Understanding Organizational

Structure
Presented by:
1. Amit Kumar Gupta (20MIB012)
2. Prateek Bhagat (20MIB042)
3. Syed Mir Naveed (20MIB062)
4. Sunny Shekhar (20MIB060)
5. Jagriti Dayal (20MIB024)
6. Priyank Behl (20MIB043)
7. Farhan Azim (20MIB017)
Organizational structure
There are three key components in the definition of organization structure:

1. Organization structure designates formal reporting relationships, including the number of

levels in the hierarchy and the span of control of managers and supervisors.

2. Organization structure identifies the grouping together of individuals into departments and of
departments into the total organization.

3. Organization structure includes the design of systems to ensure effective communication,

coordination, and integration of efforts across departments

Amit Kumar Gupta

Structure of organization

Amit Kumar Gupta

Role Of Structure In An
Organization
A good organizational structure facilitates achievement of the objective of every individual
through proper coordination of all activities
• Encourages Efficiency:
The main objective of an organization structure is to infuse efficiency in various functions. A systematic structure will
not leave anything to chance and every activity is coordinated to perform to its maximum. The organizational
members try to maximize the output of goods and services from the given inputs. There is an effort to have systematic,
rational and coordinated effort to control various waste and loss. Various organizational models are developed to bring
efficiency in operations.

• Communication:
Communication is the number one problem of every organization. A good structure provides proper communication
channel among persons working in the organization. A reporting relationship is established and a hierarchy of who
reports to whom is also specified in a good structure. There is a need for horizontal, vertical and lateral
communication process and it is done by a well-planned structure.

Prateek Bhagat
• Optimum Use of Resources:

The proper allocation of resources helps in their optimum utilization also. The organization structure gives
higher place to activities which are more important to the achievement of organizational objectives. The
activities are placed according to their importance in the structure and proper guidelines are given for
resource allocation. The optimum allocation of resources is important for the growth of a business.

• Job Satisfaction:

A good organization structure provides clear cut assignment of duties and responsibilities to various people
working in the business. The jobs are assigned as per their knowledge, expertise and specialization.
People get an opportunity to explain their jobs. There will be job satisfaction when persons are free to
operate within prescribed limits.

Prateek Bhagat
• Creative Thinking:
In a good organization structure, there is a freedom to plan and executing one’s own work. It allows a
person to think and develop new and better ways of doing work. Organization structure tries to put people
at places where they are most suitable. Many people have contributed to the development of management
thinking because of their creativity in a particular organizational structure.

• Facilitates Management:
There are several persons working in a business. Their work will have to be specified and duties will be
assigned as per the requirements of the organization. A good structure will help in establishing relationship
among persons working at different positions. An organization structure is a mechanism through which
management directs, co-ordinates and controls the activities of various persons.

• Conclusion
A well-designed structure will help both management and operation of a business. It is ensured that no
activity remains unattended, and work is assigned as per the capacity of the persons undertaking it. A well
thought organization structure is a great help for good administration.

Prateek Bhagat
Information sharing perspective
on structure
If the structure doesn’t fit the information requirements , people either will have too little
information or will spend time processing information that is not vital to their tasks.
• Dominant Structural approach:
There is an inherent tension between vertical and horizontal mechanisms in an organization. Whereas vertical linkages
are designed primarily for control, horizontal linkages are designed for coordination and collaboration, which usually
means reducing control.

• Communication and coordination:

Communication is the number one problem of every organization. A good structure provides proper communication
channel among persons working in the organization. A reporting relationship is established and a hierarchy of who
reports to whom is also specified in a good structure. There is a need for horizontal, vertical and lateral
communication process and it is done by a well-planned structure.

Syed Mir Naveed

• Segregated decision making:

Organizations may have to experiment to find the correct degree of centralization or decentralization to
meet their needs. Centralized decision making, means problems and decisions are funneled to top levels of
the hierarchy for resolution whereas decentralized decision making means decision-making authority is
pushed down to lower organizational levels.

• Proper set of rules and plans:

The next advantage is the use of rules and plans. To the extent that problems and decisions are repetitious,
a rule or procedure can be established so employees know how to respond without communicating directly
with their manager. Rules and procedures provide a standard information source enabling employees to be
coordinated without actually communicating about every task.

Syed Mir Naveed

INTEGRATION INVOLVING DIFFERENT TEAMS

Syed Mir Naveed

Information sharing perspective of organisation

• The organization should be designed to provide both

vertical and horizontal information flow as necessary
to accomplish the organization’s overall goals.

• Organizations can choose whether to orient toward a

traditional organization designed for efficiency, which
emphasizes vertical communication and control, or
toward a contemporary learning organization, which
emphasizes horizontal communication and
coordination.

Sunny Shekhar
 Vertical Information sharing

Vertical linkages Hierarchical referral

Coordinate activities The vertical lines which
between the top and the identify the chain of
bottom of the organization. command.

