Organisational Structure

• OBJECTIVES
• Difine an organizing and its purpose
• Identify the six elements of an organization’s structure.
• Understand and differentiate a mechanistic and organic organisation
Purpose of Organising
• Organising is arranging and structuring of work activities to
accomplish organisational goals
• Organising serves a number of purposes in an organisation
Divides work to be done to specific jobs and departments
Assign tasks and responsibility associated with individual jobs
Coordinates diverse organisational tasks
Establishes formal lines of authority
Allocates and deploys organisational resources
Organisational Structure
• It is the formal arrangement of jobs within an organisation; it depicts how
job tasks are formally divided, grouped, and coordinated.
• There are six key elements to consider designing an organisation’s
structure:
1. Work specialization
2. Departmentalization
3. Chain of command
4. Span of control,
5. Centralization and decentralization
6. Formalization.
 Key questions for Proper Designing of an
Organisational Structure
Key question Answers provided
1. To what degree are activities subdivided Specialisation
Work into separate jobs?
2. On what basis will jobs be grouped together? Departmentalisation
3. To whom do individuals and groups report? Chain of command
4. How many individuals can a manager Span of control
efficiently and effectively direct?
5. Where does decision-making authority lie? Centralisation and Decentralisation
6. To what degree will there be rules and Formalisation
regulations to direct employees and
managers?
Work Specialisation
• Work specialization is the division of work activities in an
organisation into separate job tasks.
• The essence of work specialization is that an entire work activity is
not done by one individual, instead work is broken down into
separate tasks each completed by a separate individual.
• This allows individuals to specialize in doing part of an activity rather
than the entire activity.
Benefits and Limitations of Work
Specialisation
• Benefits of specialisation include
• Employees become good at their job
• Leads to quality and excellence
• Productions increase
• Time and cost saving
• Limitations include
• Boredom from repetitive tasks
• Poor quality work
• Limited skill
Departmentalisation
• Once jobs have been divided through work specialization, they must
be grouped so common tasks can be coordinated.
• Departmentalisation is the grouping of common jobs so that work
can be done in a coordinated, integrated way.
• Ways of grouping jobs include;
• Functional departmentalisation- jobs are grouped on the basis of
activity performed
• Product/Services departmentalisation- grouping jobs by product line
offered or services offered
Departmentalisation
• Customer departmentalisation- grouping jobs on the basis of specific
and unique customers who have common needs; it is utilised in
many organisations to carter for the different requirements of
customers.
• Geographical departmentalisation- used for organisations with
nationwide or worldwide markets. For instance a Zambian chain
store may have its domestic sales departmentalized by regions such
as Southern, Lusaka, Copperbelt and Northwest provinces.
• This form is valuable when an organization’s customers are
scattered over a large geographic area and have similar needs based
on their location.
Chain of Command
• It is the line of authority extending from upper organisational levels
to the lowest levels which clarifies who reports to who.
• Depicts the hierarchy of orders/instructions and decisions in an
organisation
• Chain of command helps employees know who to report to when
they have a problem
• Within the chain of command arises three important aspects
1. Authority refers to the rights inherent in a managerial position to
give orders and expect them to be obeyed
Chain of Command
2. Unity of command- an employee should report to only one
manager. Without unit of command, conflicting demands and
priorities from multiple supervisors can create problems
3. Responsibility –refers to employees obligation to perform any
assigned duties
Span of Control
• Span of control defines clearly the number of subordinates who reports to/
controlled by a manager
• A SC is the number of people who report to one manager in a hierarchy.
• This question of span of control is important because it largely determines
the number of levels and managers an organization has.
• The manager with more people under him has a wider span of control and
vice-versa.
• Narrow span of control may have 5-6 people being supervised my a
manager and a wider span of control may 12 to 20 people reporting to one
manager.
Advantages/disadvantages of Narrow Span
of Control
Advantages
• A smaller team is easier to manage/control
• A narrow span of control allows a manager to communicate quickly with
the employees.
• Feedback of ideas from the workers will be more effective.
• Less management skill required.
