Organisation

Organisation
• ”Organization is a structural relationship by which an enterprise is
bound together and the framework in which individual effort is
coordinated.”
Koontz and O’Donnell
Organising
• Process of determining the activities to be
performed,
• arranging these activities to administrative units as
well as
• assigning managerial authority and responsibilities to
people employed in the organization..
Importance of organizing
• Focus on, and facilitate the attaining of objectives..
• Arrangement of positions and jobs within the hierarchy..
• Define responsibilities and line of authority of
all levels..
• Creating relationships that will minimize
friction..
Organizing and organization structure

• Organizing
• The process of arranging people and other resources to work together to
accomplish a goal.

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• Organization structure
• The system of tasks, workflows, reporting relationships, and
communication channels that link together diverse individuals and groups.

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Why Have a Structure?
• A clear structure makes it easier to see which part of the business
does what
• An organisational structure is the way in which a business is arranged
to carry out its activities
Management Structure and Design
• The choice of structure impacts the organisations culture – their ethos
and beliefs
• If businesses are looking to change their direction they often look at
restructuring
Organisational structure
• Includes:
• The routes through which communication pass through the
business
• Who has authority and power and responsibility within the
business
• The roles and titles of people within the business
• The people whom individual employees are accountable for
and those for whom they are responsible
Key terms
• Hierarchy – the number of layers of levels within an organisation
• Subordinate – a worker
• Span of control – the number of subordinates who directly report into
a manager
• Chain of command – the line of communication and authority from the
top to the bottom of the hierarchy
Formal structures 

• The structure of the organization in its official state.

• An organization chart is a diagram describing reporting
relationships and the formal arrangement of work
positions within an organization.
• An organization chart identifies the following aspects

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of formal structure:
• The division of work.
• Supervisory relationships.
• Communication channels.
• Major subunits.
• Levels of management.

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Informal structures 

• A “shadow” organization made up of the unofficial, but

often critical, working relationships between
organization members.

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Functional structures

• People with similar skills and performing similar tasks are

grouped together into formal work units.
• Members work in their functional areas of expertise.
• Are not limited to businesses.
• Work well for small organizations producing few products or

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services.

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Functional structures in a business, branch
bank, and community hospital.

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Divisional structures

• Group together people who work on the same product or

process, serve similar customers, and/or are located in the same
area or geographical region.
• Common in complex organizations.
• Avoid problems associated with functional structures.

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Divisional structures based on product, geography,
customer, and process.

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Types of divisional structures and how they group
job and activities:
• Product structures focus on a single product or service.
• Geographical structures focus on the same location or
geographical region.

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• Customer structures focus on the same customers or
clients.
• Process structures focus on the same processes.

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Matrix structure

• Combines functional and divisional structures to gain

advantages and minimize disadvantages of each.
• Used in:
• Manufacturing

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• Service industries
• Professional fields
• Non-profit sector
• Multi-national corporations

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Matrix structure in a small multiproject business
firm.

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Team structures

• Extensively use permanent and temporary teams to solve

problems, complete special projects, and accomplish day-to-day

tasks.

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• Often use cross-functional teams.

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 How a team structure uses cross-functional
teams for improved lateral relations.

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Network structures

• A central core that is linked through networks of relationships

with outside contractors and suppliers of essential services.
• Own only core components and use strategic alliances or
outsourcing to provide other components.

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A network structure for a Web-based retail
business.

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Spans of control in “flat” versus “tall”
structures.

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Entrepreneurial Structure
• Often found where businesses operate in competitive markets and
especially where rapid decisions are needed
• Have a few core workers at the centre of the organisation and
peripheral workers surrounding them
• Depends on how good the core workers are at managing and making
decisions
• Can be difficult for larger organisations