Organizational

Structur
Design
and

e
 Organizational
Prepared by:
Structur
and
Group 6
Gumapac, Christian Jay e Design
Viovicente, Erwin
Bayarcal, Lea Rose
Domingo, Elah Jean
Lauro, Elvie Jane
Patadillo, Ma. Sharmen
Outline:
Defining Organization Structure
oWork specialization
oDepartmentalization
oChain of Command
oSpan of control
oCentralize vs. Decentralize
oFormalization
Outline:
Organization Design Decisions
oMechanistic and Organic
oContingency Factors
oCommon Designs
 Defining
Organizational
Structure & Design
 Organizational Design
- The formal arrangement of jobs within an
organization

 Organizational Structure
- A process involving decisions about six
element:
1. Work specialization
2. Departmentalization
3. Chain of Command
4. Span of Control
5. Centralization and decentralization
6. Formalization
Exhibit 9.1
Purpose
of
Organizing
 • Divides work to be done into specific jobs and
department
• Assigns tasks and responsibilities associated
with
individual jobs.
• Coordinates diverse organizational tasks
• Clusters jobs into units
• Establishes relationships among individuals,
groups,
and departments.
• Establishes formal lines of authority
Organizational
Structure
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 from boredom, fatigue, stress, poor
quality, increased absenteeism and higher turnover.
Departmentalization by Type
• Functional
• Product
• Geographical
• Process
• customer
Chain of command
- the continuous line of authority that extends
from upper levels of an organization to the lowest
levels of the organization and clarifies who reports
to whom.
1. Authority
- the rights inherent in a managerial position to tell
people what to do it.

2. Responsibility
- the obligation or expectation to perform.
3. Unity of Command
- the concept that a person should have one boss
and should report only to that person.

4. Delegation
- the assignment of authority to another
person to carry out specific duty.
5. Line of staff authority
- line managers are responsible for the
essential activities of the organization, including
production and sales. Line managers have the
authority to issue orders to those in the chain of
command.
- Staff managers have advisory authority,
and cannot issue orders to those in the chain
of command (except those in their own
department)
Span of control
- the number of employees who can be effectively
and efficiency supervised by a manager.
Centralization
- the degree to which decision making is
concentrated at a single point in the organization.

Decentralization
- the degree to which lower-level
employees provide input or actually make
decisions.
• Employee empowerment
- increasing the decision-making authority (power)
of employees
Exhibit 9.4a - Factors that influence the amount of
centralization and decentralization
• More Centralization
- Environment is stable
- Lower-level managers are not as capable or
experienced at making decisions as upper-level
manager
- Lower-level manager do not want to have a say
in decisions.
Exhibit 9.4a - Factors that influence the amount of
centralization and decentralization
- Decisions are significant
- Organization is facing a crisis or the risk of
company failure
- Company is large
- Effective implementation of company strategies
depends on managers retaining say over what
happens
Exhibit 9.4b - Factors that influence the amount of
centralization and decentralization
• More decentralization
- Environment is complex, uncertain
- Lower-level managers are capable and
experienced at making decisions.
- Lower-level manager want a voice in
decisions
- Decisions are relatively minor
Exhibit 9.4b - Factors that influence the amount of
centralization and decentralization
- Corporate culture is open to allowing managers
to have a say in what happens
- Company is geographically dispersed
- Effective implementation of company strategies
depends on managers having involvement and
flexibility to make decisions
Formalization
- the degree to which jobs within the organization
are standardized and the extent to which
employee behaviour is guided by rules and
procedures.
Organizational
Design Decisions
Mechanistic
• A rigid and tightly controlled structure
- High specialization
- Rigid departmentalization
- Clear Chain of Command
- Narrow Spans of Control
- Centralization
- High Formalization
 Organic
• Highly flexible and adaptable structure
- cross-Functional teams
- Cross-Hierarchical teams
- Free Flow of Information
- Wide Spans of Control
- Decentralization
- Low Formalization
Structural Contingency Factors
Structural decisions are influenced by:
• Overall strategy of the organization
- Organizational structure follows strategy.

• Size of the organization

- Firms change from organic to mechanistic
organizations as they grow in size
• Technology use by the organization
- Firms adapt their structure to the technology
they use

• Degree of environmental uncertainly

- Dynamic environments require organic structure;
mechanistic structures need stable environments.
Strategy frameworks:
• Innovation
- Pursuing competitive advantage through
meaningful and unique innovations favours an
organic structuring.

• Cost minimization
- Focusing on tightly controlling costs requires a
mechanistic structure for the organization.
• Imitation
- Minimizing risks and maximizing profitability by
copying market leaders requires both organic and
mechanistic elements in the organization’s structure.

