1. 6-1
CHAPTER 3
BEYOND ORGANIZATIONAL
STRUCTURES

2. 6-2
Introduction
 Organization
structure determines who
works together
 It
is the way managers design their firms to
achieve their organization’s mission and goals
 Organizational
communication flows
through its structure, which affects:
 behavior
 human
relations
 performance

3. 6-3
The transition from an economy based on
materials to an economy based on flows of
information has created considerable
challenges for organizational structure, and
communication.

4. 6-4
Principles of Organization (1 of 3)
1. Principle of Objective 


Objective of Org as an Entity –
Objective of Each of its Subsidiaries –
Objective of Each of its departments –
2. Unity of Actions –

All efforts should be coordinated towards the
objective of the org
3. Division of Work –

Division of labor, or work specialization – refers
to the degree to which tasks are subdivided into
separate jobs

5. 6-5
Principles of Organization (1 of 3)
4 . Principle of Authority –

Necessary authority to control the activites of
various departments should be delegated
properly. Defined, Precise and Accurate
5. Principle of Responsibility—

Where there is Authority responsibility should
also be assigned
6. Principle of Unity of Command –
 Chain
of command and reporting should be clear
and precise.

6. 6-6
Principles of Organization (2 of 3)
7. Span of Management
 refers
to number of employees reporting to a
manager
8. Principle of Flexibility
 Structure
should be flexible to adapt to changes
9. Principle of Balance –
 Structure
should balance all activities and prev
principles.
10. Development of Personal Ability –
 Sufficient
scope for people to grow

7. 6-7
Principles of Organization (3 of 3)
11. Principle of Communication - Effective
Communication system should be there
for proper functioning of org.

8. 6-8
Creating an organization
Consideration
Of
Objective
Product
Divisional
Customer
Territory
Matrix

9. 6-9
Formal Organization Structure
Vertical downward
communication
President
Vice President
Production
Vice President
Finance
Vice President
Marketing
Vertical upward
communication
Manager
A
Manager
B
Manager
C
Manager
D
Manager
E
Exhibit 6.2
Manager
F
Manager
G
Manager
H
Manager
I

10. 6 - 10
Informal Organization Structure
Horizontal
communication
networks
President
Vice President
Production
Manager
A
Manager
B
Vice President
Finance
Manager
C
Manager
D
Manager
E
Exhibit 6.2
Vice President
Marketing
Manager
F
Manager
G
Manager
H

11. 6 - 11
Contemporary Organization Design
Learning
Organizations
Virtual
Organizations
Team Organizations
and
Reengineering
Boundaryless
Organizations
E-Organizations

12. 6 - 12
Organizational Communication
communication – the
compounded interpersonal communication
process across an organization
 Communication flows in an organization are:
 Organizational
 Vertical
 Horizontal
 Grapevine
(multidirectional)

13. 6 - 13
Vertical and Horizontal
Communication
Vertical Communication
 The flow of information
both up and down the
chain of command
 Formal communication
 Recognized as official
 Status and power are not
equal among participants
in vertical
communication
•
•
•
•
Horizontal
Communication
The flow of
information between
colleagues and peers
Informal
communication
Does not follow the
chain of command
Not recognized as
official

14. 6 - 14
Grapevine Communication
– the informal vehicle through
which messages flow throughout the
organization
 “When the grapevine allows employees to
know about a management decision almost
before it is made, management must be
doing something right.”
 Grapevine

15. 6 - 15
Communication Networks
networks – sets of
employees who have stable contact through
which information is generated and
transmitted
 Two major types of communication networks:

1. within organizations

2. within departments and small groups
 Communication

16. 6 - 16
Message Transmission Channels
Oral Communication
Written
Communication
Nonverbal
Communication

17. 6 - 17
Oral Communication Media
Face-to-Face
Telephone
Meetings
Presentations

18. 6 - 18
Written Communication (1 of 2)
 With
increased use of e-mail, managers
substitute face-to-face communication with email
 Communication Objective Guidelines
 Memos
 Letters
 Reports
 Bulletin
board notices
 Posters
 Computers/e-mail
 Fax

19. 6 - 19
Written Communication (2 of 2)
 Writing


skills
Grammar – rules for use of the eight parts of
speech
To simplify grammar, we use subjects,
predicates, modifiers, and connectives

20. 6 - 20
Nonverbal Communication
Facial
Expressions
Vocal
Qualities
Gestures
Posture

21. 6 - 21
Span of Control

Definition
It is the number of subordinates a
manager can direct efficiently and
effectively.

22. 6 - 22
Factors (span of Management)









Ability of Manager
Nature and importance of Job
Communication Network
The complexity of tasks
The physical proximity of employees
The degree of standardization of work procedures
The strength of the organization’s value system
The sophistication of the organization’s MIS
The preferred managing style of managers

23. 6 - 23
Recent Trends
(Span of Management)





Increasing Decentralization
Increasing Size of Org
Requirement of efficient and quick decision
making
Advancement in communication technology
Wider span of management

24. 6 - 24
Authority and Responsibility




Definition
Line authority and staff authority
How do authority and power differ?
The types of power

25. 6 - 25

Authority:
It is the rights inherent in a managerial position
to give orders and expect subordinates to be
obeyed.

Responsibility:
It is an obligation to perform assigned activities.

Power:
It is an individual’s capacity to influence
decisions.

26. 6 - 26
Line Authority and Staff Authority

Line authority entitles a manger to direct the work of
an employee.
A manager with line authority has the right to direct the
work of employees and to make certain decisions without
consulting anyone


Staff authority is used to support, assist, and advise
the holders of line authority.
Whether a manager’s function is classified as line or
staff depends on the organization’s objectives.

