Organization

1
Organization

• An Organizational Perspective on Work

2
Organization

• A consciously coordinated social unit, composed
  of two or more people, that functions on a
  relatively continuous basis to achieve a common
  goal or set of goals.
• Groups of people who work interdependently toward
  some purpose.
• A managed system designed and operated to achieve
  a specific set of objectives.

3
Organizational Structure

• Defines how job tasks are formally divided,
  grouped and coordinated.
• The division of labor as well as the patterns of
  coordination, communication, work flow, and
  formal power that direct organizational
  activities.
• Reflects its culture and power relationships
  (McShane Glinow, 2000).

4
Fundamental requirements of organizational
structures

• The division of labor into distinct tasks.
• The coordination of that labor so employees are
  able to accomplish common goals.

5
Fundamental Concepts

• Differentiation
• Integration

6
Differentiation

• Internal environment created by job
  specialization and the division of labor.
• the work of the organization is subdivided into
  smaller tasks.
• different people or groups often perform specific
  parts of the entire task.

7
Integration

• Differentiated units are put back together so
  that work is coordinated into an overall product.
• Coordination would link the various parts of the
  organization to achieve the organizations
  overall mission.

8
Elements of Organizational Structure

• Vertical Structure
• authority in organizations
• hierarchical levels
• span of control
• delegation
• decentralization

9
Elements of Organizational Structure

• Horizontal structure (departmentalization)
• functional
• divisional
• matrix organizations

10
The vertical structure

• Authority in organizations
• The legitimate right to make decisions and to
  tell other people what to do.
• Authority resides in positions rather than in
  people
• Top to bottom

11
The vertical structure

• Span of control
• Number of people reporting directly to the next
  level in the hierarchy
• Narrow spans build a tall organization
• Wide spans create a flat organization

12
The vertical structure

• Delegation
• Assignment of authority and responsibility to a
  subordinate at a lower level.
• Responsibility means the assignment of a task
  that an employee is supposed to carry out
• Accountability means the expectation that
  employees perform a job, take corrective action
  when necessary, and report upward on the status
  and quality of their performance.

13
The vertical structure

• Decentralization
• The delegation of responsibility and authority
• In a centralized organization, important
  decisions usually are made at the top.
• In decentralized organizations, more decisions
  are made at lower levels.

14
The horizontal structure

• As the tasks of organizations become increasingly
  complex, the organization inevitably must be
  subdivided or departmentalized.
• Departmentalization specifies how employees and
  their activities are grouped together, such as by
  function, product, geographic location, or some
  combination.

15
The horizontal structure

• Functional structure
• Jobs and departments are specialized and grouped
  according to business functions and the skills
  they require production, marketing, human
  resources, research and development, finance,
  accounting and so forth.
• Organizations with functional structures are
  typically centralized to coordinate their
  activities effectively.

16
The Functional Structure

General manager
Sales and Marketing
Production
Finance
Internal Accounts
Collections
17
The horizontal structure

• Divisional structure
• Type of departmentalization that groups employees
  around outputs, clients or geographic areas.
• Divisional structures are sometimes called
  strategic business units because they are
  normally more autonomous than functional
  structures and may operate as subsidiaries rather
  than as departments of the enterprise.

18
The Divisional Structure

• IPS Industries

Detergents
Cosmetics
Food and Beverages
Household
Industrial
19
The horizontal structure

• Matrix Structure
• Matrix structures usually optimize the use of
  resources and expertise, making them ideal for
  project-based organizations with fluctuating
  workloads.
• Matrix structures focus technical specialists on
  the goals of serving clients and creating
  marketable products.

20
The Matrix Structure

• President

Finance
Marketing
Production
Central
Southern
Northern