Organizational Structures

Posted on Dec 6, 2024 in Social sciences

Organizational Role: Identification and classification of activities; division of process work for better productive contribution; and design of structure (who does the work, who is responsible, and management—which is relationship coordination).

Principle Division and Specialization: The technical division organizes production, breaking down time and activities into tasks. This increases productivity and efficiency. Coordination of tasks is needed for effective contribution.

Organizational Principles:

  • Authority and Hierarchy: The right to direct (capital owners) is delegated to managers; there is a clear line of authority (top management → middle management → operational management → employees).
  • Control Unit Principle: Each person depends on one head, with clear and definite assignments.
  • Centralization and Decentralization: Decisions are made at one central point, or power is distributed (decentralized) to managers who are better prepared and can give better orders.
  • Delegation of Authority: Assigning a task and delegating authority to a subordinate, conferring responsibility.
  • Field of Control
  • Motivation and Participation

Organizational Thinking:

Classics:

  • Taylor: Scientific methods: decompose and rationalize; systematic study of work, time, and movement to create standards; separation of worker and direction; functional organization; selection of qualified personnel; incentive remuneration; and performance control. Reception was positive but criticized by union workers for its conception of the individual as a machine wanting to make money.
  • Fayol: The policy function is important (providing, organizing, commanding, coordinating, and controlling—technical, commercial, financial, security, etc.). Hierarchical organization; workers receive orders from only one chief; other principles include division of work, subordination of individual to general interest, fair remuneration, and benevolent treatment.

Human Relations: People are motivated by other factors (self-esteem, group integration, etc.).

  • Elton Mayo: Changes such as work music and breaks, and lighting changes had positive effects on productivity, morale, and reduced fatigue; fostering a spirit of partnership; highlighting human factors and social relations.
  • Contributions of Psychology and Sociology: Industrial satisfaction; psychology of motivation; sense of belonging in the informal organization; and the influence of informal relations on the formal organization.

Departmentalization Criteria:

  1. Functional: Groups according to core functions (e.g., marketing: market research, advertising, promotion, sales).
  2. Geographic: Corporations operating across a large territory, physically dispersed.
  3. Product or Service: Groups of different product lines (e.g., electrical, computer, and office furniture).
  4. Customer and Channel Distribution: Different clients (e.g., a cosmetics company selling to department stores and pharmacies).
  5. Production Processes: (e.g., cars or textiles). These can be combined.

Formal-Informal Organization:

Formal: Planned; defines activities, authority, and responsibility; obligation to respect this structure.

Informal: Communication independent of formal relationships; group norms; assumed roles; informal leaders who exert significant influence.

Organization = formal + informal.

Organization Chart:

A graphic representation of the organizational structure, informing members of their position and external relationships.

Requirements: Accuracy, clarity, simplicity, and up-to-date information.

Types of Relationships: Hierarchical (reporting) and staff (support/advice).

Organization Chart Classes:

  • By Purpose: Information technology (overview) and analytical (full details).
  • By Extension: General (global view), partial or departmental (part of a department).
  • By Content: Structural (large units), functional (functions/duties of each unit), and personal (name and position).
  • Forms: Vertical (top-down), concentric (outside-in), horizontal (left-to-right).

Types of Organizational Structures:

  • Linear/Hierarchical: Direct authority from the head; each worker accountable to a single leader. Advantages: Clarity of authority, direct orders. Disadvantages: Managers handle many activities; rigid structure. Suitable for small businesses.
  • Functional: Specialists at various levels; subordinates receive orders from various commanders (each a specialist). Advantages: Specialization. Disadvantages: No single control unit; less discipline; confusion in task execution; coordination problems.
  • Linear-Functional (Line and Staff): Combines the previous two; direct authority relationships with specialist advice. Advantages: Control unit, specialization. Disadvantages: Consultations slow decisions and increase costs.
  • Committee: Shared decision-making and responsibility. Advantages: Decisions made by multiple people. Disadvantages: Slow decisions.
  • Matrix: Various specialists collaborate on specific projects. Advantages: Flexibility for projects requiring different departments. Disadvantages: Potential coordination problems.
  • Multidivisional: Autonomous organizational units coordinated by a central decision unit.
  • New Models (Trefoil, Network, etc.):