Organizational Design and Management Concepts
Posted on Feb 10, 2025 in Business Administration and Management (BAM)
Key Concepts of Organizational Structure
- Definition of Organization: Grouping and ordering activities to achieve goals, establishing administrative units, functions, authority, and responsibility.
- Stages of Organization: Division of labor, hierarchy, departmentalization, job description, and coordination.
- Organizing Techniques: Analysis of positions, organizational charts, and manuals.
- Definition of an Organizational Chart: A graphical representation of a company’s organizational structure, showing hierarchical levels, departments, and communication between them.
- Definition of an Administrative Manual: Documents that serve as a means of communication and coordination, recording and transmitting information, guidelines, and instructions within an organization.
- Definition of Job Analysis: Obtaining information about positions, focusing on content, appearance, and the conditions that surround them.
- Types of Organization:
- Linear or Military: Decision-making is concentrated in a single person who makes all decisions and has the primary responsibility for command.
- Functional or Taylor: Divides work and establishes expertise so that each person, from manager to worker, performs the minimum number of functions.
- Lineo-Functional: Combines linear and functional organization types, preserving the functional specialization of each activity and the linear authority transmitted through a single head for each function.
- Staff: No line authority; provides advisory information and lacks the power to impose decisions.
- Committee: Allocates various administrative issues to a group of people who meet to discuss and decide collectively.
- Matrix: Combines product departmentalization with functional departmentalization, abandoning the principle of unity of command (one boss).
- Principles of Organization:
- Objective: All activities must be linked to business objectives.
- Specialization: An individual’s work should be confined to a single activity for greater efficiency and skill.
- Hierarchy: Centers of authority from which communication originates to achieve plans.
- Parity of Authority and Responsibility: Each level of responsibility must have a corresponding degree of authority.
- Unity of Command: Identifying a single chief authority; subordinates should not report to more than one boss.
- Dissemination: The duties and responsibilities of each position must be published and documented.
- Span of Control: There should be a limit on the number of subordinates reporting to an executive.
- Coordination: Equilibrium between units of an organization and its functions.
- Continuity: The company must maintain, improve, and adjust constantly.
- Definition of Reorganization: Restructuring an organization, changing work units or departments, or creating new departments to optimize resources and improve efficiency.
- Definition of Downsizing: Reduction of employees to rationalize resources and improve performance.
- Definition of Upsizing: Increase of personnel within an organization, expanding its structure.
- Definition of Rightsizing: Finding the optimal size of the organization, aligning its structure with the need for product and service quality.
