Organization Structure

Foundations of Organization

Structure

What is Organizational Structure ?

An organizational structure defines how job tasks are

formally divided, grouped, and coordinated.

6 (Six) Key Elements design of organization’s structure:

1. Work Specialization

2. Departmentalization

3. Chain of Command

4. Span of Control

5. Centralization and Decentralization

6. Formalization

Work Specialization

Work Specialization defines the degree to which tasks in an organization are

subdivided into separate jobs

Advantages

At the beginning, Increases employee skills through repetition

Less between-job downtime increases productivity

Specialized training is more efficient

Allows use of specialized equipment Increases efficiency and productivity

Weakness

When not widely practiced, Human diseconomies likes boredom, fatigue, stress,

low productivity, poor quality, increased absenteeism, and high turnover

HOW TO SOLVE HUMAN DISECONOMIES ?

• GIVING EMPLOYEES A VARIETY OF ACTIVITIES TO DO

• ALLOWING TO DO A WHOLE AND COMPLETE JOB

• PUTTING INTO TEAMS WITH INTERCHANGEABLE

SKILLS OFTEN TO ACHIEVE SIGNIFICANTLY HIGHER

OUTPUT AND INCREASE SATISFACTION.

Departmentalization

Departmentalization defines the basis by which jobs in an

organization are grouped together.

The ways to grouped activities by :

1. Functions Performed (engineering, accounting, marketing,

purchasing, personnel and etc. departments)

2. The type of product or service (Tide, Pampers, Meats, etc.)

3. The Basis of Geography or Territory (Western, southern, or

Midwestern regions etc.)

4. Process (Validating, processing, payment collection etc,.)

5. Type of Customers (Large Corp. , small businesses, etc.)

Chain of Command

Chain of Command is an unbroken line of authority that extends from the

top of the organization to the lowest echelon and clarifies who reports to

whom.

Chain of Command related to :

Authority, the right inherent in managerial position to give orders...