STRUCTURA ORGANIZATIEI (ENG)

8/8/2019 STRUCTURA ORGANIZATIEI (ENG)

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The Structure of the Organization

Organizations are more than groups of people; they have their own objectives, formal

patterns of relationships (i.e.structure),practice division of labor(who does what?),specify formal sources of authority (who makes decisions?)These are the key elements of the organizations and the way they are dealt with

determines the nature of the organization, what departments and functions it contains,the forms of relationships and communication practiced, the levels of management, theamount of centralization / decentralization and so on. An organization exists if it has

some form of structure or formality. Within the formal organization, an informalorganization exists.

The formal organization has in view the pattern of relationship and tasks defined byofficial rules, policies and systems. It is designed to achieve the objectives in a rational

and efficient way. There are diagrams which how the official re lationships, levels ofmanagement and so on which form the formal organization.The way the organization works is affected by the official procedures and

relationships, by the behavior of the people who work in it. People form small groupsand social relationships, develop non-standard, informal ways of getting things done.This is known as the informal or unofficial organization and exists within each

organization. The social groups develop behavioral patterns, beliefs and objectiveswhich are different and even opposed to the requirements of the formal organizations.

The informal organization exists becauseformal relationships are considered too impersonal

it fulfils human needs for friendship and belongingthe security of the group provides psychologic al support for the individual

it provides a power base for those dissatisfied with their official influence

the formal organization is not considered efficient or flexible enoughThe two types of organization exist side by side in every organization. The

management must harness the beneficial aspects of informal organizations and ensurethe meeting of the employees needs.

The division of the labor within an organization requires specialization. It means thatthe various tasks and activities needed to meet the objectives of the organizationshould be suitably grouped and divided up. the tasks and activities are grouped into

departments. By specializing, the people are able to concentrate on one task or groupof related tasks and develop proficiency, knowledge and

expertise. The more developed an organization is the more specialization anddepartamentation is needed. The tasks are linked on the basis of common functions, for

example , Production, Finance, Personnel and so on. Here is a scheme that shows thelinks:

Managing Director

marketing purchasing research finance personnel production& sales &dev. &accounting


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The activities of many organizations are across the country and not concentrated inone single place. Under these circumstances, the organization is divided up on regional

basis and local management given responsibility for the activities of the branch, area orregion as the case may be.

Another commonly encountered form of specialization is by category of product orservice. This is encountered in large organizations (in private and public sectors)which

have a wide range of services and products.Organizations choose structures which are thought to be the most efficient for their

particular circumstances and operating conditio ns. They often use a mixture of types in

the attempt to combine the best features of functional, product and geographicalspecialization. It is not sufficient to consider the reasoning behind the departments by thenumbers of department and the consequent levels of management. A major influence on

this is the span control.The span control is the number of subordinates over which a supervisor has direct

control. Classical theories tend to indicate a narrow span of control; practice variesgreatly with organizations using spans ranging from one to fifty or even more. Larger

spans are in the area where work is routine, where smaller forms of control are commonwith technical, professional and managerial groups.

The number of subordinates cannot be determined in advance; it will depend on a

large variety of factors such as:complexity of work (the more complex the work is, the narrower the span is)degree of environmental change (fast rates of change require narrow spans to increase

adaptability)ability to subordinate(the more and better the people are trained, the less supervision they

require)riskness/danger associated with work (if mistakes are costly or there physical hazards,

narrower spans are require)managers ability (good organizers and communica tors will be able to deal with many

persons).

The spans of control vary from higher levels to lower ones. So do the number of levels ofmanagement or authority and are dependent on a variety of factors. The number of levels

determines the configuration or shape of the organization.An organization may contain many levels of authority or management; it is the number of

levels between the workers and top management which determines the configuration/shape of the organization. Part of the factors that influen ce the number of levels in anorganization are:

size of organizationcomplexity and nature of operation

production methodstechnology

management style; attitude to authorityamount of delegation practiced

spans of control

ability of management and personnel


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Here we have an example of an organization, four levels, so specific to many small andmedium sized organizations:

level 1 top managementlevel 2 departmental/functional managers

level 3 section heads/ supervisorslevel 4 clerks/ operatives / general personnel

There is a tendency to increase the number of levels with the increasing in sizeof the organization, but it is rare to find more than 8 or 10 levels of authority even in verylarge organizations.

