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Org Structure
Orgstructurecanbedefinedastheframeworkoftasks,reporting&authorityrelationshipswithinwhich anorgfunctions.Thebuildingblocksfordesigninganorgstructureconsistofsixelements.

Work Specialization
Workspecializationordivisionoflaborreferstothedegreetowhichactivitiesintheorgaresubdivided intoseparatejobs.Theessenceofworkspecializationisthatratherthananentirejobisbeingdonebyone individual,itisbrokendownintoanumberofstepswitheachstepbeingcompletedbyaseparate individual.Inessence,individualsspecializeindoingpartofanactivityratherthantheentireactivity. Improvesemployeeproductivityandspeeduptheprocessofproductioninanorg. Costeffectivetotrainemployeesinasinglesubtask. Allowsorgtoallocatetaskstoemployeesdependingontheirabilities.Thisresultsinimproved employeeproductivityandefficiencyinorg. Beyondacertainpoint,workspecializationsleadstoadeclineinproductivityandefficiencysince employeesgetboredandexperiencefatigueandstresswhentheyperformrepetitivetasksforan extendedperiodoftime. Orgtoprovideemployeestheopportunitytoperformavarietyofactivitiestoavoidthemonotonythat resultfromexcessiveworkspecialization.Thiscanbedonebyincreasingthescopeoftheirjobsor throughjobrotation.

Departmentalization
Theprocessinwhichjobsaregroupedtogethertobringcoordinationamongtheorgtasksiscalled departmentalization.Thejobsaregroupedonthebasisofeitherfunction,product,process,geographyor customer.

FunctionalDepartmentalization Groupsjobsaccordingtofunction. Efficienciesfromputtingtogethersimilarspecialitiesandpeoplewithcommonknowledgeand orientation. Indepthspecialization. Poorcommunicationacrossfunctionalteams. Limitedviewoforggoals. GeographicalDepartmentalization Groupsjobsaccordingtogeographicregion. Moreeffectiveandefficienthandlingofspecificregionalissues. Servesneedsofuniquegeographicmarketsbetter. Duplicationoffunctions. Canfeelisolatedfromotherorgareas. ProductDepartmentalization Groupsjobsbyproductline. Allowspecializationinparticularproduct&services. Managerscanbecomeexpertsintheirindustry. Closertocustomers. Duplicationoffunctions. Limitedviewoforggoals. ProcessDepartmentalization Groupsjobsonthebasisofproductorcustomerflow. Moreefficientflowofworkactivities. Canonlybeusedwithcertaintypesofproductsorservices. CustomerDepartmentalization Groupsjobsonthebasisofspecificanduniquecustomerswhohavecommonneeds. Customersneedsandproblemscanbemetbythespecialists. Limitedviewoforggoals. Onepopulardepartmentalizationtrendistheincreasinguseofcustomerdepartmentalization.Because gettingandkeepingcustomersisessentialforsuccess,thisapproachworkswellbecauseitemphasizes monitoringandrespondingtochangesincustomersneeds. Anotherpopulartrendistheuseofteams,especiallyasworktaskshavebecomemorecomplexand diverseskillsareneededtoaccomplishthosetasks.Onespecifictypeofteamthatmoreorganizationsare usingisacrossfunctionalteam,whichisaworkteamcomposedofindividualsfromvariousfunctional specialties.

Chain of Command
Thechainofcommandisthelineofauthorityextendingfromupperorglevelstolowerlevels,which clarifieswhoreportstowhom.Chainofcommandiscloselylinkedtotheconceptsofauthority, responsibilityandunityofcommand. Asuperiorsrighttogiveorderstohissubordinatesandtheobligationsofthesubordinatestoactaccording tothoseinstructionsisreferredtoasauthority.Managersareprovidedwithauthoritytoenablethemto carryouttheresponsibilitiesentrustedtothembytheorg. Accordingtotheconceptofunityofcommand,anemployeeshouldreporttonotmorethanonesuperior. Theviolationofthisrulecanleadtoconfusionandconflictinorg. Whenmanagersusetheirauthoritytoassignworktoemployees,thoseemployeestakeonanobligationto performthoseassignedduties.Thisobligationorexpectationtoperformisknownasresponsibility. Assigningworkauthoritywithoutresponsibilityandaccountabilitycancreateopportunitiesforabuse. However,modernorgdonotstrictlyfollowtheseconcepts.Inmanymodernorg,anemployeeatthe operationlevelcancommunicatedirectlywithaseniormanageriftheneedarises.Also,employeesneed nolongerwaitfortheirsuperiorstogivetheminstructionssincetheyareempoweredtotakedecisions wheredelayindecisionmakingcouldaffecttheorginterests.

