Designing Organizational Structure: Publishing As Prentice Hall

Designing Organizational Structure
• Organizing - arranging and structuring work to accomplish an

organization’s goals.
• Organizational Structure - the formal arrangement of jobs
within an organization.
• Organizational Design - a process involving decisions about
six key elements:
• Work specialization
• Departmentalization
• Chain of command
• Span of control
• Centralization and decentralization
• Formalization
Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition, Global Edition by Stephen P. Robbins & Mary Coulter
©2012 Pearson Education
Publishing as Prentice Hall 10-1
Organizational Structure
1. Work Specialization
– The degree to which tasks in the organization are
divided into separate jobs with each step
completed by a different person.
– Overspecialization can result in human
diseconomies such as boredom, fatigue, stress,
poor quality, increased absenteeism, and higher
turnover.

Organizational Structure (cont.)
3. Chain of Command - the continuous line of
authority that extends from upper levels of an
organization to the lowest levels of the
organization—clarifies who reports to whom.

Organizational Structure (cont.)
• Authority - the rights inherent in a managerial
position to tell people what to do and to
expect them to do it.
• Responsibility - the obligation or expectation
to perform.
• Unity of Command - the concept that a
person should have one boss and should
report only to that person.

4. Span of Control
• Span of Control - the number of employees who can
be effectively and efficiently supervised by a
manager.

Width of span is affected by:
• Skills and abilities of the manager
• Employee characteristics
• Characteristics of the work being done
• Similarity of tasks
• Complexity of tasks
• Physical proximity of subordinates
• Standardization of tasks
• Sophistication of the organization’s information system
• Strength of the organization’s culture
• Preferred style of the manager

5. Centralization
• Centralization - the degree to which decision
making is concentrated at upper levels in the
organization.
• This is common in organizations in which top managers
make all the decisions and lower-level employees
simply carry out those orders.

Decentralization
• Decentralization - when an organization
relegates decision making to managers who
are closest to the action.
• Employee Empowerment
– Increasing the decision-making authority (power)
of employees

Exhibit 10-7: Centralization or
Decentralization

6. Formalization
• Formalization - the degree to which jobs
within the organization are standardized and
the extent to which employee behavior is
guided by rules and procedures.
– Highly formalized jobs offer little discretion over
what is to be done.
– Low formalization means fewer constraints on
how employees do their work.

Exhibit 10-8: Mechanistic Versus
Organic Organizations

Contingency Factors
• Structural decisions are influenced by:
– Overall strategy of the organization
– Size of the organization
– Technology use employed by the organization
– Degree of environmental uncertainty

Contingency Factors (cont.)
• Strategy Frameworks:
– Innovation
• Pursuing competitive advantage through meaningful
and unique innovations favors an organic structuring
– Cost minimization
• Focusing on tightly controlling costs requires a
mechanistic structure for the organization

Contemporary Organizational Designs

1. Team Structures
• A team structure is one in which the entire organization is made

up of work teams that do the organization’s work.
• In this structure, employee empowerment is crucial because no

line of managerial authority flows from top to bottom.
• Rather, employee teams design and do work in the way they think
is best, but the teams are also held responsible for all work
performance results in their respective areas.

2. Matrix and Project Structures
The Matrix Structure assigns specialists from different functional

departments to work on projects being led by a project manager.
•One unique aspect of this design is that it creates a dual chain of
command.
•The matrix design “violates” the unity of command principle.
Many organizations use a Project Structure, in which employees

continuously work on projects.
•It has no formal departments where employees return at the
completion of a project. Instead, employees take their specific skills,
abilities, and experiencesCopyright
to Publishing
other projects.
© 2012 Pearson Education, Inc.
as Prentice Hall 10-16 ©2012 Pearson Education
3. The Boundary-less Organization
• An organization whose design is not defined by, or

limited to, the horizontal, vertical, or external boundaries
imposed by a predefined structure.
• Virtual Organization: It typically consists of a small core

of full-time employees and outside specialists
temporarily hired as needed to work on projects.
• Network Organization: It uses its own employees to do

some work activities and networks of outside suppliers
to provide other needed product components or work
processes.
4. Learning Organizations
• An organization that has developed the capacity to
continuously learn, adapt, and change.


Designing Organizational Structure: Publishing As Prentice Hall

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Designing Organizational Structure: Publishing As Prentice Hall

Uploaded by

Copyright:

Available Formats

Designing Organizational Structure

• Organizing - arranging and structuring work to accomplish an

Copyright © 2012 Pearson Education, Inc.

Copyright © 2012 Pearson Education, Inc.

Copyright © 2012 Pearson Education, Inc.

Copyright © 2012 Pearson Education, Inc.

Copyright © 2012 Pearson Education, Inc.

Copyright © 2012 Pearson Education, Inc.

Copyright © 2012 Pearson Education, Inc.

Copyright © 2012 Pearson Education, Inc.

Copyright © 2012 Pearson Education, Inc.

Copyright © 2012 Pearson Education, Inc.

Copyright © 2012 Pearson Education, Inc.

Copyright © 2012 Pearson Education, Inc.

Copyright © 2012 Pearson Education, Inc.

• A team structure is one in which the entire organization is made

• In this structure, employee empowerment is crucial because no

Copyright © 2012 Pearson Education, Inc.

The Matrix Structure assigns specialists from different functional

Many organizations use a Project Structure, in which employees

• An organization whose design is not defined by, or

• Virtual Organization: It typically consists of a small core

• Network Organization: It uses its own employees to do

Copyright © 2012 Pearson Education, Inc.

You might also like