. Delegation

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13. It pertains to the need to report and justify results or task outcomes to those
higher than them in the chain of command.
a. Responsibility c. Accountability
b. Delegation d. Authority

14. Which type of authority do managers over subordinates exercise a formal

authority.
a. Line authority c. Direct authority
b. Staff authority d. Downward authority

15. It refers to the number of employees that are under the supervisor’s
jurisdiction.
a. Scalar relationship c. Division of labor
b. Chain of command d. Span of authority

What is It

A manager designs and maintains a system of roles within which people

in the organization can work together to implement the strategic plan. Through
an organizational structure, employees can perform their work efficiently and
effectively. He identifies the responsibilities of each one’s job position and
relationship to these positions. In short, the manager organizes.
Organizing contains deploying organizational resources in an orderly
manner to achieve organizational goals. It focuses on identifying the
responsibilities of employees and how the performance of these roles should
be coordinated and combined to advance the attainment of organizational
objectives. An organizational structure is created in the process of organizing.
It is a tool that a manager uses to harness resources while getting things done.
This module looks at the way an organization uses fundamental
concepts of organizing. There are many ways to organize since there is a
variety of organizing principles and concepts a manager uses. The way
managers design their structure according to its unique situation will be
discussed. This chapter also looks into how authority and responsibility are
defined, promoted accountability, and improved coordination for

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organizational success. It concludes a variety of ways by which an
organization can be structured to be responsive to change.
Nature of Organization
Organizing is the process that creates the structure of working
relationships among employees for the efficient and effective achievement of
organizational goals. It takes place in and for an organization based on the
goals, major tasks, and obligations to perform in the organizing process and its
influence through a line of authority and responsibility that allows employees
to carry out their tasks.

Organizations, also known as enterprises, are open and social systems

that transform input from the environment to product outputs. It is a workplace
for people working together to achieve a common purpose. It is a structure of
roles that are defined such that activities to accomplish the common purpose
is done efficiently and effectively.

Types of relationships inside an organization

1. Formal Relationships – is based on a structure of roles that aims to achieve
organizational goals consciously and deliberately. It performs tasks to
accomplish the common purpose as mandated by the management
decree.
2. Informal Relationships – is among people that extend beyond those
relationships established by management. It does not appear on the
organizational chart.

Staffing versus Organizing?

In organizing, a manager decides what job will have to be filled and
what the people who hold them must do. While in staffing, the manager
attempts to find, train and develop the right people for each job. It intends to
provide the organization with the right people in the right jobs.

Organizational Structure versus Organizational Process

Organizational structure is the vertical and horizontal configuration of
departments, authority, and jobs within a company. It is concerned with
questions: “Who reports to whom?”, “Who does what?” and “Where is the work
done?” It results from organizing a system of tasks and reporting relationships
that ensure effective coordination of tasks among individuals and
departments.
The organizational process is the collection of activities that transform
inputs into outputs that customers value. It asks, “How do things get done?”

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Departmentalization is the act by which tasks and responsibilities are assigned
to departments. It is based on any of the following factors: Task, Product,
Territory, Customer, or Process. And it establishes departments as a way to
institute formal relationships among people and resources in an organization.
The characteristics of the business determine the best way to departmentalize.

Types of Departmentalization
1. Functional Departmentalization – is an establishment of a department
based on tasks. They are grouped because of similar skills or knowledge to
carry out tasks. This is best for firms that produce only one or two products,
especially if managers communicate across functions.
2. Geographical Departmentalization – is an establishment of a department
based on territory. This type works best for firms with different locations.
3. Product Departmentalization – is an establishment of a department based
on the product line. This would be inefficient and high-cost for small or
medium firms and best for large firms because it shows the product line to
be expanded.
4. Process Departmentalization – an establishment of a department anchored
on customer or product flow. This type works best for firms with different
locations.
5. Customer Departmentalization – an establishment of a department base
on the type of customers they interact with, which can be further grouped
according to their specialized needs. This type works best for firms with
different locations.