Two other influences on organization structure are centralization anddecentralization. The latter refers to the dispersal of authority to the parts of theorganization, does not describe physical locations. The authority to take decisions is

spread throughout the various levels; opposed to it is the centralized organization wherethe top management is the decision taker.

Because of their nature, certain functions are more easily decentralized than theothers. Production, Marketing are of this type, while Finance and Research func tion

better in centralized manner. According to the specialists there are three main group ofdecisions that are to be reserved for top management, namely:decisions about what technology, markets and products to go into; what business to start

or abandondecisions on corporate financedecisions on corporate personnel policy and on key appointments

If these types of decisions are not centrally controlled, the organization will becomefragmented with no real cohesion.

All the organizations must have a legal status. There are a lot of legal possibilitiesbeginning with sole traders to public limited companies, from a partnership to a local

authority.The sole trader is the simple and common form of business organization; the owner has

the total control and has unlimited liability for the debts of the business.

A partnership is there where two or more people own and carry on a business together.The number of partners is limited to 20. The rights and obligations of partnerships are

covered by the Partnership Act of 1890; all the partners have unlimited liability. Thereare also limited partnerships where all the partners may enjoy limited liability; there must

be one partner who has unlimited liability while the rest have a limited one and are notallowed to take part to the management of the business. These two types of organizationsare known as UNINCORPORATED ASSOCIATIONS.

The limited liability companies are the forms which account for the overwhelmingproportion of business activity.; they are legal entities i n their own right, the liability of

the shareholders is limited to the amount paid or to be paid, on the shares taken up onthem. The shareholders know their total potential liability in case of failure.

The concept of limited liability is universal in all industrialized economies and developbecause the sole trader and partnership forms are less appropriate for larger enterprises

with substantial capital requirements. The shareholders may invest money in an

enterprise without taking part in the management of the business and have unlimitedliability for the debts of the business.


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Utility Division of work into activities

Linkage between different functions

Hierarchy

Authority structure

Authority relationships

Coordination with the environment

Components ComplexityFormalization

Centralization

Principles of organization structure

Modern organizational structures have evolved from several organizational theories, which haveidentified certain principles as basic to any organization.

Specialization

Specialization facilitates division of work into units for efficient performance. According to the

classical approach, work can be performed much better if it is divided into components and

people are encouraged to specialize by components. Work can be specialized both horizontally

and vertically (Anderson, 1988). Vertical specialization in a research organization refers to

different kinds of work at different levels, such as project leader, scientist, researcher, field staff,etc. Horizontally, work is divided into departments like genetics, plant pathology, administration,

accounts, etc.

Specialization enables application of specialized knowledge which betters the quality of workand improves organizational efficiency. At the same time, it can also influence fundamental

work attitudes, relationships and communication. This may make coordination difficult andobstruct the functioning of the organization. There are four main causal factors which could

unfavourably affect attitudes and work styles. These are differences in:

y goal orientation;

y time orientation;

y inter-personal orientation; and

y the formality of structure (Lawrence and Lorsch, 1967).

Coordination

Coordination refers to integrating the objectives and activities of specialized departments torealize broad strategic objectives of the organization. It includes two basic decisions pertaining

to:

(i) which units or groups should be placed together; and

(ii) the patterns of relationships, information networks and communication (Anderson, 1988).

In agricultural research institutions, where most of the research is multidisciplinary but involves

specialization, coordination of different activities is important to achieve strategic objectives.


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Efficient coordination can also help in resolving conflicts and disputes between scientists in a

research organization.

Hierarchy facilitates vertical coordination of various departments and their activities.

Organizational theorists have over the years developed several principles relating to the

hierarchy of authority for coordinating various activities. Some of the important principles are

discussed below.

Unity of CommandEvery person in an organization should be responsible to one superior andreceive orders from that person only. Fayol (1949) considered this to be the most important

principle for efficient working and increased productivity in an organization.

