Chapter 10

Basic Organizational Design

 Organizing
• It means decide the framework of an organization. How many department
are needed how many post are needed .how to distribute task among
different people.
 Organizational Structure

• It is a framework within which an Organization arranges it's lines of

authorities and communications and allocates rights and duties.
 Purpose of Organizing

• Divides work to be done in specific jobs & dept.

• Assigns tasks and responsibilities associated with individual jobs.
• Coordinates diverse organizational tasks.
• Establishes relationship b/w individuals, groups and departments.
• Establishes formal lines of authority.
• Allocates organizational resources.·
• Clusters jobs into units.
 Organizational chart
• It is a graphic presentation of an organization. It shows the organizational
relationship and activities within an organization.
 Element of organization structure
WORK SPECIALIZATION
• Work specialization define the amount of task are divided into separate
parts in an organization. The main aim of the organizational design is
distributing the several tasks into various parts and every task is
completed by different individual effectively.
 DEPARTMENTALIZATION

• After work are divided up through work specialization, they must be collected so that
common tasks can be coordinated. The basis on which jobs are grouped together is called
the departmentalization.
• There are five common form of departmentalization.
• Functional Departmentalization
• Product Departmentalization
• Geographical Departmentalization
• Process Departmentalization
• Customer Departmentalization
 Chain of Command

The chain of command is the line of authority, extending from upper organizational
level to lower level.
• It helps employee with questions such as "who do I report to"? And "who do I go if I
have a problem"? To understand chain of command we have to study 3 other
concepts.
• Authority: Refer to the right in a managerial position to tell people what to do.
• Responsibility: Employee assume an obligation to perform duty.
• Unity of command: Employee should response to one authority.
 SPAN OF CONTROL

• Span of control is important to a large degree because it defines the

number of levels and managers are in an organization .it also helps in
determining the numbers of employee's managed by a manager efficiently
and effectively.
 Centralization and Decentralization
Centralization
• The degree to which decision making in concentrated at upper level of the
organization, In centralization system top manager makes key decisions.
Decentralization
• The degree to which lower level employee provide input or let them
participate in a decision making. Today there is a concept on
empowerment.
 Formalization

• Formalization refer to how standardized an organization's jobs are and

the extent to which employee behavior is guided by rules and procedures.
• In highly formalized organization there are clear job description,
organization rules and clear define procedures of doing work.