Presentation on theme: "Organizational Structures"— Presentation transcript:
1 Organizational Structures Dr Fred Mugambi MwirigiJKUAT
2 IntroductionOrganizational designing and structuring are key components of organizational planningGood structures must be flexible and adaptive yet predictable with regard to the support they offer organizational operationsFirms must take time to study their operations in order to develop structures that reflect and respond to the needs of their organizations
3 Centralization & Decentralization Structures reflect various degrees of centralization or decentralization of operationsCentralization- authority to make important decisions is retained by managers at the top of the hierarchyDecentralization- authority to make important decisions is delegated to managers at all levels in the hierarchy
4 What Is an Organizational Structure? An illustration showing how job tasks are formally divided, grouped, and coordinated.Also called an organogram
5 Questions to consider when Structuring To what degree are articles subdivided into separate jobs?On what basis will jobs be grouped together?To whom do individuals and groups report?How many individuals can a manager efficiently and effectively direct?Where does decision-making authority lie? decentralizationTo what degree will there be rules and regulations to direct employees and managers?
6 Key pillars of organizational structuring Work specializationDepartmentalizationAuthority vs responsibilityChain of commandUnity of commandSpan of controlCentralization vs decentralization
7 Work SpecializationThe degree to which tasks in the organization are subdivided into separate jobs.Makes efficient use of employee skillsIncreases employee skills through repetitionLess between-job downtime increases productivitySpecialized training is more efficientAllows use of specialized equipment
8 Departmentalization The basis by which jobs are grouped together. Activities grouped by:FunctionProductGeographyProcessCustomer
9 Authority Balance Authority The rights inherent in a managerial position to give orders and to expect the orders to be obeyed.Chain of CommandThe unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom.Unity of CommandA subordinate should have only one superior to whom he or she is directly responsible.
10 Span of ControlThe number of subordinates a manager can efficiently and effectively direct.Concept:Wider spans of management increase organizational efficiency.Narrow Span Drawbacks:Expense of additional layers of management.Increased complexity of vertical communication.Encouragement of overly tight supervision and discouragement of employee autonomy.
11 Centralization vs decentralization The degree to which decision making is concentrated at a single point in the organization.DecentralizationThe degree to which decision making is spread throughout the organization.FormalizationThe degree to which jobs within the organization are standardized.
12 Factors That Influence Structure StrategyOrganization SizeTechnologyEnvironment
13 Common Organization Designs Simple StructureA structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization.
14 Common Organization Designs (cont’d) BureaucracyA structure of highly operating routine tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command.
15 The Bureaucracy Strengths Functional economies of scale Minimum duplication of personnel and equipmentEnhanced communicationCentralized decision makingWeaknessesSubunit conflicts with organizational goalsObsessive concern with rules and regulationsLack of employee discretion to deal with problems
16 Matrix StructureA structure that creates dual lines of authority and combines functional and product departmentalization.Key Elements:Gains the advantages of functional and product departmentalization while avoiding their weaknesses.Facilitates coordination of complex and interdependent activities.Breaks down unity-of-command concept.
17 Matrix Structure 4/24/2017 17 17 CEO V ice President Engineering FinancePurchasingSales andMarketingResearch andDevelopmentProduct AManagerProduct BProduct CProduct DProduct TeamTwo-boss employee4/24/20171717
18 Modern Design Options Team Structure The use of teams as the central device to coordinate work activities.Characteristics:Breaks down departmental barriers.Decentralizes decision making to the team level.Requires employees to be generalists as well as specialists.Creates a “flexible bureaucracy.”
19 Virtual OrganizationA small, core organization that outsources its major business functions.Highly centralized with little or no departmentalization.Advantage: Provides maximum flexibility while concentrating on what the organization does best.Disadvantage: Reduced control over key parts of the business.
20 Mechanistic Vs Organic Structures Mechanistic ModelA structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization.Organic ModelA structure that is flat, uses cross-hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making.