The Scalar Principle Decision making authority and the chain of command in an organization

should flow in a straight line from the highest level to the lowest. The principle evolves from the

principle of unity of command. However, this may not always be possible, particularly in large

organizations or in research institutions. Therefore Fayol (1949) felt that members in such

organizations could also communicate directly at the same level of hierarchy, with prior

intimation to their superiors.

The Responsibility and Authority Principle For successfully performing certain tasks,responsibility must be accompanied by proper authority. Those responsible for performance of

tasks should also have the appropriate level of influence on decision making.

Span of ControlThis refers to the number of specialized activities or individuals supervised by

one person. Deciding the span of control is important for coordinating different types of

activities effectively. According to Barkdull (1963), some of the important situational factors

which affect the span of control of a manager are:

y similarity of functions;

y proximity of the functions to each other and to the supervisor;

y

complexity of functions;y direction and control needed by subordinates;

y coordination required within a unit and between units;

y extent of planning required; and

y organizational help available for making decisions.

Departmentalization

Departmentalization is a process of horizontal clustering of different types of functions and

activities on any one level of the hierarchy. It is closely related to the classical bureaucratic

principle of specialization (Luthans, 1986). Departmentalization is conventionally based on

purpose, product, process, function, personal things and place (Gullick and Urwick, 1937).

Functional Departmentalization is the basic form of departmentalization. It refers to the

grouping of activities or jobs involving common functions. In a research organization the

groupings could be research, production, agricultural engineering, extension, rural marketing and

administration.

Product Departmentalization refers to the grouping of jobs and activities that are associated witha specific product. As organizations increase in size and diversify, functional departmentalization

may not be very effective. The organization has to be further divided into separate units to limit


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the span of control of a manager to a manageable level (Luthans, 1986). In an agricultural

research institution, functional departments can be further differentiated by products and purpose

or type of research.

In contrast to functional departmentalization, product-based departmentalization has the

advantage of:

y less conflict between major sub-units;y easier communication between sub-units;

y less complex coordination mechanisms;

y providing a training ground for top management;

y more customer orientation; and

y greater concern for long-term issues.

In contrast, functional departmentalization has the strength of:

y easier communication with sub-units;

y application of higher technical knowledge for solving problems;

y greater group and professional identification;

y less duplication of staff activities;

y higher product quality; and

y increased organizational efficiency (Filley, 1978).

Departmentalization by Users is grouping of both activities and positions to make them

compatible with the special needs of some specific groups of users.

Departmentalization by Territory or Geography involves grouping of activities and positions at agiven location to take advantage of local participation in decision making. The territorial units

are under the control of a manager who is responsible for operations of the organization at that

location. In agricultural research institutions, regional research stations are set up to take

advantage of specific agro-ecological environments. Such departmentalization usually offers

economic advantage.

Departmentalization by Process or Equipmentrefers to jobs and activities which require a

specific type of technology, machine or production process.

Other common bases for departmentalization can be time of duty, number of employees, market,

distribution channel or services.

De-centralization and Centralization

De-centralization refers to decision making at lower levels in the hierarchy of authority. In

contrast, decision making in a centralized type of organizational structure is at higher levels. The

degree of centralization and de-centralization depends on the number of levels of hierarchy,

degree of coordination, specialization and span of control. According to Luthens (1986),

centralization and de-centralization could be according to:

y geographical or territorial concentration or dispersion of operations;

y functions; or

y extent of concentration or delegation of decision making powers.


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Every organizational structure contains both centralization and de-centralization, but to varyingdegrees. The extent of this can be determined by identifying how much of the decision making is

concentrated at the top and how much is delegated to lower levels. Modern organizational

structures show a strong tendency towards de-centralization.

Line and Staff Relationships

Line authority refers to the scalar chain, or to the superior-subordinate linkages, that extendthroughout the hierarchy (Koontz, O'Donnell and Weihrich, 1980). Line employees areresponsible for achieving the basic or strategic objectives of the organization, while staff plays a

supporting role to line employees and provides services. The relationship between line and staff

is crucial in organizational structure, design and efficiency. It is also an important aid to

information processing and coordination.

