DESIGNING ORGANIZATIONAL

STRUCTURES
UNIT – II
 Organizing and Organization
Organizing is a process of
(a) determining, grouping and structuring the
activities;
(b) creating roles for effective performance at work;
(c) allocating necessary authority and responsibility
for results; and
(d) determining detailed procedures and systems
for different problem areas such as coordination,
communication, decision-making, motivation,
conflict resolution etc.
The ultimate result of organizing is an organization.
 Organizations may be
formal, informal or both.
• A formal organization is a structure of
relationships which enables persons in official
capacity
• (a) are able to communicate with one
another;
• (b) are willing to act in an atmosphere of
cooperation; and
• (c) share a common explicit performance.
• An informal organization is a network of
relationships, which develop because of
common interests existing among the
members but not because of any official
proclamation.
 BASIC CONCEPTS RELATED TO
ORGANIZATION
• Organizational hierarchy
• Authority and Responsibility
• Delegation of Authority
• Centralisation/Decentralisation
• Span of Control
 In order to effectively delegate work,
some guidelines should be followed:
• Determine what each worker can most effectively
accomplish;
• decide whether the worker should just identify a problem
or also propose a solution;
• consider whether the person can handle the challenge of
the task;
• be clear in the objectives of the task;
• encourage questions; explain why the task is important;
• determine if the person has the appropriate resources—
time, budget, data, or equipment—to get the job done on a
deadline;
• create progress reviews as part of the project planning; and
be prepared to live with less than perfect results.
 Factors determining degree of
decentralization
• Attitude of Top Management
•  Size of the Enterprise/Scale of Operations
• Nature of Functions
• Extent of Diversification
• Availability of capable managers
• Significance of the decision
• Sophistication of control techniques
• Changes in the internal and external
environment
• Influence of external factors
 Span of Control
• Span of control or span of management is a
dimension of organizational design measured
by the number of subordinates that report
directly to a given manager.
• A small, or narrow, span of control results in
each manager supervising a small number of
employees, while a wide span of
management occurs when more subordinates
report directly to a given manager.
 FACTORS THAT AFFECT
SPAN OF CONTROL
• Job complexity
• Similarity of subordinate jobs
• Physical proximity of subordinates
• Abilities of employees
• Abilities of the manager
• Technology
Tall Organisation

Advantages of tall Organisations
• There is a narrow span of
control
• There is a clear
management structure.
• The function of each layer
will be clear and distinct.
There will be clear lines of
responsibility and control.
Disadvantages of tall
Organisations
• The freedom and
responsibility of employees
(subordinates) is restricted.
• Decision making could be
slowed down as approval
may be needed by each of
the layers of authority.
• Communication has to take
place through many layers
of management.
Flat Organisation

Advantages of flat Organisations
• More/Greater
communication between
management and workers.
• Better team spirit.
• Less bureaucracy and easier
decision making.
• Fewer levels of
management which
includes benefits such as
lower costs as managers are
generally paid more than
worker.
Disadvantages of flat
Organisations
• Workers may have more
than one manager/boss.
• May limit/hinder the
growth of the organisation.
• Structure limited to small
organisations such as
partnerships, co-operatives
and some private limited
companies.
• Function of each
department/person could
be blurred and merge into
the job roles of others.