Types of Organizational Structure

1. Functional Organization. It is a setup wherein each department of the
organization is grouped according to its function or purpose. This type of
chart shows a functional organization where the jobs are grouped in
departments with the specified skills and business functions. The functional
structure works very well for small businesses in which each department can
support itself by relying on the talent and knowledge of its workers.
However, one of the drawbacks of a functional structure is the restriction in
coordination and communication between and among other
departments by the organization's boundaries. The various departments
work separately and independently.

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 Samples of Chart of Functional Organization

Principal

Instruction Administration

Teachers Administrative Staff

President

Human
Operations Marketing Finance
resources

2. Divisional Organization, when the products, customers, and geographical

locations of an enterprise grow and continue to diversify, a functional
structure may not serve its developmental need. In this divisional
organization, the enterprise is grouped into products, customers, or
geographical locations, maybe a better structure. Typically, it is used in
larger companies or organizations with several branches or outlets that
operate in a wide geographic area or have separate smaller organizations
within the umbrella group to cover different types of products or market
areas.
Types/Focus Examples
Product
 Good or service produces

Geographical
 Location of activity

Customer
 Customer or client services

Process
 Component activities

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 Sample of Chart of Divisional Organization

Regional Director

Schools Division Schools Division Schools Division

Superintendent – SDO Superintendent – SDO Superintendent – SDO
Palawan Romblon Calapan

Assistant SDS Assistant SDS Assistant SDS

Teaching and non- Teaching and non- Teaching and non-

teaching Personnel teaching Personnel teaching Personnel

3. Matrix Organization, a dual reporting relationship occurs in matrix

organizations, as the manager reports to both a functional head and a
product executive. Matrix structure is a hybrid functional and divisional
structure. The matrix organization utilizes the advantages and needs of the
functional and divisional organizations. However, this can create a power
struggle because most areas of the company will have dual management.
Unlike other structures, it does not follow the traditional hierarchical model;
instead, all employees have dual reporting relationships.

Sample of Chart of Matrix Organization Principal

SPS/SPA STE Gen Sec Cur

Head Teacher Coordinator Coordinator Chair
- Math Math Teacher Math Teacher Math Teacher

Head Teacher
Science Science Science
- Science
Teacher Teacher Teacher

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4. A network organization is a collection of independent, mostly single-
function enterprises collaborating on a good or service. The key to the
network organization is electronic communication, where information is
shared with member enterprises with distinct competencies.
5.
Sample of Chart of Network Organization

Tourism
Industry

Hotel Travel & Tours Restaurant

Organizational Structure and coordination Mechanisms

1. Division of labor – the extent to which tasks are classified according to

specialization. Through this, the worker's skill is increased, time is maximized,
and tasks are performed more easily and efficiently.
2. A Span of Management – refers to the number of employees that are under
the supervisor’s jurisdiction. This number should be limited to the extent a
manager can exercise effective supervision.
3. Chain of commands or scalar relationships – refers to the positioning of
individuals within the organizational structure such as job position, lines of
authority, and ones responsible for various tasks. It defines the line of
authority within the organization as links and reminders of who is the
authority.

Authority – is the right to perform or command. A manager exercises it over

those who report to him to get things done. Authority is exercised with
responsibility.
Types of authority:
1. Line Authority – it is the formal authority exercised by managers over
subordinates.
2. Staff authority – consists of the right authority to advise those in line
according to one’s area of expertise.

Responsibility – refers to the structure of roles that are defined, such as activities
of one’s task.

Accountability – refers to the need to report and justify results or task outcomes
to those higher than them in the chain of command.

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Delegation – The process of assigning tasks and authority to specific individuals
in the organization. Delegation of Authority is the assignment of direct authority
and responsibility to a subordinate to complete tasks for which the manager is
normally responsible. Delegation is an administrative process of getting things
done by others by giving them responsibility.

Elements of Delegation:

1. Assignment of duties is best done by entrusting employees with completing

whole tasks whenever possible.
2. Grant of Authority– means allowing employees to access all and little
authority resources necessary to complete the task.
3. Creation of obligation – is done by explaining the relevance of the
delegated tasks to the overall goal. Delegation practices obligation in
various degrees such as:
a. Decentralization – it happens when the manager delegates many
tasks and authority to his subordinates. It also pertains to empowering
the lower levels of the organization by permitting them to make critical
decisions.
b. Centralization – when the manager delegates a few tasks and little
authority to his subordinates. The location of most authority at the
upper levels of the organization.

