This document provides an overview of organizational structure and design. It discusses key elements of organizational structure, including work specialization, departmentalization, chain of command, span of control, and centralization vs. decentralization. The document also defines these various concepts and provides examples to illustrate different types of structures. It aims to explain how arranging jobs and dividing work accomplishes an organization's goals through formal structure.
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1. In the Name of Allah, The Most Beneficent, The Most Merciful
3. Designing Organizational
Structure
Organizing - arranging and
structuring work to accomplish
an organizations goals.
Organizational Structure -
the formal arrangement of
jobs within an organization.
4. Designing Organizational Structure
Organizational Design - a process
involving decisions about six key
elements:
1. Work specialization
2. Departmentalization
3. Chain of command
4. Span of control
5. Centralization and decentralization
6. Formalization
6. 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 such as boredom, fatigue, stress,
poor quality, increased absenteeism, and higher
turnover.
8. Departmentalization by Type
Functional
Grouping jobs by
functions performed
Product
Grouping jobs by
product line
Geographical
Grouping jobs on
the basis of territory
or geography
Process
Grouping jobs on
the basis of product
or customer flow
Customer
Grouping jobs by
type of customer
and needs
9. Organizational Structure (cont.)
Chain of Command - the
continuous line of authority that
extends from upper levels of an
organization to the lowest levels
of the organizationclarifies
who reports to whom.
10. Organizational Structure (cont.)
Authority - the rights inherent in a
managerial position to tell people what
to do and to expect them to do it.
Responsibility - the obligation or
expectation to perform.
Unity of Command - the concept that
a person should have one boss and
should report only to that person.
16. Span of Control
It is the number of employees
who can be effectively and
efficiently supervised by a
manager.
17. Width of span is affected by:
Skills and abilities of the manager
Employee characteristics
Characteristics of the work being done
Similarity of tasks
Complexity of tasks
Physical proximity of subordinates
Standardization of tasks
Sophistication of the organizations information system
Strength of the organizations culture
Preferred style of the manager
19. Centralization
Centralization - the degree to which decision
making is concentrated at upper levels in the
organization.
This is common in organizations in which top
managers make all the decisions and lower-level
employees simply carry out those orders.
20. Decentralization
Decentralization - when an organization
relegates decision making to managers who
are closest to the action.
Employee Empowerment
Increasing the decision-making authority (power)
of employees