Organization Design & StructureOrganization Design & Structure

Organizational structureOrganizational structure

The formal configuration between individuals and groups with respect to the allocation of tasks, responsibilities, and authorities within organizations.

The pattern of jobs and groups of jobs in an organization.

A diagram representing the connections between the various departments within an organization: a graphic representation of organizational design –

Organizational Chart

Organizational DesignOrganizational Design

The process of coordinating the structural elements of an organization in the most appropriate manner.

The process by which managers create a specific type of organizational structure and culture so that a company can operate in the most efficient and effective way.

Factors affecting Organizational Factors affecting Organizational StructureStructure

Organizational Structure

Environment

Technology

StrategyHuman

Resources

Key Design DecisionsKey Design Decisions

Division of Labor - Low

- HighDepartmentalization - Homogeneous

- Heterogeneous Span of Control - Less

- MoreAuthority - High

-Low

DIFFERENTIATIONDIFFERENTIATION Process of deciding how to divide the work in an organization.Ensures that essential tasks are assigned to one or more jobs. Four Dimensions of Differentiation by Lawrence and Lorsch

1.Manager’s goal orientation

2.Time orientation

3.Interpersonal orientation

4.Formality of struscture

FORMS OF DIFFERENTIATION:Horizontal Differentiation Vertical Differentiation Spatial Differentiation

HORIZONTAL DIFFERENTIATIONHORIZONTAL DIFFERENTIATION Differentiation between organizational subunits Based on employees’ specialization Increases with specialization and departmentalization

DEPARTMENTALIZATIONThe process of breaking up organizations into coherent units. Functional OrganizationFunctional Organization: The type of departmentalization based

on the activities or functions performed (e.g., sales, finance). Product OrganizationProduct Organization: The type of departmentalization based on

the products (or product lines) produced. Matrix OrganizationMatrix Organization: The type of departmentalization in which a

product or project form is superimposed on a functional form.

VERTICAL DIFFERENTIATIONVERTICAL DIFFERENTIATION Difference in authority and responsibility in

organizational hierarchy Tall, narrow organizations-greater vertical

differentiation Flat, wide organizations-less vertical

differentiationTall structures have many levels of authority

relative to the organization’s size.Flat structures have few levels but wide

spans of control.

SPATIAL SPATIAL DIFFERENTIATIONDIFFERENTIATION

Geographic dispersion of offices, plants and personnel

Increase in no. of locations-increases complexity but necessary

May give organization political and legal advantages in a country

Horizontal, vertical and spatial differentiation indicate the width, height and breadth of an organizational structural needs

INTEGRATIONINTEGRATIONDefinition- The process of coordinating the

different parts of an organization.

Designed to achieve unity among individuals and groups .

Supports a state of dynamic equilibrium - elements of organization are integrated, balanced.

VERTICAL INTEGRATIONVERTICAL INTEGRATION

Hierarchical referralRules and proceduresPlans and schedulesPositions add to the organization structureManagement information system

HORIZONTAL INTEGRATIONHORIZONTAL INTEGRATIONLiaison rolesTask forces Integrator positionsTeams

DESIGN DIMENSIONSDESIGN DIMENSIONS

Guide to designing structuresGuide to designing structures How many tasks should a position contain? How specialized should each task be? Skills, ability, knowledge and training needed

for work? Basis for grouping positions? What should be the span of control? How centralized or de-centralized should the

decision making power be? How standardized should the work content be? How large should each unit be?

ORGANIZATION IMPLICATIONSORGANIZATION IMPLICATIONS

External environmentDynamic vs Stable environmentsComplex vs Simple environmentsDiverse vs Integrated environmentsHostile vs Munificent environments

Organizational size Technology Organizational Strategy

MINTZBERG’S MODEL – ORGANISATIONAL MINTZBERG’S MODEL – ORGANISATIONAL STRUCTURESTRUCTURE

5 Generic Structures – Simple 5 Generic Structures – Simple StructureStructure

Little or no techno structureFew support staffersLoose division of LaborMinimal differentiation among its unitsSmall managerial hierarchy

MACHINE BUREAUCRACYMACHINE BUREAUCRACY Highly specialized, routine operating tasks Very formalized procedures in the operating core Proliferation of rules, regulations, & formalized

communication Reliance on the functional basis for grouping tasks Relatively centralized power for decision making Elaborate administrative structure with sharp

distinctions

between line and staff.

PROFESSIONAL BUREAUCRACYPROFESSIONAL BUREAUCRACY

Relies for Coordination onStandardization of SkillsProfessionals are hired for the operating core.Coordination between operating professionals is

handled by standardardization of skills and knowledge.

DIVISIONALISED FORMDIVISIONALISED FORM

Semi Autonomous unitsHorizontally Diversified Products and Services In a straight forward, stable environmentWhere Large economies of Scale do not apply

ADHOCRACYADHOCRACY

Highly Organised structure with,Little formalization of Behaviour Job SpecializationGroup the Specialists into functional unitsReliance on liaison devices to encourage mutual

adjustment

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