Organizational design and structure

1. Organization Design & StructureOrganization Design & Structure

2. Organizational structureOrganizational structure
The formal configuration between individuals and
groups with respect to the allocation of tasks,
responsibilities, and authorities within organizations.
The pattern of jobs and groups of jobs in an
organization.
A diagram representing the connections between the
various departments within an organization: a graphic
representation of organizational design –
Organizational Chart

3. Organizational DesignOrganizational Design
The process of coordinating the structural
elements of an organization in the most
appropriate manner.
The process by which managers create a specific
type of organizational structure and culture so
that a company can operate in the most efficient
and effective way.

4. Factors affecting Organizational Factors affecting Organizational
StructureStructure
Organizational
Structure
Environment
Technology
Strategy
Human
Resources

5. Key Design DecisionsKey Design Decisions
Division of Labor - Low
- High
Departmentalization - Homogeneous
- Heterogeneous
Span of Control - Less
- More
Authority - High
-Low

6. DIFFERENTIATIONDIFFERENTIATION
 Process of deciding how to divide the work in an organization.
Ensures that essential tasks are assigned to one or more jobs.
 Four Dimensions of Differentiation by Lawrence and Lorsch
1.Manager’s goal orientation
2.Time orientation
3.Interpersonal orientation
4.Formality of struscture
FORMS OF DIFFERENTIATION:
Horizontal Differentiation
 Vertical Differentiation
 Spatial Differentiation

7. HORIZONTAL DIFFERENTIATIONHORIZONTAL DIFFERENTIATION
 Differentiation between organizational subunits
 Based on employees’ specialization
 Increases with specialization and departmentalization
DEPARTMENTALIZATION
The process of breaking up organizations into coherent units.
Functional OrganizationFunctional Organization: The type of departmentalization based
on the activities or functions performed (e.g., sales, finance).
Product OrganizationProduct Organization: The type of departmentalization based on
the products (or product lines) produced.
Matrix OrganizationMatrix Organization: The type of departmentalization in which a
product or project form is superimposed on a functional form.

8. VERTICAL DIFFERENTIATIONVERTICAL DIFFERENTIATION
Difference in authority and responsibility in
organizational hierarchy
 Tall, narrow organizations-greater vertical
differentiation
 Flat, wide organizations-less vertical
differentiation
Tall structures have many levels of authority
relative to the organization’s size.
Flat structures have few levels but wide
spans of control.

10. SPATIAL SPATIAL
DIFFERENTIATIONDIFFERENTIATION

Geographic dispersion of offices, plants and
personnel
 Increase in no. of locations-increases complexity
but necessary
 May give organization political and legal
advantages in a country
Horizontal, vertical and spatial differentiation
indicate the width, height and breadth of an
organizational structural needs

11. INTEGRATIONINTEGRATION
Definition- The process of coordinating the
different parts of an organization.
Designed to achieve unity among individuals and
groups .
Supports a state of dynamic equilibrium - elements
of organization are integrated, balanced.

12. VERTICAL INTEGRATIONVERTICAL INTEGRATION
Hierarchical referral
Rules and procedures
Plans and schedules
Positions add to the organization structure
Management information system
HORIZONTAL INTEGRATIONHORIZONTAL INTEGRATION
Liaison roles
Task forces
Integrator positions
Teams

13. DESIGN DIMENSIONSDESIGN DIMENSIONS

14. Guide to designing structuresGuide to designing structures
How many tasks should a position contain?
How specialized should each task be?
Skills, ability, knowledge and training needed
for work?
Basis for grouping positions?
What should be the span of control?
How centralized or de-centralized should the
decision making power be?
How standardized should the work content be?
How large should each unit be?

15. ORGANIZATION IMPLICATIONSORGANIZATION IMPLICATIONS
External environment
Dynamic vs Stable environments
Complex vs Simple environments
Diverse vs Integrated environments
Hostile vs Munificent environments
Organizational size
Technology
Organizational Strategy

16. MINTZBERG’S MODEL – ORGANISATIONAL MINTZBERG’S MODEL – ORGANISATIONAL
STRUCTURESTRUCTURE

17. 5 Generic Structures – Simple 5 Generic Structures – Simple
StructureStructure
Little or no techno structure
Few support staffers
Loose division of Labor
Minimal differentiation among its units
Small managerial hierarchy

18. MACHINE BUREAUCRACYMACHINE BUREAUCRACY
Highly specialized, routine operating tasks
Very formalized procedures in the operating core
Proliferation of rules, regulations, & formalized
communication
Reliance on the functional basis for grouping tasks
Relatively centralized power for decision making
Elaborate administrative structure with sharp
distinctions
between line and staff.

19. PROFESSIONAL BUREAUCRACYPROFESSIONAL BUREAUCRACY
Relies for Coordination on
Standardization of Skills
Professionals are hired for the operating core.
Coordination between operating professionals is
handled by standardardization of skills and
knowledge.

20. DIVISIONALISED FORMDIVISIONALISED FORM
Semi Autonomous units
Horizontally Diversified Products and Services
In a straight forward, stable environment
Where Large economies of Scale do not apply

21. ADHOCRACYADHOCRACY
Highly Organised structure with,
Little formalization of Behaviour
Job Specialization
Group the Specialists into functional units
Reliance on liaison devices to encourage mutual
adjustment

22. THANK YOU.THANK YOU.