Organizational Structure and Design PDF

Organizational Structure and Design Organizational Structure The system which describes the organizational hierarchy in terms of different functions, roles, responsibilities, supervision, etc. It demonstrates different concerns including different roles of the employees, job descriptions, job...

Organizational Structure and Design Organizational Structure The system which describes the organizational hierarchy in terms of different functions, roles, responsibilities, supervision, etc. It demonstrates different concerns including different roles of the employees, job descriptions, job functions, decision- making authorities, reporting structure, allocation of tasks in the department, individuals, project team, branch, etc.  Organizational Design Refers to defining, designing, and re-structuring organizational structure. Aimed at finding any type of dysfunctional elements related to an organization’s system Can better fulfill an organization’s objective. 3 Organization Design It clarifies different aspects like authority, the responsibility of tasks and its limitations, reporting structure, a flaw of information, etc. Can identify and eliminate any kind of duplicity in work, inefficient work, poor customer dealing, blame games, obstacles in the decision-making process, shortfalls in systems, and processes which result in the decline of efficiency of the employees, lack of trust among superiors and subordinates, etc. 6/15/XX  Organizational Design vs Organizational Structure The organizational structure represents organizations in an immovable or static form that can be presented through a diagram, popularly known as “Organogram.” These diagrams or organization charts provide an easy interpretation of different functions of organizations and their relationships. Also, they show a hierarchy of the staff i.e. managers, leaders, other team members, and supervision levels. 5  Organizational Design vs Organizational Structure In contrast, the organizational design represents the dynamic view of an organization. It is more of processes and methods which help in organizational structuring and restructuring for smooth and effective functioning. 6 Elements of Organizational Design 1. Chain of Command / Line of Command 2. Span of Control 3. Centralization 4. Specialization 5. Formalization 6. Departmentalization  1. Chain of Command In this, the authority and power are delegated from top to bottom In an organization top management gives instructions to the bottom team and all the employees at each level. The accountability of an employee’s job flows upward to the management. It gives clarity of the reporting structure in an organization. 9 PITCH DECK 6/15/XX  2. Span of Control demonstrates how wide is the area of the direct control of supervisors over their subordinates which is directly related to how many subordinates (in numbers) report to a senior or supervisor; Depends on the number of tasks performed at different levels. In case of more tasks, the span of control will be wider. 6/15/XX 3. Centralization Refers to centralizing an organizational system where planning and decision-making authority is allotted either to a single person or the top management. A decentralized organization is the one where planning and decision- making are handed over to middle or low-levels. 6/15/XX  Centralized vs Decentralized 1. Centralized Structure Decisions & processes are defined and handled by the top management. Employees and managers are responsible for the successful implementation of decisions and have to follow them. The employees low in the chain of command play a minimal role in the process of decision-making. 12  Centralized vs Decentralized 1. Centralized Structure The power of decision- making is held at the top level There is a wide chain or hierarchy of managers and subordinates. Has a top-down approach for decision flow. Examples are Apple, McDonald’s 13  Centralized vs Decentralized 2. Decentralized Organization Structure In such type of organizations, day-to-day tasks and the decision-making processes are delegated to the supervisors at the middle and lower level by the top management for fast and effective decisions and to improve efficiency. By letting the middle and lower level executives jump in the process of decision-making, the top management can focus on other major decisions. This also increases the responsibility and accountability of the employees. 14  Centralized vs Decentralized 2. Decentralized Organization Structure For Example; Mark, the HR Manager at ABC Company, has to finalize a deal with a vendor at a job portal for hiring and, for this, he negotiates best prices with discounts to close the deal. If his organization is a centralized one, then he will first seek senior management permission to finalize the deal and wait for their approval. 15  Centralized vs Decentralized 2. Decentralized Organization Structure If there is a delay rendered by the management part, he might lose the deal. However, if his company is decentralized, then, he has authority to close the deal all by himself with the vendor without seeking any approval from the management which, in turn, results in finalizing cost-effective and quick decision- making. 16 Centralized vs Decentralized 6/15/XX 4. Specialization Large organizations divide some of its functions based on the specialized areas and, so, subtasks are defined in different tasks. These subtasks are distributed among individual job roles. 6/15/XX High Level Specialization No need to memorize the diagram 6/15/XX Low Level Specialization No need to memorize the diagram 6/15/XX 5. Formalization Refers to the process of specifying or mentioning rules, procedures, and duties to the employees as an individual as well as to the teams, departments, units, and the whole organization by managers in written form too. Formalization indicates the goals and vision of an organization, tasks, hierarchy and relationships, authority and responsibilities, different processes, and work methods. 6/15/XX 5. Formalization A formal organization emphasizes on job roles, responsibilities, and assigning work to the individuals as per the requirement of roles. These are controlled by rules and procedures. 6/15/XX 5. Formalization An informal organization emphasizes on individuals, and the job responsibilities are designed based on individual employee skills and preferences irrespective of the department in which he/she is working. An individual can be assigned the role of different departments as well based on self-interest, skills, etc. 6/15/XX Formal Organization No need to memorize the diagram 6/15/XX Informal Organization No need to memorize the diagram 6/15/XX 6. Departmentalization the process of dividing organizational functions into different departments as per specializations of jobs or responsibilities so that the common tasks can be handled by specialized teams. 6/15/XX 6. Departmentalization In rigid departmentalization, there is almost no interaction between different teams and each team works as per their area of specialization. In contrast, in loose departmentalization, the teams are free to interact with each other and can work together for common tasks. 6/15/XX Rigid departmentalization No need to memorize the diagram 6/15/XX Loose departmentalization No need to memorize the diagram 6/15/XX Types of Organizational Design and Structure 1. Line Organizational Structure and Design 2. Functional 3. Line and Staff 4. Divisional Organizations 5. Project-Based Organizations 6. Matrix Organizations 7. Hybrid Organizations