• Strategy and structure

- Achievement of strategic goals is
facilitated by changes in organizational structure
that accommodate and support change.
• Size and structure
- As an organization grows larger, its structure tends
to change from organic to mechanistic with
increased specialization, departmentalization,
centralization, rules and regulations
• Technology and structure
- Organizations adapt their structures to
their technology
- Routine technology = mechanistic organization
- Non-routine technology = organic
organizations.
Traditional Design
1. Simple structure
- Low departmentalization, wide spans of control,
centralized authority, little formalization
2. Functional structure
• Departmentalization by function
- Operations, finance, human resources, and
product research and development

• Divisional structure
- Composed of separate business units or
divisions with limited autonomy under the
coordination and control of the parent corporation.
Exhibit 9.7 - Strength and weaknesses of common traditional
organizational designs
Contemporary Organizational Design
• Team structure
- the entire organization is made up of work
groups or self-managed teams of empowered
employees
• Matrix structures
- specialists for different functional departments
are assigned to work on project led by project
managers.

• Project structures
- employees work continuously on projects
moving on to another project as each project is
completed.
Exhibit 9.8 - Contemporary organizational designs
Boundaryless Organization
- a flexible and unstructured organizational design
that is intended to break down external barriers
between the organization and its customers and
suppliers
• Removes internal (horizontal) boundaries:
- Eliminates the chain of command
- Has limitless spans of control
- Uses empowered teams rather than departments

• Eliminates external boundaries:

- Uses virtual, network, and modular organizational
structures to get closer to stakeholders.
Removing Boundaries
• Virtual organization
- An organization that consists of a small core of
full-time employees and that temporarily hires
specialists to work on opportunities that arise.

• Network organization
- A small core organization that outsources its major
business functions (e.g., manufacturing) in order to
concentrate on what it does best
• Modular organization
- A manufacturing organization that uses outside
supplies to provide product component for its final
assembly operations

• Learning organization
- An organization that has developed the capacity to
continuously learn, adapt and change through the
practice of knowledge management by employees.
 Section 1.
Organizational
Structure:
An overview
What is organizational structure?

By structure, we mean the framework around

which the group is organized, the underpinnings which
keep the coalition functioning. It's the operating manual
that tells members how the organization is put together
and how it works. More specifically, structure
describes how members are accepted, how leadership
is chosen, and how decisions are made.
Why should you develop a structure for your organization?
• Structure gives members clear guidelines for
how to proceed.
• Structure binds members together.
• Structure in any organization is inevitable
When should you develop a structure for your organization?

It is important to deal with structure early in the

organization's development. Structural development
can occur in proportion to other work the organization
is doing, so that it does not crowd out that work. And it
can occur in parallel with, at the same time as, your
organization's growing accomplishments, so they take
place in tandem, side by side.
Ements of Structure

While the need for structure is clear, the best

structure for a particular coalition is harder to
determine. The best structure for any organization will
depend upon who its members are, what the setting is,
and how far the organization has come in its
development.
Elements of
Structure
• Governance
- The first element of structure is governance - some
person or group has to make the decisions within
the organization.
• Rules by which the organization operates
- Another important part of structure is having
rules by which the organization operates. Many of
these rules may be explicitly stated, while others may
be implicit and unstated, though not necessarily any
less powerful.
• Distribution of work
- The distribution can be formal or informal,
temporary or enduring, but every organization will
have some type of division of labor.
There are four tasks that are key to any group:
1. Envisioning desired changes
2. Transforming the community.
3. Planning for integration.
4. Supporting the efforts of those
working to promote change.
Common Roles
• An initial steering committee is the group of
people who get things started.
• A coordinating council (also referred to as a
coordinating committee, executive committee, and
executive council), modifies broad, organization-wide
objectives and strategies in response to input from
individuals or committees.
Common Roles
• Often, one person will take the place of the
coordinating council, or may serve as its head. Such
a person may be known as the Executive Director,
Project Coordinator, Program Director, or President.
• Task forces are made up of members who work
together around broad objectives.
Common Roles

• Action committees bring about specific changes in

programs, policies, and practices in the sectors in
which they work.
Example of Action Committees:
• Government and law enforcement
committee.
• Social services committee
• Media committee.
• Support committees
• Community trustees
• Grantmaker
• Support Organizations
• Partner Organizations
References:

- Stephen P. Robbins, Mary Coulter, and Nancy

Langton, Management, Chapter 9, Eighth Canadian
Edition. Copyright © 2005 Pearson Education Canada
Inc.
- https://ctb.ku.edu/en/table-of
contents/structure/organizational-
structure/overview/main.
THANK YOU!
GOD BLESS