In an agricultural research organization, scientists and researchers form the line. Administrative

employees are considered staff, and their main function is to support and provide help to

scientists to achieve organizational goals

It is the responsibility of the manager to make proper and effective use of staff through their

supportive functions. The staff may be specialized, general or organizational (Anderson, 1988).Specialized staff conduct technical work that is beyond the time or knowledge capacity of top

management, such as conducting market research and forecasting. General staff consists of staff

assistants to whom managers assign work. Organization staff (such as centralized personnel,

accounting and public relations staff) provide services to the organization as a whole. Their role

is to integrate different operations across departments.

Line and staff personnel have different functions, goals, cultures and backgrounds.

Consequently, they could frequently face conflict situations. A manager has to use his skills in

resolving such conflicts.

Type of organizational structure

Classical organizational structure

Modern organization designs

Classical organizational structure

In a simple centralized organizational structure, power, decision making authority and

responsibility for goal setting are vested in one person at the top. This structure is usually found

in small and single-person-owned organizations. The basic requirement of a simple centralized

structure is that it has only one or two functions, and a few people who are specialists in critical

functions. The manager is generally an expert in all related areas of functions and is responsible

for coordination. Thus, the organization has only two hierarchical levels. However, this structure

has to become more complex for growth, diversification or other reasons.

The Bureaucratic Organization


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In large organizations and under well defined conditions, organization structure may be

bureaucratic. The essential elements of a bureaucratic organization are:

y the use of standard methods and procedures for performing work; and

y a high degree of control to ensure standard performance.

Figure 1 illustrates a bureaucratic organizational structure.

Figure 1. Bureaucratic organizational structure

Mintzberg (1981) has identified two types of bureaucracies. They are standard and professionalbureaucracy. Standard bureaucracy is based on efficient performance of standardized routine

work. Professional bureaucracy depends upon efficient performance of standardized but complexwork. Thus, it requires a higher level of specialized skills. The structure of standard bureaucracy

is based on functions, large technical staff and many mid-level managers. In contrast,professional bureaucracy has few mid-level managers.

The Divisionalized Organization

Divisionalized organizational design refers to a multiproduct or service design that separates

different products or services to facilitate management planning and control. Different divisions

in the organization can further have simple centralized or functional designs, depending upontheir size and activities. This type of organizational design is favoured when different kinds of

products or services require different kinds of management.

Modern organization designs

Modern approaches to organizational design include project, matrix and adhocracy types.

Project design


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Project design is also called the team or task force type. It is used to coordinate across

departments for temporary, specific and complex problems which cannot be handled by a single

department. This design facilitates inputs from different areas. Members from different

departments and functional areas constitute a team, in which every member provides expertise in

their area of specialization. Such a structure generally coexists with the more traditional

functional designs. An illustration of project type of the organizational structure is given in

Figure 2.

Figure 2. A Project-type organization

Figure 3. Matrix organizational structure

Matrix organizations are not without their problems (Davis and Lawrence, 1978):

y Responsibility and jurisdiction are not clearly defined in matrix organizations. Bosses are alsonot clearly identified. Consequently, matrix organizations could lean towards chaos and disorder,

and even lead to power struggles unless power between line and project manager is skilfullybalanced.

y Within the organization, matrix organizations may encourage the formation of cliques since all

decisions are made in a group. This could reinforce group loyalties and create inter-groupconflicts.

y Matrix organizations need more human resources, particularly during initial periods. Thismeans higher overheads and increased expenditure.

y Matrix organization forms are usually found at the lower level of the organization.

Figure 4. Adhocratic organizational structure


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Advantages anddisadvantages

The advantages of a matrix include:

y Individuals can be chosen according to the needs of the project.y The use of a project team which is dynamic and able to view problems in a different way as

specialists have been brought together in a new environment.

y Project managers are directly responsible for completing the project within a specific deadlineand budget.

Whilst the disadvantages include:

y A conflict of loyalty between line managers and project managers over the allocation ofresources.

y Projects can be difficult to monitor if teams have a lot of independence.y Costs can be increased if more managers (ie project managers) are created through the use of

project teams.

[edit] Visual representation

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