Organizational Structures
Dr Fred Mugambi MwirigiJKUAT
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Introduction Organizational designing and structuring are
key components of organizational planning Good structures must be flexible and adaptive
yet predictable with regard to the support they offer organizational operations
Firms must take time to study their operations in order to develop structures that reflect and respond to the needs of their organizations
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Centralization & Decentralization
Structures reflect various degrees of centralization or decentralization of operations
Centralization- authority to make important decisions is retained by managers at the top of the hierarchy
Decentralization- authority to make important decisions is delegated to managers at all levels in the hierarchy
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What Is an Organizational Structure?
An illustration showing how job tasks are formally divided, grouped, and coordinated.
Also called an organogram
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Questions to consider when Structuring
To what degree are articles subdivided into separate jobs?
On what basis will jobs be grouped together? To whom do individuals and groups report?
How many individuals can a manager efficiently and effectively direct?
Where does decision-making authority lie? decentralization
To what degree will there be rules and regulations to direct employees and managers?
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Key pillars of organizational structuring
Work specialization Departmentalization Authority vs responsibility Chain of command Unity of command Span of control Centralization vs decentralization
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Work Specialization The degree to which tasks in the
organization are subdivided into separate jobs.
Makes efficient use of employee skills Increases employee skills through
repetition Less between-job downtime increases
productivity Specialized training is more efficient Allows use of specialized equipment
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Departmentalization The basis by which jobs are grouped
together.Activities grouped by:
Function Product Geography Process Customer
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Authority Balance
Chain of Command
The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom.
Authority
The rights inherent in a managerial position to give orders and to expect the orders to be obeyed.
Unity of Command
A subordinate should have only one superior to whom he or she is directly responsible.
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Span of Control
Narrow Span Drawbacks:
• Expense of additional layers of management.
• Increased complexity of vertical communication.
• Encouragement of overly tight supervision and discouragement of employee autonomy.
Narrow Span Drawbacks:
• Expense of additional layers of management.
• Increased complexity of vertical communication.
• Encouragement of overly tight supervision and discouragement of employee autonomy.
Concept:Concept:
Wider spans of management increase organizational efficiency.Wider spans of management increase organizational efficiency.
Concept:Concept:
Wider spans of management increase organizational efficiency.Wider spans of management increase organizational efficiency.
The number of subordinates a manager can efficiently and effectively direct.
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Centralization vs decentralization
Centralization
The degree to which decision making is concentrated at a single point in the organization.
Formalization
The degree to which jobs within the organization are standardized.
Decentralization
The degree to which decision making is spread throughout the organization.
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Factors That Influence Structure
Strategy Organization Size Technology Environment
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Common Organization Designs
Simple Structure
A structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization.
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Common Organization Designs (cont’d)
Bureaucracy
A structure of highly operating routine tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command.
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The Bureaucracy Strengths
Functional economies of scale
Minimum duplication of personnel and equipment
Enhanced communication
Centralized decision making
Weaknesses Subunit conflicts with
organizational goals Obsessive concern with
rules and regulations Lack of employee
discretion to deal with problems
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Matrix Structure
Key Elements:
+ Gains the advantages of functional and product departmentalization while avoiding their weaknesses.
+ Facilitates coordination of complex and interdependent activities.
– Breaks down unity-of-command concept.
Key Elements:
+ Gains the advantages of functional and product departmentalization while avoiding their weaknesses.
+ Facilitates coordination of complex and interdependent activities.
– Breaks down unity-of-command concept.
A structure that creates dual lines of authority and combines functional and product departmentalization.
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04/20/23
Matrix Structure
CEO
Vice PresidentEngineering
Vice PresidentFinance
Vice PresidentPurchasing
Vice PresidentSales and Marketing
Vice President Research and Development
Product AManager
Product BManager
Product CManager
Product DManager
Product Team
Two-boss employee1717
Modern Design Options
Characteristics:• Breaks down departmental barriers.
• Decentralizes decision making to the team level.
• Requires employees to be generalists as well as specialists.
• Creates a “flexible bureaucracy.”
Characteristics:• Breaks down departmental barriers.
• Decentralizes decision making to the team level.
• Requires employees to be generalists as well as specialists.
• Creates a “flexible bureaucracy.”
Team Structure
The use of teams as the central device to coordinate work activities.
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Virtual Organization
Advantage: Provides maximum flexibility while concentrating on what the organization does best.
Disadvantage: Reduced control over key parts of the business.
Advantage: Provides maximum flexibility while concentrating on what the organization does best.
Disadvantage: Reduced control over key parts of the business.
A small, core organization that outsources its major business functions.
Highly centralized with little or no departmentalization.
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Mechanistic Vs Organic Structures
Mechanistic Model
A structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization.
Organic Model
A structure that is flat, uses cross-hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making.
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Mechanistic Versus Organic Models
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Mechanistic v/s Organic Structure Contd.
Mechanistic Organic
Individual Specialization Joint Specialization
Simple Integration Complex integration
Centralization Decentralization
Standardization Mutual Adjustment
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In summary
Associated with
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Thank you
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