Organization is defined as:

group of persons organized for a

particular purpose; an association: a
benevolent organization.
A structure through which individuals
cooperate systematically to conduct
business.
The administrative personnel of such a
structure.

Organization is defined as:

An

established social system

designed to carry out specific
objectives

It

also includes people working

together for a common purpose
while working in different areas

Organizing is defined as:

The deployment of organizational
resources to achieve strategic goals.
Organizing is arranging and grouping
jobs, allocating resources, and
assigning work so that activities can
be accomplished as planned.

Principles of Organizing
1. Work
Specialization
2. Chain of
Command
3. Chain of
Command
4. Authority
5. Responsibility
6. Accountability

7.Delegation
8.Centralization
9. Decentralization
10.Departmentaliz
ation
11.Formalization

Work Specialization
Degree

to which organizational tasks

are subdivided into separate jobs
Production is efficient because
employees perform small, well-defined
tasks
Employees can acquire expertise in
their tasks
Employees can be selected by ability
and attitude.

Work Specialization
Organization

achieves
standardization across tasks
When specialization is carried to an
extreme, workers tend to become
bored and alienated
Many companies are moving away
from this principle.

Chain of Command

An unbroken line of authority that links

all persons in an organization and
shows who reports to whom.

President

VP for Academic Affairs

VP for
Research and Extension

VP for Administrative
And Support Services

Authority
Formal

and legitimate right of a

manager to make decisions, issue
orders, and allocate resources
Vested in organizational positions,
not people
Managers have authority because of
the positions they hold
Accepted by subordinates.

Authority
Flows

top down through the

hierarchy
Subordinates comply because they
accept the managers' orders
Positions at the top have more
formal authority than those at the
bottom.

Line
Line

authority means that managers

have formal authority to direct and
control immediate subordinates.

Staff
Staff

departments include all those

who provide specialized skills in
support of line departments
Staff authority is generally more
narrow than line authority
Staff authority includes the right to
advise, recommend, and counsel in
the staff specialists' area of expertise.

Functional authority
Functional authority is control with
individuals outside ones own direct
areas of responsibility.

Responsibility
Duty

to perform the task an

employee has been assigned

Authority

commensurate with
responsibility.

Accountability
Justify outcomes to those above in the
chain of command.

Delegation
Process

to transfer authority and

responsibility to positions below

Delegate

authority to the lowest

possible level.

Centralization
All

facilities at one location

Decision

authority is located near the

top of the organization.

Decentralization
Facilities
Decision

at different locations

authority is pushed down

the chain of command to lower
levels.

Formalization
Written documentation used to direct
and control employees.

Departmentalization
Basis for grouping positions into
departments and departments into
the total organization.

Types of Organizational Structure

Organization Structure- Who reports to whom?

Types of Organizational Structure

Hierarchical (Tall/Centralized,
Bureaucratic) Structure
2. Decentralization( Flat, Decentralized)
Structure
3. Matrix
4. Network Organization Structure
1.

Hierarchical (Tall/Centralized,
Bureaucratic) Structure
It

has a centralized chain of command.

The

line-and-staff managers have

direct authority over their
subordinates, but staff managers have
no authority over line managers and
their subordinates.

Hierarchical (Tall/Centralized,
Bureaucratic) Structure
It

has an overall narrow span of

management and more levels in the
hierarchy.
There are more layers and
presumably more guidelines to follow
The decision-making process is
slower than other organization.

Diagram of a Tall Structure

Hierarchical (Tall/Centralized,
Bureaucratic) Structure
Advantages

Disadvantages

1.There is a narrow span

of control
i.e. each manager has a
small number of
employees under their
control. This means that
employees can be closely
supervised.

1.The freedom and

responsibility of
employees
(subordinates) is
restricted.

Hierarchical (Tall/Centralized,
Bureaucratic) Structure
2. There is a clear
2.Decision making
management structure. could be slowed down
as approval may be
3. The function of each needed by each of the
layers of authority.
layer will be clear and
3. Communication has
distinct. There will be
to take place through
clear lines of
many layers of
responsibility and
management.
control.