Span of Control
Spanofcontrolreferstotheratioofmanagerstoimmediatesubordinates.Thenumberofsubordinates whoaredirectlyunderthecontrolofamanagerdiffersfromorgtoorg. Inorghavingtallstructures Spanofcontrolisverysmall. Thisallowsmanagerstoexercisetightcontrolovertheirsubordinates. Butthenumberoflayersofmanagementissohighthatitleadstoacomplexorgstructure. Ascommunicationpassthroughseverallayers,themessagegetdistortedandthechancesof employeereceivingaccurateinformationislow. Decisionmakingisverylowinorgwithtallstructures. Tallstructureprovidesanopportunityforhighlevelofinteractionbetweenthemanagerand subordinates. Foraflatstructureorg Largespanofcontrol Largenumberofsubordinatesunderamanagermakemanagementmoredifficult. Simpleorgstructure. Smoothflowofcommunicationthatenableemployeetoreceiveinformationquicklyand accurately. Fastdecisionmakingduetolimitednumberoflayers.

Thecontemporaryviewofspanofcontrolrecognizesthatthereisnomagicnumber.Manyfactors influencethenumberofemployeesthatamanagercanefficientlyandeffectivelymanage.Thesefactors includetheskillsandabilitiesofthemanagerandtheemployees,andthecharacteristicsoftheworkbeing done.Forinstance,managerswithwelltrainedandexperiencedemployeescanfunctionwellwithawider span.Othercontingencyvariablesthatdeterminetheappropriatespanincludesimilarityandcomplexityof employeetasks,thephysicalproximityofsubordinates,thedegreetowhichstandardizedproceduresarein place,thesophisticationoftheorganizationsinformationsystem,thestrengthoftheorganizationsculture, andthepreferredstyleofthemanager. Thetrendinrecentyearshasbeentowardlargerspansofcontrol,whichisconsistentwithmanagers effortstospeedupdecisionmaking,increaseflexibility,getclosertocustomers,empoweremployees,and reducecosts.

Centralization / Decentralization
Thetermcentralizationreferstothedegreetowhichdecisionmakingisconcentratedatasinglepointin theorg.Typically,itissaidthatiftopmanagementmakestheorgkeydecisionswithlittleornoinputfrom lowerlevelpersonnel,thentheorgiscentralized.Incontrast,themorethatthelowerlevelpersonnel provideinputoractuallygiventhediscretiontomakedecisions,themoredecentralizationthereis. Inadecentralizedorg,actioncanbetakenmorequicklytosolveproblems,morepeopleprovideinputsinto decisions,andemployeesarelesslikelytofeelalienatedfromthosewhomakethedecisionsthataffect theirworklives. Tomakeorgmoreflexible&responsive,therehasbeenamarkedtrendtowarddecentralizingdecision making.Inlargecompanies,lowerlevelmanagersareclosertotheactionandtypicallyhavemore detailedknowledgeaboutproblemsthantopmanagers.

Formalization
Formalizationreferstothedegreetowhichjobswithintheorgarestandardized.Ifthejobishighly formalized,thenthejobincumbenthasaminimumamountofdiscretionoverwhatistobedone,whenisto bedoneandhowitistobedone.Employeescanbeexpectedalwaystohandlethesameinputinexactly

thesamewayresultinginaconsistentanduniformoutput.Thereareexplicitjobdescriptions,lotsoforg rulesandclearlydefinedprocedurescoveringworkprocessinorginwhichthereishighformalization. Standardizationnotonlyeliminatesthepossibilityofemployeesengaginginalternativebehaviorsbutit evenremovestheneedforemployeestoconsideralternatives. Thedegreeofformalizationcanvarywidelybetweenorgandwithinorg.Certainjobsarewellknownto havelittleformalization. Althoughsomeformalizationisnecessaryforconsistencyandcontrol,manyorganizationstodayrelyless onstrictrulesandstandardizationtoguideandregulateemployeebehavior.

Simple Structure
Afirmwithasimpleorgstructurehasawidespanofcontrol,fewdepartments,centralizedauthorityanda lowdegreeofformalization.Simplestructuresareeasilymanagedastheyhaveonlyafewlevelsof hierarchy.Insimplestructures,thedecisionmakingpowerfortheentireorgisvestedinoneperson. Thesimplestructureisaflatorgitusuallyhasonly2or3verticallevels,aloosebodyofemployeesand oneindividualinwhomthedecisionmakingauthorityiscentralized. Simplestructureisgenerallyusedinsmallorglikeretailstoresandsmallconsultancies.Insuchstructure, employeeshaveclearreportingrelationships,decisionmakingisfast,maintenancecostsarelowandrules areflexible.Butthistypeofstructureisnotsuitableforlargeorg. Moreover,astheentirepowerandauthorityisconcentratedinasinglepersonatthetop,deathordisability ofthepersonislikelytohaveanegativeimpactonthebusiness.

