ORGANIZATIONAL STRUCTURE

Organization - Meaning

 According to Wikipedia, “An organization

comprises multiple people, such as an
institution or an association, that has a
collective goal and is linked to an external
environment.”
 Cambridge dictionary defines organization as
“A group of people who work together in an
organized way for a shared purpose.”
 Organizational structure is a system used to define a
hierarchy (ranking of persons or things in an order)
within an organization. It identifies each job, its function
and where it reports to within the organization. This
structure is developed to establish how an organization
operates and assists an organization in obtaining its
goals to allow for future growth. The structure is
illustrated using an organizational chart.
Why do we need an
Organizational Structure ?
 IMPORTANCE OF
ORGANIZATIONAL STRUCTURE

 It enables members to know what their

responsibilities
 It frees the manager and the individual workers to
concentrate on their respective roles and
responsibilities
 It coordinates all organization activities so there is
minimal duplication of effort or conflict.
 Avoids overlapping of function because it pinpoints
responsibilities.
 Shows to whom and for whom they are
responsible
ORGANIZATIONAL RELATIONSHIP

1. FORMAL RELATIONS
2. INFORMAL RELATIONS
ORGANIZATIONAL RELATIONSHIP

1. FORMAL RELATIONS
 Formal structure, through departmentalization and work
division, provides a framework for defining managerial
authority, responsibility and accountability
Formal Structure

Should Well
not be defined
flexible jobs

Formal
Channeled Definite
Organization
individual and authority /
group efforts responsibility
ORGANIZATIONAL RELATIONSHIP

2. INFORMAL RELATIONS
 Informal structure is generally social, with blurred or
shifting lines of authority and accountability.
 It also has its own channels of communication, which
may distribute information more broadly and rapidly
than the formal communication system.
Informal Structure
A network of personal / social
relationships, not established, required
by FORMAL organization but arising
spontaneously

Loosely Structure (membership),

organized communication networks
Informal (“grapevine”), and relationships
behaviors and norms) do not
organization necessarily follow those of
the formal organization.
flexible

ill defined

Spontaneous
Spontaneous
 TYPES OF ORGANIZATIONAL
STRUCTURE

1. Tall or Centralized Organizational Structure

2. Flat or Decentralized Organizational Structure
Tall Organizational Structure
• Large, complex organizations often require a taller
hierarchy.
• In its simplest form, a tall structure results in one
long chain of command similar to the military.
• As an organization grows, the number of
management levels increases and the structure
grows taller. In a tall structure, managers form
many ranks and each has a small area of control.
 Tall Organizational Structure
ADVANTAGES:
1.The quality of performance will
improve due to close supervision.
2.Discipline will improve.
3.Superior - Subordinate relations will
improve.
4.Control and Supervision will become
easy and convenient.
5.The manager gets more time to plan
and organise the future activities.
6.The efforts of subordinates can be
easily coordinated.
7.Tall Organisation encourages
development of staff.
8.There is mutual trust between superior
and subordinates
DISADVANTAGES:
1. Tall Organisation creates many levels
of management.
2. There are many delays and distortion
in communication.
3. Decisions and actions are delayed.
4. It is very costly because there are
many managers. The managers are
paid high salaries.
5. It is difficult to coordinate the
activities of different levels.
6. There is strict supervision. So the
subordinates do not have any
freedom.
7. Tall Organisation is not suitable for
routine and standardised jobs.
8. Here, managers may became more
dominating.
Flat Organizational Structure
• Flat structures have fewer management levels, with
each level controlling a broad area or group.
• Flat organizations focus on empowering employees
rather than adhering to the chain of command.
• By encouraging autonomy and self-direction, flat
structures attempt to tap into employees’ creative
talents and to solve problems by collaboration.
 Flat Organizational Structure
ADVANTAGES
1.Flat Organization is less costly
because it has only few
managers.
2.It creates fewer levels of
management.
3.Quick decisions and actions can
be taken because it has only a
few levels of management.
4.Fast and clear communication is
possible among these few levels
of management.
5.Subordinates are free from close
and strict supervision and control.
6.It is more suitable for routine and
standardized activities.
7.Superiors may not be too
dominating because of large
numbers of subordinates.
DISADVANTAGES
1. There are chances of loose control
because there are many subordinates
under one manager.
2. The discipline in the organization may be
bad due to loose control.
3. The relations between the superiors and
subordinates may be bad. Close and
informal relations may not be possible.
4. There may be problems of team work
because there are many subordinates
under one manager.
5. Flat organization structure may create
problems of coordination between various
subordinates.
6. Efficient and experienced superiors are
required to manage a large number of
subordinates.
7. It may not be suitable for complex
activities.
8. The quality of performance may be bad
 ORGANIZATIONAL CHART

Organizational chart is a line drawing that shows

how the parts of an organization are linked.