Standardization is solving problems by consistently applying the same rules,

procedures, and processes.

Differentiation means that the enterprise is involved in many tasks with diverse
skills and methods. The tasks have to be divided, and groups specialized in
parts of the larger task.

Integration is achieved with coordination, communication, and collaboration,

as it involves linking parts of the enterprise into a whole

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 What I Can Do
Activity 1. Groufie
Directions: Group the terms found below according to the nature of
organizations. You can only use the given terms once.

Division of labor Formal relationship Authority

Standardization Functional Informal relationship
Divisional Centralization Networks Matrix

Relationship Mechanisms Structure

_______________________ _______________________ _______________________

_______________________ _______________________ _______________________
_______________________ _______________________ _______________________
_______________________ _______________________ _______________________
_______________________ _______________________ _______________________

Activity 2: Redrawing
Directions: Below is an organizational chart. Identify the errors in it and redraw
the correct one. Explain the changes you made.

Unit Head

Executive Assistant Program Manager

Program Analyst Program Assistant

Rubrics for rating Activity 2

Points Standards
3 Errors are identified correctly, and the explanation of the changes
made are clear
2 Error is identified, but changes are incorrect
1 Error and changes made are both incorrect.

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 Assessment

Directions: Choose the letter of the best answer and write it on your answer
sheet.
1. It is a workplace for people working together to achieve a common
purpose.
a. Organization c. Organizing
b. Organizational Plan d. Organizational Structure

2. Which of the following is the process that creates the structure of working
relationships among employees for the efficient and effective achievement
of organizational goals?
a. Organization c. Organizing
b. Organizational Plan d. Organizational Structure

3. It is where the manager attempts to find, train and develop the right people
for each job.
a. Staffing c. Organizing
b. Planning d. Organization

4. It is the act by which tasks and responsibilities are assigned to departments.

a. Organizing c. Staffing
b. Departmentalization d. Delegation

5. This type of departmentalization works best for firms with different locations.
a. Product Departmentalization
b. Process Departmentalization
c. Functional Departmentalization
d. Geographical Departmentalization

6. Employees within this hierarchy system who demonstrate high levels of

productivity often receive promotions to other positions.
a. Divisional organization c. Matrix organization
b. Network organization d. Functional organization

7. Which of the following organizational structures requires electronic contact

between member firms with different competencies?
a. Divisional organization c. Matrix organization
b. Functional organization d. Network organization

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8. Which of the following defines the organization's line of authority as links and
reminders of who is in charge?
a. Chain of commands c. Span of Management
b. Division of labor d. Organizational structure

9. It is characterized by assigning duties, tasks, and responsibilities to an

individual within an organization.
a. Accountability c. Delegation
b. Authority d. Responsibility

10. What happens when the manager delegates many tasks and authority to
his subordinates?
a. Centralization c. Delegation
b. Decentralization d. Standardization

11. Which of the following ensures that certain goods or performances are
produced in the same way via set guidelines?
a. Decentralization c. Differentiation
b. Delegation d. Standardization

12. A manager coordinated, communicated, and collaborated with all the

company members to link them all and achieve organizational success.
What does the manager perform?
a. Delegation c. Integration
b. Differentiation d. Standardization

13. Which of the following increases the worker's expertise, maximizes time, and
completes activities more readily and efficiently?
a. Division of labor c. Span of management
b. Scalar relationships d. Standardization

14. Which of the following organizational structures allows cross-collaboration

between employees and departments who do not always have the
opportunity to collaborate?
a. Divisional organization c. Matrix organization
b. Functional organization d. Network organization

15. Which organizational structure applies to every organization that splits its
personnel and other resources into different groups based on regional and
product variances, with each group liable and accountable for its actions?
a. Divisional organization c. Matrix organization
b. Functional organization d. Network organization

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