Presented by: Suhail Gaziani 75 Darshana Shinde 112 Shweta Matta 88 Ritesh Gandhi 72

What is an Organizational Structure?

Organizational Structure is the system of task, reporting,

and authority relationships within which the work of the organization is done.
Structure defines the form and function of the

organizations activities.
Structure also defines how the parts of an organization fit

together.

Elements of Organizational Structure

Work specialization Departmentalization Chain of command Span of control Centralization and decentralization Formalization

Work Specialization
It is the extent to which the organizations work is

separated into different jobs to be done by different people.

Advantages Disadvantages Repetitive jobs Reduced job satisfaction Decreases productivity

Efficient use of labor

Reduced training costs Increases productivity

Departmentalization
Departmentalization refers to the process of grouping

activities into departments.

Usually, the more specialized the jobs within the organization,

the greater the departmentalization.

Basis of Departmentalization
Function
Type of product Geography Type of customer Process

By Function
Plant Manager

Manger Manager Manger Manger Manage Engineering Manufacturing Accounts Personal Purchas

By Type of product
President VP (Lubricants & Waxes) Marketing Planning VP (chemicals)

VP (Fuels)

Supply & distribution

Manufacturing

By Geography

VP (Sales)

Sales Manager Sales Mana Sales Manager Sales Manager esternSouthern RegionEastern Reg Region Northern Region

By Type of customer

Loan Division Retail Loan Commercial Loan Agricultural Loan

By Process

Inspectio Plant Manager packin Cast Press Tube Finishing & Department Department Department Department Shippin Manager Manager Manager Manager Dept Manage

Chain of Command
It is an unbroken line of authority that

extends from the top of the organization to the lowest level and clarifies who reports to whom.
It answers questions for employees such as
To whom do I go if I have a problem? To whom am I responsible?.

Span of Control
Span of control refers to the number of subordinates a

manager can efficiently and effectively direct.

It is the number of people directly reporting to the next

level

Centralization and Decentralization

Centralization - The degree to which decision making is

concentrated at a single point in the organization.

Decentralization - The degree to which decision making is

spread throughout the organization.

Formalization
It refers to the degree to which jobs within the

organization are standardized.

It is the extent to which rules and procedures

are followed in an organization.

TYPES OF ORGANIZATIONAL STRUCTURE

SIMPLE

FUNCTIONAL

DIVISIONAL

MATRIX

SIMPLE STRUCTURE
Low departmentalization Wide spans of control

Authority centralized in a single person

Little formalization Commonly used by small businesses

Owner
Executive 1 Executive 2 Executive 3

PROS
FAST

CONS
MORE SUITABLE FOR SMALL ORGANIZATIONS. RELIANCE ON ONE PERSON IS RISKY

FLEXIBLE INEXPENSIVE CLEAR ACCOUNTABILITY

Functional Structure
Groups employees together based upon the

functions of specific jobs within the organization.

CEO
Accounting and Finance

R&D

Production

Marketing

PROS
Simple to understand with clear lines of command Specified tasks and responsibilities. Staff can specialize in a particular business area

CONS
Interdepartmental conflict Coherence and good communication are particularly hard to achieve between virtually independent functions.

Divisional Structure
Groups each organizational function into a

division Divisions can be categorized on geographical basis, market basis, or on product/service basis Each division has relatively limited autonomy Parent corporation acts as an external overseer to coordinate and control the divisions

PROS
Encourage team spirit Managers can develop broad skills as they have control of all basic functions

CONS
Risk of duplicating activities which can increase cost and reduces efficiency

Matrix Structure
Combines functional and divisional departmentalization Dual lines of authority

PROS
Better cooperation across functions Improved decision making Increased flexibility better customer service

CONS
Two-boss system is susceptible to power struggles
Team meetings in the matrix are time consuming Requirements of adding team leaders can result in increased costs.

Better performance accountability

Improved strategic management

Emerging Organizational Structure

New organizing principles
1.Strong employee involvement 2. Authority based on capability 3. Teams 4.Mindfulness of environments, changes, patterns and themes

Network structure
It includes linking of numerous separate organizations to

optimize their interaction in order to accomplish a common overall goal.

Egs-construction companies

Team organization
No supervisors in the company.

The team is granted sufficient authority and access to

resources to produce their product

Team members develop their own process for identifying

and rotating members in managerial roles

Fishnet organization
Flexible organization design

Form and reform varied pattern of connection

Learning organization
Managers do not direct as much as they facilitate

workers. For a learning organization adaptive learning must be joined by generative learning. The manager of this type of organization requires high value on communication and a great deal of patience.

Why Do Structures Differ?

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 crossfunctional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making.

Mechanistic Versus Organic Models

Why Do Structures Differ?

Organization Size Strategy Technology Environment

Innovation
Strategy

Strategy
Imitation Strategy CostMinimization

Strategy Structure Relationship

Innovation
Organic : Loose Structure

CostMinimization
Mechanistic : Tight Control

Imitation
Mechanistic and Organic : Mix of loose with tight properties

Technology
Routine

Routine technologies are associated with tall, departmentalized structures and formalization in organizations.
Non routine

Customized Activities

Three- Dimensional Model Of Environment

Bharti Airtel

Tata Motors