The organization chart establishes the following:

 Formal lines of authority—the official power to act
 Responsibility—the duty or assignment
 Accountability—the moral responsibility
ORGANIZATIONAL CONCEPTS:

1. AUTHORITY is defined as the official power to act. It is

power given by the organization to direct the work of others.

Example: A librarian may have the authority to hire, fire, or

discipline others.

2. A RESPONSIBILITY is a duty or an assignment. It is

the implementation of a job.

For example, a responsibility common to library assistant is to

provide services to the users of the library.
3. DELEGATION is the process of assigning duties
or responsibilities along with corresponding authority
to another person. Authority must be delegated with
the responsibility.

4. ACCOUNTABILITY means that individuals agree

to be morally responsible for the consequences of their
actions.

Example: A librarian and others are accountable for the

materials in the library.
 CHARACTERISTICS OF AN
ORGANIZATIONAL CHART

 Division of Labor/Work
 Chain of Command
 Span of control
 Unity of command
 Authority
DIVISION OF LABOR/WORK
Subdivision of work into separate jobs assigned to different
people
Potentially increases work efficiency
Necessary as company grows and work becomes more complex

CHAIN OF COMMAND
It is a formal line of authority and communication within the
organization and the structure. demonstrates who formally
reports to whom within the organization. The vertical lines in the
chart represent chain of command.

UNITY OF COMMAND
The concept of unity of command is that each person on the
organization chart has one manager or one boss.
SPAN OF CONTROL
Span of control means the number of individuals a person
is responsible for managing. A wide span of control
indicates that many people are reporting to a manager, and
a narrow span of control indicates that only a few people
are reporting to the manager.

AUTHORITY
The rights inherent in a managerial position to tell people
what to do and expect them to do it.
 TYPES OF ORGANIZATIONAL
CHARTS
1. Vertical charts
 It shows high-level management at the top with formal
lines of authority down the hierarchy, are most common.
2. A left-to-right (horizontal) charts:
 It shows the high-level management at the left with
lower positions to the right. Shows relative length of
formal lines of authority, helps simplify understanding
the lines of authority and responsibility.
3. Circular charts
 It shows the high-level management in the center with
successive positions in circles. It shows the outward flow
of formal authority from the high-level management. It
reduces status implications.
VERTICAL CHART
CIRCULAR CHART
A LEFT-TO-RIGHT (HORIZONTAL)
CHART
ADVANTAGES OF AN ORGANIZATIONAL CHART:
1. It provides a quick visual illustration of the organizational structure.
2. It provides help in organizational planning.
3. It shows lines of formal authority, responsibility and accountability.
4. It clarifies who supervises whom and to whom one is responsible.
5. It emphasizes the important aspect of each position.
6. It facilitates management development and training.
7. It is used to evaluate strengths and weakness of current structure.
8. It provides starting points for planning organizational changes.
9. It describes channels of communication.

DISADVANTAGES:
1. Charts become outdated quickly.
2. Does not show informal relationship.
3. Does not show duties and responsibilities.
4. Poorly prepared charts might create misleading effects.
STANDARDS FOR EVALUATING THE EFFECTIVENESS OF
HIERARCHICAL ORGANIZATION STANDARDS

1. Line authority relationships are clearly delineated and

defined by the organizational and/or functional charts and
policies;
2. Staff authority relationships are clearly delineated and
defined by the organizational and /or functional charts and
policies;
3. Functional authority relations are clearly delineated and
defined by the organizational and /or functional charts and
policies;
4. Staff personnel consult with, advise and provide counsel to
line personnel;
5. Service personnel functions are clearly understood by line
and staff personnel;