1. The Organizational System
 Organizational Structure
 Organizational Designs

2. What is Structure?
 The degree of complexity, formalization and
centralization in the organization.
 Complexity is the degree of vertical, horizontal
and spatial differentiation in an organization
 Formalization is the degree to which jobs within
the organization are standardized.
 Centralization is the degree to which decision
making in concentrated at a single point in the
organization

3. Classical View of Structure
 Division of Labour – Specialization; breaking
jobs down into simple and repetitions tasks
 Unity of Command – a subordinate should have
only one superior to whom he or she is directly
responsible.
 Responsibility - an obligation to perform
 Line Authority – authority to direct the work of a
subordinate

4. Classical View of Structure……
 Chain of Command – the superior-subordinate
authority chain that extends from the top of the
organization to the lowest echelon
 Staff Authority – positions that support, assist
and advise line managers
 Span of Control – the number of subordinates a
manger can efficiently and effectively divert
 Departmentation: grouping of activities on some
common basis

5. Departmentation by Function
Plant Manager
Manger Manager Manger Manger Manager
Engineering Accounts Manufacturing Personal Purchase

6. Departmentalization by Product
President
VP VP
VP (Fuels)
(Lubricants & Waxes) (chemicals)
Marketing
Planning
Supply & distribution
Manufacturing

7. Departmentalization by Customer
Manager
Loans FEX SA TDR

8. Departmentalization by Geography
VP (Sales)
Sales Manager Sales Manager Sales Manager Sales Manager
Western Region Southern Region Northern Region Eastern Region

9. Departmentalization by Process
Plant Manager
Inspectio
packing
Cast Press Tube Finishing
&
Department Department Department Department
Shippin
Manager Manager Manager Manager
Dept
Manage

10. The coming of the New Organization
 Rapid and unexpected change
 Increasing diversity
 Change in managerial behaviour
 Adoption to computer technology

11. The Mechanistic Structure

12. The Mechanistic Structure……
 High horizontal differentiation
 Rigid hierarchical relationships
 Fixed duties
 High formalization
 Formalized communication channels
 Centralized decision authority

13. The Organic Structure

14. The Organic Structure…..
 Low horizontal differentiation
 Collaboration (both horizontal and vertical)
 Adaptable duties
 Low formalization
 Informal communication
 Decentralized decision authority

15. Why do Structures Differ?
 Strategy
Strategy Structural Option
Innovation Organic: loose structures; low
division of labour, low formalization,
decentralized.
Cost Mechanistic: tight control; extensive
minimizatio division of labour, high formalization,
n high centralization.
Initiation Mechanistic and Organic: mix of
loose and tight properties; tight
controls for current activities, loose
controls for newer undertakings.

16. Why do Structures Differ?.....
 Size
 Increase in the number of employees results in
• High complexity
• High formalization
• decentralization

17. Why do Structures Differ?....
 Technology
Unit Mass Process
Production Production Production
Structural Low vertical Moderate High vertical
characteristic differentiation vertical differentiation
Low horizontal differentiation Low
s
differentiation High horizontal
Low horizontal differentiation
formalization differentiation Low
High formalization
formalization
Most Organic Mechanistic Organic
effective

18. Technology…
Task variability
Few Exceptions Many Exceptions
Well-defined Routine Engineering
Problem 1 2
Analyzability 3 4
Craft Non routine
Ill-defined

19. Technology…
Input A B C D Output
A. Long-linked Technology
Transformational
Client A Process Client B
B. Mediating Technology
Resources
A
B Transformational
C
Output
Process
D
Feedback
C. Intensive Technology

20. Why do Structures Differ?.....
Stable
Environment
Abundant
simple Complex
Scarce
Dynamic
Three Dimensional Model of the Environment

21. Why do Structures Differ?...
 Power control
 An organization structure is the result of power
struggle by internal constituencies who are
seeking to further their interests

22. Mintzberg`s five design configurations
 The operating core: Employees who perform the basic
work related to the production of products and services
 The strategic apex: Top level managers who are
charged with the overall responsibility of the organization
 The middle level: Managers who connect the operating
core to the strategic apex
 The technosturcture: Analysts who have the
responsibility for effecting certain forms of
standardization in the organization
 The support staff: People who fill the staff units, who
provide indirect services for the organization

23. Basic Elements

24. Basic Subunits SubunitExample
positions from a manufacturing firm.
 Strategic Apex: Board of Directors, Chief
Executive Officer
 Techno structure: Strategic Planning, Personnel
Training, Operations Research, Systems
Analysis and Design
 Support Staff: Legal Counsel, Public Relations,
Payroll, Mailroom Clerks, Cafeteria Workers
 Middle Line: VP Operations, VP Marketing, Plant
Managers Sales Managers
 Operating Core: Purchasing Agents, Machine
Operators, Assemblers, Sales Persons,
Shippers

25. The Simple Structure
 Low complexity
 Low formalization
 Centralized authority

26. The Machine Bureaucracy
 High in complexity, formalization and
centralization
 Key part is technostructure

27. The Professional Bureaucracy
 Highin complexity, formalization
 Low centralization

28. The Divisional Structure
A set of autonomous units coordinated by
central headquarters

29. The Adhocracy
A structure characterized as low in
complexity, formalization centralization

30. The Matrix Structure
Programs Under Master’ Ph.D. Researc Executive Communit
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departments
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Accounting
Administrati
ve Studies
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Finance
Marketing
Matrix Structure for a College of Business Administration