SHS

Organization and
Management
Quarter 1 – Module 7
Nature and Types of Organization
Structures

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Organization and Management – SHS

Quarter 1 – Module 7 : Nature and Types of Organization Structures

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Regional Director: Gilbert T. Sadsad

Assistant Regional Director: Jessie L. Amin

Development Team of the Module

Writer: Glenda C. Bas

Editors: Elsa B. Regalado
Meriam L. Camila
Jinky A. Villareal
Reviewer: Jinky A. Villareal
Illustrator: Ryan B. Cerillo
Layout Artist: Glenda C. Bas
Cover Art: Jed Adra

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 NATURE AND TYPES OF ORGANIZATION
STRUCTURES

Good day learner!

Today’s module discusses and
describes the different types of structures that
a company can use depending on the size of
the organization. Th is further explain s the
advantages and disadvantages of each
organizational structure.

The following are for you to learn:

• identify and discuss the different types of
organization structures; and
• classify the advantages and
disadvantages of each type of
organization structures.

For better understanding, the following words

will help you:
Organization – is a group of people who work together for a common good.

Organization Structure – is a framework where management authority is

defined, resources are properly allocated, and channel of communication is
observed.

Formal Organization – is an organization where activities are rationally

defined, division of work is unambiguous, and managerial authority is explicitly
vested in individuals according to their skills and responsibilities.

Informal Organization – refers to shadow organizations that evolve through

the personal interactions, sentiments, and social activities of individuals.

Line Organization – is the simplest and oldest form of organization structure;

the authority is delegated directly from top to bottom.

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 Line and Staff Organization – the line authority carries the right to require
the execution of orders while the line staff executive has the authority to
suggest on how such orders could be implemented.

Functional Organization – fully applies the principles of division of labor and

specialization where individuals are expected to be expert in his own field.

Le’ see how far you know by

.
t sanswering the questions
simply
below

How much do you

know?
Direction: Read the statement carefully then encircle the letter corresponding to the
word/s being described.

1. It is the simplest and oldest form of organization structure.

A. Line-Staff Organization C. Line Organization
B. Functional Organization D. Formal Organization

2. This is known as the backbone of management.

A. Planning C. Directing
B. Organizing D. Controlling

3. It was advocated by Frederick Taylor where a principle of labor and specialization

is applied.
A. Line organization C. Informal organization
B. Formal organization D. Functional organization

4. This is a shadow organization that evolves through the personal interactions,

sentiments, and social activities of individuals.
A. Informal organization C. Formal organization
B. Line Organization D. Functional organization

5. It frees the line executive from performing functions not related to his work.
A. Formal organization C. Line-Staff organization
B. Line organization D. Informal organization

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 Let’s get started by performing the
activityGood
below.
luck!

Activity 1

Direction: Arrange the jumbled letters below by

considering the given clue. Write the correct word
in the space provided for.

GORINGANIZ 1. It is the second managerial function which is considered to be the

backbone of management is called
_________________.

ROFLAM GANORIZAONTI 2. Managerial authority is explicitly vested to individuals

according to skills and responsibility is
________________.

TIOFUNALNC ONIRGATIZAON 3. An organizational structure which has a high

degree of specialization is __________________.

INLE NIORZATIGAON 4. The simplest form of organization structure

which facilitates discipline and control to individual
is ___________________.

NELI FTASF GAORNITIONZA 5. It is a structure that provides a staff support with

specialized knowledge and capability to line
executive is called ________________________.

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 What do I need know
to
?
Readand understand
the discussion
below and you will learn the different
organization structures used by
organizations.

An organization need to be organized to achieve its goal. Functions and

authority must be clear and well defined and resources must be properly allocated.
An organization seems to be ineffective when it is ill-structured or not organized,
hence, both human and material resources should be properly allocated.

A structure of organization varies depending on the size of the firm. The type of
structure adapted by the organization, however, influences how people act and
perform within the organization. Below are the commonly used types of
organizational structures.

