Organizational Structure and Importance

Organizing: The Structure of an Organization

• Organizing is the process arranging work among members to achieve the organization's goal.
• It details work arrangement, working conditions, and division into manageable components.
• Organizing comprises two elements: components (people, tasks, resources, authority, responsibility, procedures, and goals) and relationships connecting them.
• Organizational structure is the formal tasks assigned, reporting lines (authority), and coordination systems.

Importance of Organizing

• Organizing enables efficient task performance.
• It facilitates information and resource access.
• It aids avoiding wasted time in teamwork.
• Advantages include specialization (division of labor into units), well-defined jobs, clarification of authority, coordination among departments, and effective administration.

Formal and Informal Organizations

• Formal organizations have clearly defined roles, authority, and accountability.
• Formal organizations establish a structure for individuals working toward a common, legal purpose.
• Informal organization involves interpersonal relationships outside of formal structures, having no defined channels of communication.

Work Specialization

• Work specialization, or division of labor, is the subdivision of tasks into separate jobs.
• Employees perform jobs relevant to their assigned roles.
• Specialization can increase efficiency.

Chain of Command

• Chain of command defines clear authority lines.
• Unity of command: each employee reports to only one manager.
• Scalar principle: a clear authority line from lowest to highest individual in the organization.

Span of Management

• Span of management is the number of employees reporting to a supervisor.
• Factors influencing span of management include work stability, similarity of tasks, experience of subordinates, and direction availability.

Centralization and Decentralization

• Centralization involves decision-making concentrated at higher organizational levels.
• Decentralization pushes decision-making to lower organization levels.

Departmentalization

• Departmentalization groups positions into departments based on various criteria.
• Approaches include functional (similar activities), product (around products or groups), customer (responds to customer groups), location (geographic areas), and matrix (dual-chain of command). Team and virtual network are newer approaches.

Other Organizational Concepts

• Customer departmentalization: organizational structures interacting with specific customer groups. Location departmentalization groups jobs by geographic locations. Matrix approach involves dual-chain of command, and teams enable cross-departmental cooperation and quick decision-making. Virtual network structure relies on outside resources.

Guidelines for Effective Organizing

• Each person reports to only one supervisor.
• Clearly defined authority lines and responsibilities.
• Few levels of authority, and managers accountable for subordinates.
• Appropriate specialization and established span of control.