1. STRUCTURAL COMPONENTS & ORGANIZATION DESIGNS

2. Organization Design – A Definition
Used to manage the total organization
the overall pattern of structural
components and arrangement .

3. Research on Organizational Design
There are three popular approaches to the
study of organizational design:
The researcher attempts to relate the
behavior of individuals to such phenomena
as organization structure and various
applications of the principles.

4. Research on Org Design II
2. The researcher attempts to explain the
features of organizational structures and the
principles of organization theory.
3. The researcher conducts comparative
research which is concerned with the
similarities, dissimilarities and consequences
of various organization structures and
approaches to designing organizations.

5. An Organization Chart

6. The Organization Chart – What it Shows
Organization charts convey five major points about an
organization’s structure:
1. Activities of the organization: the chart as a whole
indicates the range of activities in which the
organization is involved.
2. Subdivisions of the organization: each box represents
a subdivision of the organization responsible for a portion
of the work.
3. Type of work performed: the label in each box indicates
the department’s area of responsibility.

7. The Organization Chart – What it Shows II
4. Levels of management: the chart shows the management
hierarchy; all persons who report to the same individual
are on the same management level, or horizontal level on
the chart.
5. Lines of Authority: the lines that connect the boxes show
the official lines of authority and channels of
communication for the organization.

8. The Organization Chart – What it Doesn’t Show
There are a number of things the organization chart does not
show about the firm:
Degree of responsibility and authority of individuals;
Degree of decentralization that exists;
Staff and line functions;
Position status or importance;
Lines of actual communication;
Relationships among members; and
7. The ‘informal’ organization.

9. The Chain of Command

10. Line Organization Chart

11. Line & Staff Organization Chart

12. Functional Authority in a Line-Staff Organization

13. Fully-Developed Functional Authority in a Line-Staff Organization

14. Personal Staff vs Professional Staff

15. Structural Components

16. Span of Control Span of Control is the number of
employees who report to a single
manager or supervisor.

17. Height of the Hierarchy
The hierarchy describes who reports to whom and the span of control of each manager. The hierarchy is depicted by the vertical lines on the organization chart.
The hierarchy is related to the span of control. When spans are narrow the height of the hierarchy will be large (tall). When spans are wide, the height of the hierarchy will be low (flat).

18. Span of Control - Illustration

19. Factors Influencing the Span of Control
Competence of supervisor and subordinates
Physical dispersion of subordinates
Extent of non-supervisory work in manager’s job
Degree of interaction required
Extent of standardized procedures
Similarity of tasks being performed
Frequency of new problems
Preferences of supervisors and subordinates

20. James Worthy – Sears, Roebuck
In 1950, James Worthy, an early behaviorist studied the
Sears store network. He found that there were two distinct
types of stores present in the network: tall and flat.
Metropolitan stores: larger, many employees, many staff,
and large inventory.
Rural stores: small, few employees, little/no staff, and
modest inventory.

21. Worthy/Sears, continued
Tall stores were characterized by relatively high turnover among employees, significant numbers of grievances, low employee morale.
Flat stores were characterized by low rates of turnover, few grievances, and moderate morale.

22. Organizational Design Forms

23. Simple Organization

24. Characteristics of Simple Organizations
Small
Flat
Highly Centralized
Very Flexible
Fast

25. Departmentalization Departmentalization is the lateral (horizontal)
differentiation of the organization in departments.
Departments are organizational units that share
a common supervisor and common resources,
are jointly responsible for performance, and tend
to identify and collaborate with one another.

26. Bases of Departmentalization
Organizational function
Product
Process
Geography or territory
Customer

27. Criteria for Relative Advantages of Alternative Departmentalization Bases
Which approach (basis) permits the maximum
use of special technical language?
Which provides the most efficient utilization of
machinery and equipment?
Which provides the best hope of obtaining the
required control and coordination?

28. Functional Structure
Functional structure is a design that groups similar or
related occupational specialties together.

29. Advantages of Functional Departmentalization
Promotes skill specialization
Reduces duplication of resources and coordination problems within the functions
Enhances career development within departments
Superiors & subordinates share common expertise
Promotes high-quality technical problem solving

30. Disadvantages of Functional Departmentalization
Emphasizes routine tasks
Reduces communication between departments
May create conflict over product priorities
Can make scheduling difficult across departments
Focuses on departmental as opposed to organizational issues
Develops managers who are experts in narrow fields

31. Strengths of Functional Departmentalization
Best in a stable environment
Best in small-medium sized organizations
Best when only one/few products or services
Economies of scale within functional groups

32. Weaknesses of Functional Departmentalization
Slow response time to environmental changes
Less innovation
“Tunnel vision” on organizational goals
Decisions may pile up at top: hierarchy overload

33. Fully Implemented Functional Design