Line Organization

The line organization is the simplest and oldest form of organization structure
where authority is delegated directly from top to bottom. Both staff and line functions
are performed by line executive. Each exercises line authority over his own
subordinates. It is for these reasons that a small size business uses this structure in
their organization. Below is the structure of a line organization.

CHIEF
EXECUTIVE

LINE LINE
EXECUTIVE EXECUTIVE

SUPERVISOR SUPERVISOR SUPERVISOR SUPERVISOR

WORKERS WORKERS WORKERS WORKERS

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 LINE ORGANIZATION
Advantages Disadvantages

• It is simple. It shows the direct lines of • It encourages the development of

responsibility, authority and excessive load of administrative
accountability of each individual in the responsibility. It becomes breeding place
organization. of “organizational dictators”.

• It facilitates decision making within the • It encourages the development of

organization due to the simplicity of its centralization of line controls of
organization structure. responsibilities.

• It facilitates discipline and control of • It lengthens the chain of command of the

individuals in the organization for its organization, which causes the delays in
clarity and chain of command. the administrative decisions.

It facilitates flexibility within the • It prevents the development of

•
organization as it responds to the specialization, other than its basic line
changing conditions and demands of its functions, which is needed to strengthen
organizational environment. the capacity of line executives.

• It discourages the recruitment and

training of qualifies personnel for the
organization.

Line-Staff Organization

The line staff is the pattern of most large and complex organizations. The line
authority carries the right to require the execution of orders while the staff executive
has the authority to suggest on how such orders could be implemented. Below is the
pattern of a line-staff organization structure.

CHIEF
EXECUTIVE STAFF
EXECUTIVE

LINE LINE
EXECUTIVE EXECUTIVE WORKERS

SUPERVISOR SUPERVISOR SUPERVISOR SUPERVISOR

WORKERS WORKERS WORKERS WORKERS

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 LINE-STAFF ORGANIZATION

Advantages Disadvantages

• It maintains a single line of responsibility, • It creates a source of conflict between

authority and accountability line and staff executives. Line executives
may consider the staff a threat to their
• It provides the line executives with staff own positions
support of specialized knowledge or
capability • It forces the staff executives to insist on
their advices to line executives to show
• It frees the line executive from performing their importance in the organization and
functions not directly related to his work to attain a certain degree of professional
achievement.
If facilitates the recruitment and training of
people needed by the organization • It creates administrative problems if the
•
staff authority is not carefully defined.

Functional Organization

Functional organization fully applied the principles of division and specialization

advocated by Frederick Taylor. For a functional organization to be effective, well
qualified individuals should be appointed to all positions. Each individual should
know exactly what is expected of him and what he expects others to do. This is
done by subdividing them into departments or division for the purpose of allowing the
people work effectively in groups as to their work alone. Below is an example of a
functional organization.

FUNCTIONAL FUNCTIONAL FUNCTIONAL

SUPERVISOR SUPERVISOR SUPERVISOR

WORKERS WORKERS WORKERS WORKERS WORKERS

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 FUNCTIONAL ORGANIZATION

Advantages Disadvantages

• It permits a high degree of specialization. • It suffers from dual authority and violates
the principles of single accountability. No
• It is easier to fill positions in such an organizations can run smoothly when a
organization since function specialists single individual has more than one boss.
are required to have only a limited
number of talents. • Authority and responsibility often overlap.
It is to draw a sharp line between
• It permits each specialist to become an functions.
expert in his own field.
• It is often difficult to get technical experts
• It provides better technical supervision to work together smoothly. Each is likely
for subordinates than would be possible to feel that his area of specialization is
where supervisors must perform less the most important.
similar functions.

Organization may come in all sizes and types. Each structure is unique to some
extent. However, the use of the different types of organizational structures also
considers the nature of an organization which is the formal and Informal
organization.

Formal or formalized organization is also labeled as bureaucracies. A

bureaucracy is a form of organization in which activities are rationally defined,
division of work is unambiguous, and managerial authority is explicitly vested in
individuals according to skills and responsibilities prescribed for their organizations
and it implies a less rigorous division of labor in a less formal environment.

