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6ba - Mob - M2 - Organizational Structure

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20 views16 pages

6ba - Mob - M2 - Organizational Structure

mob notes

Uploaded by

JOSH BHAGOUTIE
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ORGANIZATIONAL STRUCTURE

An organizational structure is a system that outlines


how certain activities are directed in order to achieve
the goals of an organization. These activities can
include rules, roles, and responsibilities.

It defines activities such as task allocation, coordination, and


supervision
Organizational structure is the method by which work flows
through an organization.

It allows groups to work together within their individual functions


to manage tasks.

Traditional organizational structures tend to be more


formalized—with employees grouped by function (such as
finance or operations), region or product line.

Less traditional structures are more loosely woven and flexible,


with the ability to respond quickly to changing business
environments.
The organizational structure details how certain activities are
delegated toward achieving an organization's goal.

It outlines an employee's role and various responsibilities


within a company.

The more authority employees have, the higher up they'll be


on the organizational structure.

In addition, the more organized a structure is, the more


efficiently a company operates.
Benefits of organizational structures

● Faster decision making


● Multiple business locations
● Improved operating efficiency
● Greater employee performance
● Eliminates duplication of work
● Reduced employee conflict
● Better communication
1. FUNCTIONAL STRUCTURE

Also known as the bureaucratic organizational structure, functional


structure is based on functions. It means that similar jobs and
responsibilities are categorized into groups and departments. This
structure is commonly seen in small and medium-sized businesses
and is fairly popular. For example, most businesses have finance,
marketing and human resources departments, all categorized under
similar functions.
2. DIVISIONAL STRUCTURE

As the name suggests, a divisional structure is the integration of


independent units. Such structures are fairly common in large and
complex industries, which deal with diverse products and services. Put
simply, various teams work towards a single goal in a divisional
structure. For example, a Fast-Moving Consumer Goods (FMCG)
organization will produce different kinds of products including sauce,
noodles, spices and so on. While every branch will have an
independent function with its own set of executives and managers,
everyone will work towards a common objective of making a sale.
3. FLAT STRUCTURE

Often referred to as a flatarchy, a flat structure is one where the


organization has little to no levels of management. It’s ideal for
small organizations with few employees. You’ve probably seen
startup businesses implement a flat structure. It provides people
with plenty of autonomy and this further allows for speedy
implementation of business decisions. As everyone has the
opportunity to think out loud and contribute to problem-solving
processes, morale increases and there’s more room for
communication and collaboration.
4. MATRIX STRUCTURE

A combination of various organizational structures is known as the


matrix structure. In this type, someone may have duties in multiple
departments. Employees can have different managers, divisions
and/or departments—at the same time. For example, you may be
working with and reporting to two managers simultaneously—a
project manager along with a functional manager. While it’s a
good way of expanding one’s skills and expertise, it’s one of the
most confusing structures, hence least preferred too.
Organizational Chart
An organizational chart is a diagram that visually conveys a
company's internal structure by detailing the roles, responsibilities,
and relationships between individuals within an entity.
Organizational charts are alternatively referred to as "org charts" or
"organization charts."
Key Elements of Organizational Structures

Five elements create an organizational structure: job design,


departmentation, delegation, span of control and chain of command.
These elements comprise an organizational chart and create the
organizational structure itself.

"Departmentation" refers to the way an organization structures its jobs


to coordinate work. "Span of control" means the number of individuals
who report to a manager. "Chain of command" refers to a line of authority.
The company's strategy of managerial centralization or
decentralization also influences organizational structures.

"Centralization," the degree to which decision-making authority is


restricted to higher levels of management, typically leads to a pyramid
structure. Centralization is generally recommended when conflicting goals
and strategies among operating units create a need for a uniform policy.
"Decentralization," the degree to which lower levels of the hierarchy have
decision-making authority, typically leads to a leaner, flatter organization.
Decentralization is recommended when conflicting strategies, uncertainty or
complexity require local adaptability and decision-making.
Types of Organizational Structures

Organizational structures have evolved from rigid, vertically integrated,


hierarchical, autocratic structures to relatively boundary-less, empowered,
networked organizations designed to respond quickly to customer needs with
customized products and services.

Today, organizations are usually structured vertically, vertically and


horizontally, or with open boundaries. Specific types of structures within each of
these categories are the following:

● Vertical—functional and divisional.


● Vertical and horizontal—matrix.
● Boundary-less (also referred to as "open boundary")—modular, virtual and
cellular.
Staff and line are names given to different types of functions in
organizations.
A "line function" is one that directly advances an organization in its
core work. This always includes production and sales, and
sometimes marketing.[1]

A "staff function" supports the organization with specialized advisory


and support functions. For example, human resources, accounting,
public relations and the legal department are generally considered to
be staff functions

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