Bureaucracy
Thisisastructurewithhighlyroutineoperatingtasksachievedthroughspecialization,veryformalizedrules andregulations.Underthisstructure,tasksaregroupedunderfunctionaldepartmentswithcentralized authorityandnarrowspanofcontrol. Theprimarystrengthofbureaucracyliesinitsabilitytoperformstandardizedactivitiesinahighlyefficient manner.Bureaucraciescangetbynicelywithlesstalentedandhencelesscostlymiddle&lowerlevel managers.Thepervasivenessofrulesandregulationssubstituteformanagerialdiscretion.Standardized operationscoupledwithhighformalizationsallowdecisionmakingtobecentralized.Thereislittleneedfor innovativeandexperienceddecisionmakersbelowthelevelofseniorexecutives. Themajordrawbackofthisstructureistheobsessiveconcernwithfollowingtherules.

Matrix Structure
Matrixisastructurethatassignsspecialistsfromdifferentfunctionalareastoworkonprojectswhothen

returntotheirareaswhentheprojectiscompleted.Projectisastructureinwhichemployeescontinuously workonprojects.Asoneprojectiscompleted,employeesmoveontothenextproject. Themainadvantagesarefluidandflexibledesignthatcanrespondtoenvchangesandfasterdecision making. Majordisadvantagesarecomplexityofassigningpeopletoprojects,task&personalityconflicts.

Team Structure
Astructureinwhichtheentireorgismadeupofworkgroupsorteams.Theprimarycharacteristicsis thatitbreaksdowndepartmentalbarriersanddecentralizesdecisionmakingtothelevelofthework teams.Teamstructurealsorequireemployeestobegeneralistswewellasspecialist. Underthisstructure,employeesaremoreinvolvedandempowered.Thisstructurealsoreducesthe barriersamongfunctionalareas.Majordisadvantagesarepressureonteamstoperform.

Virtual Organization
Virtualorghavecreatednetworksofrelationshipsthatallowthemtocontractoutmanufacturing, distribution,marketingoranyotherbusinessfunctionforwhichmanagersfeelthatotherscandobetteror morecheaply.Themajoradvantagetothevirtualorgisitsflexibility.Theprimarydrawbacktothis structureisthatitreducesmanagementscontroloverkeypartsofitsbusiness.

Boundaryless Organization
Anorgthatseekstoeliminatethechainofcommand,havelimitlessspanofcontrolandreplace departmentswithempoweredteams. Byremovingverticalboundaries,managementflattensthehierarchy.Statusandranksareminimized. Crosshierarchicalteams,participativedecisionmakingpracticesanduseof360degreeperformance appraisalsarecommoninsuchorganizations. Horizontalboundariescanbeeliminatedbyreplacingfunctionaldepartmentswithcrossfunctionalteams andtoorganizeactivitiesaroundprocess.Anotherwaytocutthroughhorizontalbarriersistouselateral transfers,rotatingpeopleintoandoutofdifferentfunctionalareas.Thisapproachturnsspecialiststo generalists. Whenfullyfunctional,theboundarylessorgalsobreaksdownbarrierstoexternalconstituentslike suppliers,customers,regulatorsetcandbarrierscreatedbygeography.Globalization,strategicalliances, telecommutingetcareexamplesofpracticesthatreduceexternalboundaries.

Why Do Structures Differ?

StrategyThepurposeoforgstructureistomeetorgobjectives,whicharederivedfromoverall strategy.Ifmanagementmakessignificantchangesinstrategy,thestructurewillalsoneedtobe modifiedtoaccommodateandsupportthischange.Foraninnovationstrategydemandsanorganic orgstructurewhereascostminimizationstrategydemandaamechanisticstructure. OrgSizeLargeorgtendtohavemorespecialization,moredepartmentalization,morevertical levelsandmorerules&regulationsthanasmallorg. TechnologyTechnologytendtotowardeitherroutineornonroutineactivities.Routinetasksare usuallyassociatedwithtallerandmoredepartmentalizedstructures. EnvironmentThemorescarce,dynamicandcomplextheenv,themoreorganicastructure shouldbe.Themoreabundant,stableandsimpletheenv,themoremechanisticstructurewillbe preferred.

Implication For Managers