Abe Lesson Two Organizational Structures

ABE LESSON TWO
ORGANIZATIONAL STRUCTURES
 An organizational structure is a pattern of relationships among positions in an
organization and among members of the organization (Laurie Mullins)
 An organization is also defined as the sum total of the ways in which it divides its labour
into distinct tasks and then achieves coordination among them ( Henry Mintzberg)
 The way in which interrelated groups of an organization are constructed (G.A. Cole)
DETERMINANTS OF ORGANIZATIONAL STRUCTURES

The common ones are;
-The mission
-Strategic objectives
-Type of Business entity
-Technology
-The size of the organization
-Geographical dispensation
-The environment
-The organizational culture
-Ownership
SIGNS OF INEFFECTIVE STRUCTURES

The following are clear signs that an organization is not effectively structured;
-slow decision making process
-Slow response time
-Interdepartmental conflict due to duplication of roles
-Slow and ineffective communication
-Lack of accountability
-High labour turnover among junior skilled staff (usually due to lack of development
opportunities)
SPAN OF CONTROL
 It is also known as span management
 It is simply the number of subordinates directly managed
 Or a measure of the number of employees who report to one superior
 For instance, if four individuals report to one superior, then the span of control is four
 According to Henry Fayol, an effective span of control should be restricted to between 3
and 6
 However, what determines the span of control an organization adopts are;
-Levels of skills and training among subordinates
-Clarity and effectiveness of delegation
-Uniformity and clarity of plans
-Existence of sound objectives
-Levels of face to face interactions required for tasks to be carried out
i)NARROW SPAN OF CONTROL

> This involves a few individuals reporting to the superior
>Arguments in favor of a narrow span of control include;
-Tighter control of organizational activities
-Improved communication
-Better co ordination
-Proper utilization of resources
-Reduced need for superiors to delegate
ii)WIDE SPAN OF CONTROL

>This involves an increased number of subordinates reporting to one superior
>the following are arguments for a wide span of control;
-Efficient use of managerial time
-More discretion for subordinates adding to their job satisfaction
As for which type is better than the other, there are additional factors which may include the
following;
Managers capabilities
Managers workload
Capabilities of subordinates
Nature of technology and tasks
Dynamics of team working
Geographical dispensation
SCALAR CHAIN
 Organizations always have a chain of command and authority
 Henry Fayol described scalar chain as the vertical arrangement of direct authority and
responsibility
 The length of the chain is the number of levels of authority which form an organizations
hierarchy
 From the CEO to the least individual
CENTRALIZATION
 It is a system of administration where only a few individuals make decisions
 Authority is kept to the top
 It is usually associated with tall structures
Advantages
Unity of purpose
Corporate integrity is easily managed
Procedures are easily standardized
Top management can easily resolve department conflict
Disadvantages
Decision making takes time
There is slow response time
DECENTRALIZATION
 It is the exact opposite of a centralized system
 It is a system of governance where units of the same organization, located in different
areas are managed almost independently
 Individuals managing these units are given an opportunity to plan and control their
affairs in line with corporate objectives.
Advantages
It reduces pressure on senior management
It encourages initiative
Stimulates job satisfaction
It enhances managerial abilities at lower level
Disadvantages
Independence from central authority can lead to working against corporate policy
It heavily relies on the effectiveness of lower management
Extensive training of lower managers translates into a cost
DIFFRENTIATION
 It cannot be separated from issues related to the structure of an organization
 It is the extent to which tasks and the work of individuals, groups and units are divided
within the organization
 It is simply division of labour
 As the organization grows, there is need to arrange the individuals in an organization
according to areas of specialization
INTEGRATION
 It is the required level to which units in an organization are linked together
 It involves synchronizing activities of all units in the organization
 Effective integration involves application of rules and procedures
 It is the quality or the state of collaboration that exists among departments
TRADITIONAL ORGANIZATIONAL STRUCTURES

1. FUNCTIONAL STRUCTURES
 Tasks are grouped together according to common areas of specialization
 Depending on the size of the organization, these could be departments, divisions etc.
 They are very common in manufacturing organizations
Advantages
i. It promotes division of labour according to areas of specialization
ii. Encourages team work and coordinated effort among members
Disadvantages
i. Only convenient for large organizations
ii. There is need to hire qualified and experienced staff which comes at a cost
2. GEOGRAPHICAL STRUCTURES
 A geographically based organization tends to produce decentralized activities
 Some theorists have argued that this type causes additional control problems for
management
Advantages
It can cover a broad geographical area
Very convenient for large organizations
Disadvantage
Standardization of processes can be difficult
The organization needs dependable managers to manage its units
3. PRODUCT BRAND OR CUSTOMER STRUCTURE
 A product based structure is structured according to the services or products the
organization produces.
 It leaves room for diversification to take place
 Very convenient in cases where technology is a challenge
 Each general manager can promote their product as they see fit
Advantages
It is possible for an organization to produce products that are not related at all
It is possible for an organization to operate in different markets at the same time
It encourages diversification
Disadvantages
The organization must invest in totally unrelated forms of technology
Managing different products at the same time can be a challenge
The capital base must be solid
4. MATRIX STRUCTURES
 It is a system of management operating both horizontally as well as vertically
 It is possible an individual to report to a departmental manager as well as a project
manager
 All organizations use multi- disciplinary groupings comprised of men and women from
different functional areas
 An example of a scenario that can make an organization adopt such a structure
include;
a. Setting up a disciplinary committee which handles all related issues
Advantages
Conflicts among departments related to authority are exposed
It promotes interdepartmental coordination
Flexibility is encouraged
Depts. have deeper insights into activities of other units.
Disadvantages
There is potential conflict among managers
Increased stress associated with competing and conflicting demands
Increased inefficiency due to unclear or ambiguous responsibilities
5. HYBRID STRUCTURES
 They are a combination of more than one type
 They enable an organization exploit the benefits associated with each type of structure
adopted
Advantages
An organization can only pick positives of different structures
It is possible to form a structure which is convenient for the owners
It allows diversification
Disadvantages
- It may not be easy to manage
- Designing one workable structure may be a challenge

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ABE LESSON TWO

DETERMINANTS OF ORGANIZATIONAL STRUCTURES

SIGNS OF INEFFECTIVE STRUCTURES

i)NARROW SPAN OF CONTROL

ii)WIDE SPAN OF CONTROL

TRADITIONAL ORGANIZATIONAL STRUCTURES

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