Traditional Organizational Structures Unit 5: Organizing

What is Organizing? Organizing - is the process of bringing people and resources together to work toward a goal Organizing creates structures to divide up the work, arrange the resources, and coordinate activities Organizing identifies who does what, who is in charge of whom, and how different parts of the business relate to and work with one another Organizing is one of the four fundamental functions of a manager along with leading, planning, and controlling

What is Organizational Structure? An Organizational Structure is a formal arrangement that shows how divisions, departments, functions, and people link together and interact These organizational workflows are depicted on a diagram called an organizational chart The organizational chart represents the way the organization is intended to function By examining the organizational chart of a business, there are certain things you should be able to learn: Work Responsibilities  Supervisory Relationships   Communication Channels  Levels of Management  

The Traditional Organizational Structure The traditional organizational structure is based on a hierarchy The vertical hierarchy shows the chain of command The horizontal element of the chart shows the different jobs or work specialization

Traditional Organizational Structures Departmentalization - The first decision in creating an organizational structure is to decide how to group people and jobs into work units Some common bases for grouping jobs together: function product Customer territory

Traditional Organizational Structures The four traditional organizational structures commonly used throughout the 20th century are: Functional Divisional Hybrid Matrix Many organizations today still use one of these traditional structures

Traditional Organizational Structures: Functional Structure In a functional structure, people performing similar tasks are grouped together Members of functional departments share skills, technical expertise, and responsibilities This structure works best in businesses that produce only one product or service

Traditional Organizational Structures: Divisional Structure In a divisional structure people, jobs, and activities are together based on: product produced or service provided process customer or client served geographic area

Traditional Organizational Structures: Hybrid Structure A hybrid structure combines different types of divisional structure in the same organization The larger the organization, the more likely it is that the organization will use a hybrid structure

Traditional Organizational Structures: Matrix Structure The matrix structure combines the functional and divisional structures The people in a matrix structure belong to two formal groups at the same time, a functional group and a project team This distinction means they report to two supervisors Matrix structures allow cross-functional teams to share expertise and information quickly to solve problems

Traditional Organizational Structures: Matrix Structure

Your Task Complete this chart (can be found in the S: drive) Advantages Disadvantages Functional Divisional Matrix