This chapter provides an overview of organizational structure. Organizational structure refers to the rules, relationships, communication channels, and duties that allow members to work toward shared goals. Jobs are the building blocks of organizational structure. A job is defined as "a set of task elements grouped together under one job title and designed to be performed by a single individual." To obtain the most positive outcome, social and technical aspects of jobs in organizations must be optimized. This is socio-technical system design called. This way, jobs can be designed so that people are more motivated and satisfied, as well as perform better.
What are the different types of organizational structures?
Once jobs are specified, employees also need to understand reporting relationships and communication. Organizational charts provide important information about the power relationships and lines of communication built into an organization's structure. The most common organizational charts are:
- Functional organization: This structure organizes work into different functional areas or departments based upon specialized expertise. It organizes people into human resources, finance, accounting, marketing, and information systems. Large organizations have a chief executive officer (CEO) as well as a chief operating officer (COO). Vice presidents of the functional areas report to the CEO and COO. Because each area specializes in its work, this can cause silo mentality, where integration across functional areas is difficult.
- Product organization (service or brand organization): This structure organizes work into units that are responsible for producing specific products or services. This type of structure is often seen in large organizations with very different products known as conglomerates. Within each product area, there are managers and employees in the functional areas (human resources, finance, accounting, marketing, and production). Also, decision-making is faster. A disadvantage is that there is a lot of duplication of effort, because each product line has its own functional areas.
- Geographical organization: Such an organization organizes itself in different regions so that they are close to the customers. Disadvantages of this type of structure is that there is also a lot of duplication of effort and communication across units may be problematic.
- Matrix organization: Here, functions and projects are combined. This structure is well-suited for organizations that are engaged in research and development (R&D), advertising, or management consulting. There is less duplication of effort and employees are exposed to both projects and functions, as a result of which skills and knowledge of the organization expands. However, there may be conflict between the horizontal and vertical departments, because employees have to report to two managers. A matrix organization is therefore difficult to manage, and can be costly.
- Virtual organization: It is defined as "a temporary collection of enterprises that cooperate and share resources, knowledge, and competencies to better respond to business opportunities." This creates a quick response and flexibility with no long-term commitment to the project. However, communication is difficult, because they lack trust among partners and there is no commitment to an organizations and its mission.
What are dimensions of organizational design?
Organizational structures evolve over time. Organizational design is the process of constructing and adjusting an organization's structure to achieve its goals. It responds to an organization's business environment, which result in changes in strategy. Restructuring can encompass a broad range of changes, such as selling lines of business or making significant acquisitions, and changing the internal organization. Also, organizations can go through downsizing.
There are five dimensions of organizational design that can be used to describe most organization's structural elements:
- Specialization (division of labor): This occurs when jobs are narrowly defined and depend on unique expertise.
- Formalization: This refers to the amount of rules, regulations, and procedures an organization requires its employees to follow.
- Centralization: This occurs when most or all key decisions are made by an organization's top leadership.
- Standardization: This occurs when work is performed in a routine manner, following the same steps each time.
- Complexity: This describes the range of activities conducted within an organization.
Additional considerations for designing organizational structures are:
- Chain-of-command: This refers to the flow of authority in the organization. As the organization grows and becomes more complex, the leader's authority must flow down the organization to maintain order, control and organizational performance.
- Span of control: This is the number of direct reports each person has. It increases as one moves down the chain-of-command, but this is not always the case. Some organizations are flat and have large spans of control. A dotted-line relationship occurs when an employee provides useful information to a manager in a different part of an organization's structure.
What are forms of organizational structure?
Mintzberg modelled the organizational structure into different units. The top management is at the strategic apex and is supported by the technostructure and the support staff. The technostructure consists of analysts and the support staff provides advice and guidance. The strategic apex meets organizational goals by directing the operating core through the middle line management. The top management creates the missions, set goals, and delegates and controls the middle line managers. Middle managers translate the strategic plans into detailed action plans. Five general types of organizational structure may emerge:
- Simple structure: It is simple, flat and has few top managers. It is fast, flexible and lean. However, as organizations grow, decision-makers can become overwhelmed that they start making bad decisions.
- Machine bureaucracy: It is defined by its standardization. There are routine procedures and decision-making is centralized. Because procedures are analyzed by the technostructure, it is also known as a mechanistic structure. Advantages are that it organizes work efficiently and rely on economies of scale, therefore more units of a good or service is produced on a larger scale, with fewer input costs. But, work feels monotonous, conflicting goals can arise across departments, there is low intrinsic motivation and silo mentality.
- Professional bureaucracy: It consists of highly trained professionals and has decentralized decision-making. The professional organization is complex and has many rules and procedures. It is efficient and professionals have autonomy and power. However, professionals may resent being "micromanaged."
- Divisional form: If an organization has many different product lines and business units, there is typically a divisional structure. Advantages of this structure is that managers maintain control and accountability and top managers can focus on the "big picture." But, duplication of resources and conflict across divisions are obstacles that this structure has to deal with.
