Lesson 1 Nature of An Organization

Differentiation in an organizations involves division of labor and specialization (Bateman and Snell,2008).
These necessarily result from the organizations composition-many different units with different kinds of
tasks, using different skills and work activities coordinating with one another for a common end.

Division of Labor –involves assigning different tasks to different people in the

organization’s different work units.

Specialization- is the process in which different individuals and units perform

different tasks.

Lesson 2 Type of An Organization

An organization structure is a system made up of tasks to be accomplished,

work movements from one work level to other work levels in the system. There are

three types of organizational structure. These are;

a. Vertical Structure

b. Horizontal Structure

c. Network Structure

A. Vertical Structure
Bateman and Snell(2008), a vertical structure clears out issues related to authority rights,
responsibilities, and reporting relationships Authority rights refer to the legitimate rights of individuals,
appointed in positions like president, vice president, manager, and the like to give orders to their
subordinates, who in turn, report to them what they have done.

B. Horizontal Structure

Horizontal structure- refers to the departmentalization of an organization into smaller work units as
tasks become increasingly varied and numerous.

Types of Department

Line departments – deal directly with the firm’s primary goods and services responsible for
manufacturing, selling and providing services to clients.

Staff departments- support the activities of the line departments by doing research, attending to legal
matters, performing public relations duties, etc.

Functional approach – where the subdivisions are formed based on management and, and human
resources management.

Divisional approach – where departments are formed based on management of their products,
customers, or geographic covered.

Matrix approach – Is a hybrid form of departmentalization where managers and staff personnel report
to the superiors, the functional manager, and the divisional manager.

C. Network Structure
Network Structure is a collection of independent, usually single function organizations/companies that
work together in order to produce a product or service.