A chain of command is the unit broken line authority between the lowest and highest
positions in an organization. It is the description of rank-ordered authority, and in a
bureaucracy, there is a presumption that a subordinate will seek direction,
communicate decisions and take orders directly from an immediate superior. While
span of control is defined by the number of subordinate one manager supervises.

Informal Organization on the other hand, refer to shadow organizations that

evolve through personal interactions, sentiments, and social activities of individuals.
Informal organizational structures are not written down; they do not have job titles or
formal description of authority. Mutual support by the members may also ensure
communications, enhance socialization, and provide a sense of group identification.
Informal leader gain status, although without rank, which can help satisfy employee’s
needs for leadership.

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 For sure youv gaie idea from
the
ha You
e n are
d nowdy
perform therea
discussion. next activity.
to Have
fun!

Activity #2 – My Organizational Structure

Direction: Outline and draw below a sample of an organizational structure that you
saw or observed in an office you have already visited. Include name and position in
each box of the outline structure.

Draw the structure here:

Now let’s see what you have learned from the lesson by
answering the
following practice tasks. Have fun!

Practice Task 1

Direction: Underline the correct word/s that correspond to the statement.

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1. (Organization, Organization structure) is a framework where
management authority is defined, resources are proper allocated, and channel of
communication is observed.

2. (Informal organization, Formal organization) is formed through

interaction, sentiments, and social activies of the people but do not have a structure.

3. (Functional organization, Line-staff organization) is a type of structure

that applies the principle of division of labor and specialization.

4.) (Line organization, Line-staff organization) this structure is pattern by

large and complex companies but somehow creates conflicts between line and staff
executives.

5.) (Line organization, Functional organization) this is the simplest form of

structure and it facilitate discipline and control of individuals for its clarity and chain of
command.

Wow, you’re doing !great

You can
now proceed to the next task.

Practice Task 2

Direction. Fill in the blank with the correct answer.

An organization to be effective need to have an organized structure where

employees and other resources are properly allocated. There are two nature of
organizations namely; 1) ________________ and informal organization. Formal
organization is labeled as bureaucracy where managerial authority is explicitly
vested to individuals according to their skills, responsibility and competency. The
2.)___________ organization on the other hand is said to be a shadow organization
where this organization was been created through personal interactions, interest,
sentiments and social activities of individuals but does have organizational structure.
Formal organization makes use of the organization structure depending on the size
of the organization. The first type is 3.)___________________ where it is said to be
the simplest and oldest form of organizational structure which commonly used by any
agencies or companies. The 4.) ___________________ is used by most large and
complex organizations for it has staff support with specialized knowledge that helps
the line executives. The last structure is advocated by Frederick Taylor it is called
5.)____________________ where principle of division and specialization is fully
applied.

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 Good You are now about to
complete the module by answering the
job!
final test prepared for you. Good luck

learn!
er

Post Test:

Direction: Encircle the letter corresponding to the word/s that matches the given
statement.

1. This is an organization that is formed through the personal interactions,

sentiments, and social activities of individuals.
A. Formal organization C. Formal organization
B. Informal organization D. Functional organization

2. A structure that applies principle of labor and specialization and was advocated
by Frederick Taylor.
A. Functional organization C. Informal organization
B. Line organization D. Formal organization

3. It is the simplest and oldest form of organization structure and is commonly used
by many organizations.
A. Informal Organization C. Line-Staff Organization
B. Functional Organization D. Line Organization

4. It is a structure that has a staff support to frees the line executive from performing
functions not related to his work.
A. Informal organization C. Line organization
B. Line-staff organization D. Functional organization

5. This is known as the backbone of management.

A. Directing C. Organizing
B. Planning D. Controlling

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Additional
Activity:
Explain the following statements:

1. A Line organization can become “breeding place of organizational

dictators”.

2. Line-staff organization structure creates a source of conflicts between

line and staff executives.

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