Management Chapter 10: Organizational Structure Design

Organizing in an Organization

• The main purpose of organizing in an organization is to achieve efficiency and effectiveness by dividing tasks into manageable jobs and assigning them to individuals or teams.

Organizational Design

• Key elements in organizational design include:
  • Work specialization
  • Departmentalization
  • Centralization-decentralization
  • Chain of command
  • Span of control
• Organizational design does not include cost control as a key element.

Organizational Chart

• The purpose of an organizational chart is to visualize the structure of an organization, showing the relationships between different jobs and departments.

Departmentalization

• Types of departmentalization include:
  • Functional departmentalization (grouping jobs by functions or activities)
  • Product departmentalization (grouping jobs by product or service)
  • Geographical departmentalization (grouping jobs by location)
  • Customer departmentalization (grouping jobs by customer type)
• Product grouping is a form of departmentalization where jobs are grouped based on the product or service being produced.

Work Specialization

• Work specialization is the process of dividing tasks into smaller, more manageable parts to increase efficiency and productivity.
• Another term for work specialization is job specialization.
• Work specialization aims to achieve:
  • Increased efficiency
  • Improved productivity
  • Enhanced quality
  • Better job satisfaction
• Potential problems associated with overspecialization include:
  • Job boredom
  • Lack of job satisfaction
  • Decreased productivity

Centralization-Deцентраlization

• Centralization contributes to organizational design by allowing for more control and decision-making authority at the top of the organization.
• Decentralization contributes to organizational design by delegating decision-making authority to lower-level managers and employees.
• The centralization-decentralization continuum affects organizational design by influencing the distribution of authority and decision-making power.

Trends and Contributions

• Departmentalization contributes to work coordination by grouping jobs into manageable units and facilitating communication and collaboration.
• A popular trend in departmentalization is the use of cross-functional teams to improve communication and collaboration across different departments.
• Common ways of departmentalizing jobs include functional, product, geographical, and customer departmentalization.