Objective 5.03

 The process of structuring a business’s people, information, and technology to enable the business to achieve its goals and be successful  It is used to match the form of the organization as closely as possible to the purpose(s) the organization seeks to achieve.

 Span of control  Authority  Responsibility  Delegation  Chain of command  Accountability  Line authority  Staff departments

 Span of control  The range of employees who to report to a managerial position  Authority  The formally-granted influence of a position to make decisions, pursue goals and get resources to pursue the goals; authority in a managerial role may exist only to the extent that subordinates agree to grant this authority or follow the orders from that position

 Responsibility  The duty to carry out an assignment or conduct a certain activity  Delegation  Process of assigning a task to a subordinate along with the commensurate responsibility and authority to carry out the task

 Chain of command  The lines of authority in an organization, who reports to whom  Accountability  Responsibility for the outcome of the process

 Line authority  The type of authority where managers have formal authority over their subordinates' activities (the subordinates are depicted under the manager on a solid line in the organization chart); departments directly involved in producing services or products are sometimes called line departments  Staff departments  The type of authority where managers influence line managers through staff's specialized advice; departments that support or advise line departments are called staff departments and include, e.g., human resources, legal, finance, etc.

 Functional structures  Divisional structures  Lateral relations  Matrix structures

 Functional organizations contain specialized units that report to a single authority, usually called top management.  Referred to as functional units or areas, these specialized units contain personnel with various but related skills grouped by similarities.  Each functional unit handles one aspect of the product or service provided: information technology, marketing, development, research, etc.  Top management is responsible for coordinating the efforts of each unit and meshing them together into a cohesive whole.

 Use functional structures when the organization is small, geographically centralized, and provides few goods and services.functional structures  When the organization experiences bottlenecks in decision making and difficulties in coordination, it has outgrown its functional structure.

ADVANTAGES  Reduces duplication of activities  Encourages technical expertise DISADVANTAGES  Creates narrow perspectives  Difficult to coordinate

 Use a divisional structure when the organization is relatively large, geographically dispersed, and/or produces wide range of goods/services.divisional structure

 A type of organizational configuration that groups together those employees who are responsible for a particular product type or market service according to workflow.  The divisional structure of a business tends to increase flexibility, and it can also be broken down further into product, market, and geographic structures.

ADVANTAGES  Improves decision making  Fixes accountability for performance  Increases coordination of functions DISADVANTAGES  Hard to allocate corporate staff support  Loses some economies of scale  Fosters rivalry among divisions

 An organizational structure that facilitates the horizontal flow of skills and information.  It is used mainly in the management of large projects, drawing employees from different functional disciplines for assignment to a team without removing them from their respective positions.  Employees report day-to-day progress to the project manager. They continue to report to their department head.

 To adopt the matrix structure effectively, the organization should modify many traditional management practices.matrix structure

ADVANTAGES  Reinforces & broadens technical excellence  Facilitates efficient use of resources  Balances conflicting objectives of the organization DISADVANTAGES  Increases power conflicts  Increases confusion & stress for 2-boss employees  Impedes decision making

 A lateral structural arrangement consists of a decentralized structure in which departments work together to achieve a common goal rather than operate as separate and distinct entities.

 Use lateral relations to offset coordination problems in functional and divisional structures.lateral relations  When the organization needs constant coordination of its functional activities, then lateral relations do not provide sufficient integration. Consider the matrix structure.

 Dotted-line supervision  Liaison roles  Temporary task forces  Permanent teams  Integrating managers

 McNamara, C. (n.d.). Key concepts in the design of an organization. Retrieved June 11, 2012, from htm htm  Chun Wei Choo. (1995). Organizational structures. Retrieved June 11, 2012, from 30sharma/od2.htm 30sharma/od2.htm  Read more: divisional-structure.html#ixzz3rJHqvWSchttp:// divisional-structure.html#ixzz3rJHqvWSc