• Allow for closer supervision of employees
Disadvantages
• Supervisors tend to get too much involved in the works of subordinates
• Costly dues too many levels an organisation need to employ a lot of
managers
Advantages/disadvantages of Wider Span
of Control
Advantages
• It costs less money to run a wider span of control because a business does
not need to employ as many managers
• Makes delegation possible
• Quicker decision making
Disadvantages
• Manager/supervisor has lesser control
• Possible lack of familiarity between the manager and his/her subordinates
• Coordinating of activities may be a challenge
• A burden on the part of managers because of too much workload
 Factors that determine the Size of the Span
of Control
• Skills of managers and workers
• Nature of the work (complex or easy)
• Similarity of work performed by subordinates.
• Preferred style of management
Centralisation and Decentralisation
• Centralisation refers to the degree to which decision making is
concentrated at a single point in the organization.
• In centralised organizations, top managers make all the decisions,
and lower-level managers merely carry out their directives.
• A centralised organisation has a different structure from a
decentralized organisation.
• Decentralisation It is the granting of decision-making authority by
management to lower-level employees
• In a decentralised organisation decision making is pushed down to
the managers closest to the action.
Centralisation and Decentralisation
• A decentralized organization can act more quickly to solve problems,
more people provide input into decisions, and employees are less
likely to feel alienated from those who make decisions that affect
their work lives.
• An organisation is not always centralised or decentralised; it is
usually the combination of the two
Formalisation
• Refers to how standardised organisational jobs are; the extent to which
employees behaviour is guided by rules and procedures
• If a job is highly formalised, an employee doing that job has little discretion
over what to do and when and how to do it.
• Employees can be expected always to handle the same input in exactly the
same way, resulting in a consistent and uniform output.
• There are explicit job descriptions, lots of organisational rules, and clearly
defined procedures covering work processes in organizations in which
there is high formalization.
• Where formalization is low, job behaviors are relatively unstructured, and
employees have a great deal of freedom on how they do their work.
 Common Organisational Design
Mechanistic structure
• Hierarchical in nature
• Rigid and Slow to adaptation to
technological change
• Characterised by high specialisation
• High Centralisation
• Narrow span of control
• Downward communication
• Standardized rules and regulations
• Continued membership requires
loyalty and obedience.
Organic structure
• Highly adaptive and flexible
• Little specialisation
• Decentralisation
• Wide span of control
• Lateral communication
• Flexible rules and regulation
• An organic organization is generally
expected to be faster at reacting to
changes in the environment
Factors that influence the choice of an
organisational structure
• Size of the organisation – the size of the organisation will affect the choice
of an orgasational structure, for instance large organisations like CBU tend
to have more specialised jobs, formalisation, centralisation hence they
tend to lean more towards a mechanistic structure.
• Technology- how quick does the organisation adapt to technological
change? For example, if the rate of change in technology is slow, the most
effective design is mechanistic, if it is faster at reacting to changes in the
technology organic structure is ideal
• Strategy- Because structure is a means to achieve objectives, and
objectives derive from the organization’s overall strategy, it’s only logical
that structure should follow strategy. If management significantly changes
the organization’s strategy the structure must change to accommodate
Factors that influence the choice of an
organisational structure
• Most current strategy frameworks focus on three strategy
dimensions—innovation, cost minimization, and imitation—and the
structural design that works best with each.
• Environmental uncertainty- the greater the uncertainty the more an
organisation needs a flexible structure (organic). However if the
environment is stable, mechanistic structure tends to be more
effective.
Job Design
• Job design is the determination of an employee’s work-related
responsibilities.
• It is a way organisation define and structure jobs
• Properly designed jobs can have a positive impact on motivation,
performance and job satisfaction
Methods of Job Design
• A job can be designed in the following ways.
• Job simplification: reduction of the tasks each worker performs.
• May lead to boredom.
• Job enlargement: increase tasks for a given job to reduce boredom.
• Job rotation -broadens one’s view of different tasks
• Job enrichment: increases the degree of responsibility a worker has
over a job.
• can lead to increased worker involvement
Job Characteristics
A Job has five characteristics/dimensions
• Skill variety is the degree to which a job requires a variety of different activities
so the worker can use a number of different skills and talent.
• Task identity is the degree to which a job requires completion of a whole and
identifiable piece of work. E.g. cabinetmaker who designs a piece of furniture,
selects the wood, builds the object, and finishes it to perfection has a job that
scores high on task identity.
• Task significance is the degree to which a job affects the lives or work of other
people.
• Autonomy is the degree to which a job provides the worker freedom,
independence, and discretion in scheduling work and determining the
procedures in carrying it out.
• Feedback is the degree to which worker gets direct information about how well
the job is done.
END