Rules and Plans Vertical information systems

create vertical links. Reports, computer systems,
and written information.

Sunny Shekhar
 Horizontal Information sharing

Information Systems Liaison Roles

Computerized information systems A liaison person is located in
enable managers throughout the one department but has the
organization to exchange responsibility for communicating
information about problems, and achieving coordination with
opportunities, decisions. another department.

Task Forces
task force is a temporary
committee composed of
representatives from each
organizational unit affected
by a problem.
Sunny Shekhar
 Horizontal Information sharing

Full-Time Integrator Teams

frequently has a title such as
product manager, etc. The
integrator does not report to
one of the functional
departments being
coordinated.
are permanent task forces
and are often used in
conjunction with a full-time
integrator.

Sunny Shekhar
Organization System
 What is
Organization
system?
An organizational system is the
structure of how an organization is
set up.

That structure defines how each

division of a business is set up,
the hierarchy of who reports to
whom and how communication
flows throughout the organization. 

Jagriti Dayal
Why organization system is important?

Make the processes simple Higher productivity

Streamline process Efficiency

Jagriti Dayal
 Types of Organizational Structures
• A traditional hierarchy
• Reporting flow is clear.
Functional
• Each employee report to its senior.
• Senior management oversees the entire structure.

• Divides the business up into teams based on the projects the

Divisional employees are working on.
• Includes many different types of teams.

• Flattens the hierarchy.

Flat • Employees have autonomy- over their work.
• Predicated on disrupting the traditional hierarchical structures
of businesses.

• Cross between a functional structure and a divisional structure.

Matrix • Complex and requires a lot of planning

Jagriti Dayal
 Functional
Organization
Structure

Jagriti Dayal
 Divisional
Organization
Structure

Jagriti Dayal
 Flat
Organization
Structure

Jagriti Dayal
 Matrix
Organization
Structure

Jagriti Dayal
ORGANIZATION DESIGN
ALTERNATIVES
Organizational Design :

Organizational design is the administration and execution of an organization’s strategic plan.

 The overall design of organization structure indicates three things

• Required work activities

• Reporting relationships
• Departmental groupings
Priyank Behl
Required Work Activities
o Departments are created to perform tasks considered strategically important to the company.
Example: Human resource department, Sales department, Purchase department, production department

o Organizations grow larger and more complex, then more functions need to be performed.

o Organizations define new positions, departments, or divisions as a way to accomplish new tasks deemed
valuable by the organization.

Priyank Behl
Reporting Relationships

o An organizational structure in which every employee is placed somewhere on an

organizational chart.

o Reporting relationships, often called the chain of command.

o Represented by vertical lines on an organization chart.

o Line of authority that links all persons in an organization.

o It shows who reports to whom.

o Define how employees are to be grouped into departments.

Priyank Behl
o Example

Priyank Behl
 Departmental Grouping
Departmental Grouping affects employees because they share a common supervisor and common resources, are jointly
responsible for performance and tend to identify and collaborate with one another.
It includes functional grouping, divisional grouping, multifocused grouping, horizontal grouping and virtual network
grouping.
 Functional Grouping :- It places together employees who perform similar functions or work processes or who
bring similar knowledge and skills to bear.
For an Internet company, all the people associated with maintaining the website might be grouped together in one
department.

CEO

Engineering Marketing Manufacturing

Farhan Azim –20MIB017

Divisional Grouping :- People are organized according to what the organization produces. All people
required to produce toothpaste - including personnel in marketing, manufacturing and sales – are grouped together
under one executive.
In huge corporations, such as TATA, some product or service lines may represent independent businesses, such as
TISCO (Iron & Steel), TELCO (Automobile), TCS, Taj Hotel , TATA Salt, etc.
CEO

Product Division 1 Product Division 2 Product Division 3

Multifocused Grouping :- An organization embraces two or more structural grouping alternatives

simultaneously. These structural forms are often called matrix or hybrid. An organization may need to
group by function and product division simultaneously or might need to combine characteristics of
several structural options. CEO

Manufacturing Marketing
Product Division 1
Product Division 2
Farhan Azim – 20MIB017
Horizontal Grouping :- Employees are organized around core work processes, the end-to-end work,
information and material flows that provide value directly to customers. All the people who work on a core
process are brought together in a group rather than being separated into functional departments.
CEO

Human
Finance
Resources

Core Process 1

Core Process 2

Virtual Network Grouping :- It is the most recent approach to departmental grouping. With this grouping, the
organization is a loosely connected cluster of separate components. In essence, departments are separate
organizations that are electronically connected for the sharing of information and completion of tasks.
Departments can be spread all over the world rather than located together in geographic location.
Accounting Marketing

Manufacturing
Distribution
Farhan Azim – 20MIB017
Thank you