- Innovative adhocracy: It has loose rules, decision-making is decentralized and power is delegated to where needed. An innovative structure is flexible and it maintains a central pool of talent. Also, it can respond quickly to environmental change. Limitations are that there can be lots of conflict when authority and power are ambiguous and due to rapid changes, it is stressful for employees.
What are legal structures of organizations?
There are several forms of small business entities:
- Sole proprietorship
- Partnership
- Corporation
- Limited liability company (LLC): This is an hybrid form of partnership.
There are also varying levels of managers within organizational structures:
- Top management (C-Suite): This team includes the chief executive officer (CEO), chief operating officer (COO), chief financial officer (CFO), chief marketing officer (CMO), and chief diversity officer (CDO).
- Middle management
- Operating-level management
The roles of managers are shifting, but all three levels must align the goals as their level with the overall goals of the organization so that it will succeed.
Join with a free account for more service, or become a member for full access to exclusives and extra support of WorldSupporter >>
Summaries of Essentials of Organizational Behavior: An Evidence-Based Approach by Scandura - 3rd edition
- What is organizational behavior? - Chapter 1
- Does personality matter? - Chapter 2
- How do emotions and mood influence employees? - Chapter 3
- How do attitudes and job satisfaction influence the workplace? - Chapter 4
- Why do people not see eye to eye? - Chapter 5
- What makes a good leader? - Chapter 6
- How to use power in an organization? - Chapter 7
- How is motivation related to performance? - Chapter 8
- How to motivate employees? - Chapter 9
- How to empower a team? - Chapter 10
- What are the costs of workplace conflict? - Chapter 11
- How may communication affect organizations? - Chapter 12
- What is the impact of diversity on organizational behavior? - Chapter 13
- How does culture impact an organization? - Chapter 14
- How does change affect the organization? - Chapter 15
- What is the scientific method in organizational behavior? - Appendix 1
- What does the organizational structure look like? - Appendix 2
Contributions: posts
Spotlight: topics
Online access to all summaries, study notes en practice exams
- Check out: Register with JoHo WorldSupporter: starting page (EN)
- Check out: Aanmelden bij JoHo WorldSupporter - startpagina (NL)
How and why use WorldSupporter.org for your summaries and study assistance?
- For free use of many of the summaries and study aids provided or collected by your fellow students.
- For free use of many of the lecture and study group notes, exam questions and practice questions.
- For use of all exclusive summaries and study assistance for those who are member with JoHo WorldSupporter with online access
- For compiling your own materials and contributions with relevant study help
- For sharing and finding relevant and interesting summaries, documents, notes, blogs, tips, videos, discussions, activities, recipes, side jobs and more.
Using and finding summaries, notes and practice exams on JoHo WorldSupporter
There are several ways to navigate the large amount of summaries, study notes en practice exams on JoHo WorldSupporter.
- Use the summaries home pages for your study or field of study
- Use the check and search pages for summaries and study aids by field of study, subject or faculty
- Use and follow your (study) organization
- by using your own student organization as a starting point, and continuing to follow it, easily discover which study materials are relevant to you
- this option is only available through partner organizations
- Check or follow authors or other WorldSupporters
- Use the menu above each page to go to the main theme pages for summaries
- Theme pages can be found for international studies as well as Dutch studies
Do you want to share your summaries with JoHo WorldSupporter and its visitors?
- Check out: Why and how to add a WorldSupporter contributions
- JoHo members: JoHo WorldSupporter members can share content directly and have access to all content: Join JoHo and become a JoHo member
- Non-members: When you are not a member you do not have full access, but if you want to share your own content with others you can fill out the contact form
Quicklinks to fields of study for summaries and study assistance
Main summaries home pages:
- Business organization and economics - Communication and marketing -International relations and international organizations - IT, logistics and technology - Law and administration - Leisure, sports and tourism - Medicine and healthcare - Pedagogy and educational science - Psychology and behavioral sciences - Society, culture and arts - Statistics and research
- Summaries: the best textbooks summarized per field of study
- Summaries: the best scientific articles summarized per field of study
- Summaries: the best definitions, descriptions and lists of terms per field of study
- Exams: home page for exams, exam tips and study tips
Main study fields:
Business organization and economics, Communication & Marketing, Education & Pedagogic Sciences, International Relations and Politics, IT and Technology, Law & Administration, Medicine & Health Care, Nature & Environmental Sciences, Psychology and behavioral sciences, Science and academic Research, Society & Culture, Tourisme & Sports
Main study fields NL:
- Studies: Bedrijfskunde en economie, communicatie en marketing, geneeskunde en gezondheidszorg, internationale studies en betrekkingen, IT, Logistiek en technologie, maatschappij, cultuur en sociale studies, pedagogiek en onderwijskunde, rechten en bestuurskunde, statistiek, onderzoeksmethoden en SPSS
- Studie instellingen: Maatschappij: ISW in Utrecht - Pedagogiek: Groningen, Leiden , Utrecht - Psychologie: Amsterdam, Leiden, Nijmegen, Twente, Utrecht - Recht: Arresten en jurisprudentie, Groningen, Leiden
JoHo can really use your help! Check out the various student jobs here that match your studies, improve your competencies, strengthen your CV and contribute to a more tolerant world
1487 |
Add new contribution