Understanding Organizational Structures

Organization Definition

• A system of consciously coordinated activities or forces involving two or more persons, as defined by Charles Barnard.

Characteristics of an Organization

• A social entity with a collective goal linked to an external environment.
• Responsibilities are dispensed among personnel.
• A formal interrelationship is established among personnel.

Origin of the Word "Organization"

• Derived from the Greek word "organon", which comes from "ergon", meaning "organ" for a particular task.

Legal Types of Organizations

• Corporations
• Governments
• Non-governmental organizations
• Armed forces
• Charities
• Not-for-profit organizations
• Partnerships
• Cooperatives
• Universities

Common Characteristics of Organizations

• Coordination of effort: Individuals who join and coordinate their mental and physical efforts can achieve significant outcomes.
• Common goal or purpose: Coordination of effort requires a mutual agreement to strive for a common interest, providing a "rallying point" for members
• Division of labor: Allows members to specialize tasks and become more proficient.
• Hierarchy of authority: Authority provides the right to direct others' actions.
• Clear hierarchy of needed for effective coordination.
• Daily contact: The owner or manager maintains daily contact, establishes policies, and assigns jobs.

Organizational Management

• Involves planning, organizing, leading, and controlling organizational efforts and resources to achieve goals.
• It requires constant decision-making.
• No single leadership style is universally effective.
• Skills and experience, the type of work, and the organizational environment influence effectiveness.
• Planning is important to reaching objectives and should be undertaken at every stage of development.
• Planning should occur on a broad scale, then be refined to different levels.

Communication

• Structure and communication patterns significantly affect decision accuracy.
• Standard Patterns
  • Chain
  • Wheel
  • Star
  • All-channel
• Organizational structure arranges people and jobs for work performance and goal achievement.

Group Size

• Small - Frequent face-to-face communication.
• Larger - Delegation of tasks.

Alternate Organizational Structures

• Product
• Function
• Geographical

Organizational Structure in Management

• Optimizes employee effectiveness and productivity.
• Different structures are used to achieve various tasks.

Types of Organizational Structures

• Autocratic
  • Vertical structure of leadership.
  • Top-down executive decisions.
  • Subordinates do not offer suggestions.
  • Common in military, law enforcement, and trade jobs.
• Democratic
  • Horizontal structure: equal access and involvement.
  • Open-door management encourages subordinate input.
  • Commonly found in retail, tourism, and food industries.
  • Leaders gain information from employees but retain decision responsibility.
• Laissez Faire
  • Stems from the French expression "to not interfere with the affairs of others."
  • Team management approach.
  • Teams are given specific tasks and decision-making power.
  • Managers ensure work is satisfactory for upper management.

Management Effects of Organization

• Brings business inputs to greater effectiveness or productivity.
• Involves grouping similar operations to save time and effort.

Management Structure definition

• Facilitates coordination and control over company activities.
• The structure depends on company purposes, business nature and size.
• Personnel - Necessary to delegate responsibility.
• Authority, duties, responsibilities, fixed duties should be clear to all.

Line of Responsibility and Authority

• Everyone in a company should know who they are responsible to.
• Indistinct lines lead to issues throughout the organization.
• Seek authority and evade responsibility must work together.

Delegation of Authority

• Delegation of authority involves dividing authority and powers downwards to subordinates.
• Allows others to do parts of a managers job.
• Defining Authority - Subdivision and sub-allocation of powers to achieve effective results.

Elements of Delegation

• Authority
  • Power and right to use and allocate resources to achieve objectives.
  • Right to give commands and orders.
  • Flows from top to bottom.
  • Should be equal with responsibility.
• Responsibility
  • Duty to complete assigned tasks.
  • Flows from bottom to top.
  • Person held responsible must be answerable for their job.
  • Bound for praise or answerable based on job performance.
• Accountability
  • Means giving explanations for any variance in the actual performance from the expectations set
  • Cannot be delegate
• For delegation, a manager must
  • Assign of tasks and duties
  • Grant authority
  • Create responsibility and accountabiltiy
• Delegation on authority is the base of manager to subordinate relationship.

Differences Between Authority and Responsibility

• Authority
  • Legal right to command subordinates
  • Attached to a superior's position
  • Can be delegated to a subordinate
  • Flows from top to bottom
• Responsibility
  • Obligation to perform assigned work
  • Arises from the superior-subordinate relationship
  • Cannot be shifted and is absolute
  • Flows from bottom to top

Importance of Delegation

• Managers can divide and allocate workload.
• Helps managers work on important areas like planning and business analysis.
• Can concentrate energy on important and critical issues.
• A process which grounds superior-subordinate relationship.
• Organization functions as authority flows from senior to junior.
• Gives room and space for subordinates to flourish their abilities and skill.
• Can give subordinates of importance and motivated to work.
• Delegation of authority is help to both superior and subordinates.
• Effective results leads to more departments and divisions working.

Principles of Delegation

• Managers should be able to results expected from them.
• Principle of Parity of Authority and Responsibility
  • They go hand in hand.
  • Independence and power to carry out the task effectively
• Principle of absolute responsibility
  • Authority can be fixed
• Principle of authority level
  • Exercise his authority within the jurisdiction

Classification of Organizations

• Structure of well defined jobs bearing a measure of authority and responsibility achieve goals.
• Informal Organization
  • Network of personable and social relationship
  • Relationships are built on things like feelings and emotions
  • Types of organization
    • Principle one for all sizes

Line Organization

• The simplest form of structure
• A framework which is complex but can be to need arise.
• Assumes a direct straight line
• Responsibility and count from the genera and straight.

Line and Staff Organization

• Recognize that a small number of executives
• Appoint assistants to the executives.
• Delegate them

Function organization

• Organization has been divided to put the top specialist throughout the market.
• We can define the system business

Line and Functional Staff

• Through this organization
• Given the responsibility and authority
• In consultation with the line organization
• Internal and shipping

Organizational Designs and Structures

• There is absolutely to almost types have some degree of structure and design
• Designs is to develop or change an organizations structure
• Work specialization - Tasks in an organization are divided into separate jobs.
• Departmentalization - The basis by which groups together or work activities.
• There are common forms of departmentalization
• Functional
  • Groups jobs by functions performed
  • Key functions
    • HR purchasing

Product

• The group and mark product
• Have the area expertise