Hierarchical (Tall/Centralized,
Bureaucratic) Structure
4.Clear progression and 4. High management
promotion ladder.
costs because
managers are generally
paid more than
subordinates. Each
layer will tend to pay
its managers more
money than the layer
below it.

Decentralization
( Flat/Decentralized )
The

degree to which authority is shifted

downward within an organization to its
divisions, services, and units.
Delegating decision-making to ones
doing the work-participatory
management
Chain of Command from top to bottom
is short and the span of control is wide.

Decentralization
( Flat/Decentralized )

Decentralization
( Flat/Decentralized )
Advantages
Disadvantages
1.More/ greater
1. Workers may have
communication
more than one
between management
manager/boss
and workers
2. May limit/hinder
the growth of the
2. Better team sprit
organisation

Decentralization
( Flat/Decentralized )
Advantages

Disadvantages

1. Less bureaucracy
and easier decision
making

1. Structure limited to
small organisations
such as partnerships,
co-operatives and some
private limited
companies.
2. Function of each
department/person
could be blurred and
merge into the job roles
of others.

2. Fewer levels of
management which
includes benefits such
as lower costs as
managers are
generally paid more
than workers

Matrix Structure
Focus on both products and functions.
It has a formal vertical and horizontal chain of
command.
Functional and divisional chains of command
simultaneously
Dual lines of authority
Functional hierarchy of authority runs
vertically
Divisional hierarchy runs laterally
Violates the unity of command concept.

Matrix Structure
Advantages
1. More efficient use
of resources than
single hierarchy
2. Adaptable to
changing
environment

Disadvantages
1.Dual chain of
command
2. High conflict
between two sides
of matrix

Matrix Structure
Advantages

Disadvantages

3. Development of
both general and
specialists
management skills
4. Expertise available
to all divisions
5. Enlarged tasks for
employees.

3. Many meetings to
coordinate activities
4. Need for human
relations training
5. Power domination
by one side of matrix.

Networked, virtual structure

Organization

divides major functions

into separate companies brokered by
a small headquarters organization

Networked, virtual structure

Especially

appropriate for
international operations
Held together with phones, faxes,
and other electronic technology.
disaggregating of organizations (use
of independent contractors, joint
ventures, etc.)

Networked, virtual structure

Ikea, the world's largest furniture manufacture, has

been successful in implementing the boundary less
structure.

The company works closely with suppliers by

providing technical assistance, leasing them
equipment, and giving advice.
It also refined the role of the customer, putting
responsibility on them to cart the furniture home
and assemble it themselves.
As a result, the company can offer lower prices
(Pang, 2002), which supports its low-cost focused
strategy.

Networked, virtual structure

Advantages
1.Global
competitiveness
2. Work force
flexibility
3. Reduced
administrative
overhead.

DISADVANTAGES

1. No hands-on
control
2. Loss of part of the
organization severely
impacts remainder of
organization
3. Employee loyalty
weakened.

Organizational Chart is defined as:

A

series of boxes connected with one

or more lines to graphically represent
the organizations structure.

It provides an overall picture of how

the entire organization fits together

Line versus Staff authority

Line authority

based on the supervisor-subordinate relationship; creating a

direct line of authority from the top to the bottom of the
organization structure

Staff authority

specialists in a particular field used to support and advise line

personnel
The largest number of supervisors are usually line managers

Line and staff conflict

staff specialists resent that they are only advisors to line
managers, whereas line managers feel that staff always
tries to interfere

Tall or the Vertical Chart

Depicts the chief executive at the top with
lines of authority flowing down the
hierarchy.
Clearly defines the relationships between
and among the different levels in the
organization.
Members have more opportunities to
participate in decision making activities
due to limited span of control

Flat or Horizontal Chart

Depicts

the manager at the top with

wide span of control.
Levels of the management are not
shown in the chart.
Employees report to one manager.
They have more freedom
Communication is simple, fast with
minimal distortions (distance to top
and lower levels is shorter.)