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ADVANCED ORGANIZATIONAL

BEHAVIOR GROUP
ASSIGHNMENT (MBA 561)

1
Cont’d…….

TITLE:- Organizational Design


& Structure
What is an Organizational Structure
 Is the organization's hierarchy of people and departments

as well as how information flows within the organization.

 How job, tasks are formally divided, grouped and

coordinated.

 the framework of the relations on jobs, systems, operating

process, people and groups making efforts to achieve the

goals.( Minterzberg ;1972)


The importance of the Organizational Structure

- enhances to an efficient operation of a business

- clearly defines its workers and their functions.

- define the hierarchy and the chain of command.


The Concept of Organization Structure

 helps influence behavior and relationships of jobs

and functions

 defines recurring activities and processes.

 provides a purposeful and goal-oriented behavior.


Types Organizational Structure
2.1. Centralized Structure

- all decisions, as well as processes, are defined; and handled

by the top management.

- Employees and managers are responsible for the successful

implementation of decisions and have to follow them.

- has a top-down approach for decision flow

- Environment is stable
Executive
Director

Finance Oper-
Manager ations
Manager

Finance Admin. Senior Asst.


Executive Officer Manager Manager

Centralization means reservation of authority at central point within the


organization. In centralization, control and decision-making reside at the
top levels of management
Cont’d…….
2.2. Decentralized Organization Structure

- day-to-day tasks and the decision-making processes are


delegated to the supervisors at the middle and lower level
by the top management.

- This also increases the responsibility and accountability of


the employees.

- Environment is complex, uncertain

- Lower-level managers are capable and experience at


making decisions
Tall and Flat Organizations
• Flat Organizational Structure
– Common in decentralized organizations
– Fewer layers of management
– Rapid communication
– Wide spans of control

• Tall Organizational Structure


– Common in centralized organizations
– Multiple layers of management
– Slower communication
– Narrower spans of control
Cont’d……
Organizational Design

Organizational Design - the process of


constructing and adjusting an
organization’s structure to achieve its
goals.

the linking of
departments and
jobs within an
organization
H. Mintzberg, The Structuring of Organizations, Prentice Hall, © 1979, 301.
Reprinted by permission of Prentice-Hall, Inc, Upper Saddle River, NJ.
Key Organizational Design Processes
The process of deciding
how to divide the work
in an organization

Four Dimensions
 Goal orientation
 Time orientation
 Interpersonal orientation
 Formality of structure
Basic Principles of Organization Design

1. Division of labor
2. Unity of command
3. Authority and responsibility
4. Span of control
5. Departmentalization
Cont’d……
 Division of Labor:
◦ individuals specialize in doing part of an activity rather
than the entire activity
 Unity of Command:
◦ no person should report to two or more bosses
 Authority & Responsibility:
◦ authority is a right, the legitimacy which is based on the
person’s position in the organization (legitimate power)
◦ power – an individual’s capacity to influence decisions
(other people)
◦ responsibility - an obligation to perform
 Span of Control:
◦ a number of subordinates a manager can direct effectively
and efficiently
Cont’d…..
Departmentalization
◦ the way how activities should be grouped into
departments
◦ There are five ways:
·

Functional Product

Customer Geographic Matrix


Cont’d……
1. Functional Departmentalization:
- departments are grouped based on the main functions of
the organization,
- such as marketing, finance, human resources, and
operations.

2. Product Departmentalization:
- departments are formed around specific products or
services that the organization offers.

3. Matrix Departmentalization:
- combines functional and product departmentalization.
- It creates cross-functional teams that work on specific
products, projects, or initiatives.
Organization Design Concepts
 There are two basic organization design concepts today:
1. mechanistic organization
2. organic organization
 Mechanistic structure

- traditional types of organizations.

- rigid and bureaucratic .

- help companies achieve efficiency.

 Organic structure

- modern types of organizations.


- decentralized, flexible, and aid companies in achieving
innovativeness.
Mechanistic Vs Organic Organization

• High specialization • Cross-functional teams


• Rigid departmentalization • Cross-hierarchical teams
• Clear chain of command • Free flow of information
• Narrow spans of control • Wide spans of control
• Centralization • Decentralization
• High formalization • Low formalization
 Limited information network
(downward)
 Low decision participation
Type of Organizational Design and Structure

 There are two major categories of organizations-

1- formal and

2- informal.

 Formal organizational design

- involves carefully planned and structured hierarchies, roles,


and reporting relationships.

- aims to provide stability, clarity, and a clear chain of


command within the organization.
Cont’d………
Informal organizational design

- represents the networks of relationships, interactions, and

communication patterns that develop naturally within the

organization.

- can emerge through social connections, shared interests,

and informal decision-making mechanisms within teams or

among individuals.
Cont’d……
 Types of formal organizational design and structure:

1. Line Organizational Structure & Design

2. Functional Organizational Structure & Design

3. Line and Staff Organizational Structure & Design

4. Divisional Organizations

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