27. 6 - 27
Exhibit6-3 Line Versus Staff Authority
Line authority
Executive
Director
Assistant to the
Executive Director
Staff authority
Director of
Human
Resources
Director of
Operations
Director of
Purchasing
Unit 1
Manager
Other
Human
Operations Purchasing
resources
Other
directors
Unit 2
Manager
Other
Human
Operations Purchasing
resources

28. 6 - 28
The Types of Power





Coercive power: power on fear.
Reward power: power based on the ability to
distribute something that others value.
Legitimate power: power based on one’s position
in the formal hierarchy.
Expert power: power based on one’s expertise,
special skills, or knowledge.
Reference power: power based on identification
with a person who has desirable resources or
personal traits.

29. 6 - 29
Centralization Versus Decentralization



Centralization is a function of how much decisionmaking authority is pushed down to lower levels in
an organization; the more centralized an organization
is, the higher is the level at which decisions are made.
Decentralization refers to the pushing down of
decision-making authority to lowest levels of an
organization.
Centralization-decentralization is not an either-or
concept. It’s a degree phenomenon.

30. 6 - 30
How to Create a Horizontal Corporation

31. 6 - 31
Centralization

Centralization
 Early stages of organizational growth
 Period of Emergency
 In order to provide proper integration
 In case where managerial talent happens to be in
short supply.

32. 6 - 32
Decentralization – Merits







Reduces problem of communication
Eases burden of chief executive.
It facilitates product diversification
Improvement in morale and motivation
Permits better quicker decision making
Competitive climate in the org environment
Leads to effective control

33. 6 - 33
Decentralization – Demerits




Pressure on Managers
Helpless in case of emergency
Creates problem of coordination
Degree of Decentralization -



History n age,
Size & Type
Approach of Top Management
External Factors

34. 6 - 34
The Pendulum Swings

In the Industrial Age, the top-down controlled
hierarchies of centralized organizations were
dominant.
In our Information or Knowledge Age, inspired by
the decentralized structure of the Internet, a swing
toward loosely connected networks or cells is
becoming more common.The immediate future
suggests a flood of hybrid organizations that will
change our view of organizational structure and
leadership. Here's some examples of each type of
organization...

35. 6 - 35
Some Examples

36. 6 - 36
Centralized








Spiders
Dictatorship
Military
Government
Television
Typical Corporation
General Motors
Microsoft

37. 6 - 37
Decentralized








Starfish
Our Brain
The Internet
Alcoholics Anonymous
Apache Indians
Terrorist Cells
Open Source Software
Peer to Peer Software

38. 6 - 38
Fusion







Wikipedia
Craigslist
Toyota
Skype
Ebay
GE

39. 6 - 39
The Five Ways to Departmentalization





Functional departmentalization
Product departmentalization
Customer departmentalization
Geographic departmentalization
Process departmentalization

40. 6 - 40
Grounds of Departmentalization





Co-ordination (Task n process)
Control (Facilitates Admin Control)
Org Devlopment
Autonomy
Evaluation

41. 6 - 41
Basis of Departmentalization






Cost Factor
Specialization
Coordination
Control
Attention to local condition
Consideration of Human Element in relation
to technical

42. 6 - 42
Dhruv Lakra and the Mirakle Courier
- a tale of new India
The new generation of young entrepreneurs in India
are creating new directions for business
opportunities as well as social responsibility. Dhruv
Lakra, an MBA graduate from Oxford
startedMirakle Couriers, a courier company with a
difference which employs only deaf and dumb
youths. A courier service requires minimal use of
speech and hearing, which is why Dhruv thought of
starting this business for the specially abled
people.

43. 6 - 43
Dhruv Lakra and the Mirakle Courier
- a tale of new India
Barring the 4 management staff, all employees
are hearing disabled. He has 2 branches in
Mumbai and already plans to go pan India in
the long run. In his own words Dhruv stated
a moving tale of how he got this idea: "Once
upon a time, Dhruv was sitting on a bus next
to a young boy looking eagerly out the
window. In fact he was not just eager but
actually being very restless. He was looking
around anxiously, seeming slightly lost.

44. 6 - 44
Dhruv Lakra and the Mirakle Courier
- a tale of new India
Dhruv asked him where he was going but the boy did
not respond. It took him a few seconds to realise
that this boy was unable to hear or speak. He was
deaf. Though the bus conductor regularly
announced the stops this boy still did not know
where he was. Dhruv took out a piece of paper and
wrote to him in Hindi asking him where he was
going. Through the back and forth pen and paper
exchange, it suddenly dawned on Dhruv how
difficult life was for the deaf.

45. 6 - 45

46. 6 - 46
Dhruv Lakra and the Mirakle Courier
- a tale of new India
Something as straightforward as a bus became a
struggle...It is an invisible disability. You can not
know when someone near you is deaf as there are
no obvious physical attributes, and so its totally
ignored. It is also a silent (voiceless) disability.
There is very little public sympathy for the deaf,
and by connection, a severe lack of government
support for them in India. Particularly when it
comes to employment there are no opportunities
because no one has the patience or the foresight
to learn deaf language and culture. This is how
Mirakle Couriers was born...

47. 6 - 47
Dhruv Lakra and the Mirakle Courier
- a tale of new India
Over the next few months Dhruv spent time exploring the deaf
culture and learning Indian Sign Language. He focused on
a courier business because it requires a lot of visual skills
but no verbal communication. The deaf are extremely good
at maps reading, remembering roads and buildings
because they are so visually inclined...Over the last two
years Mirakle Couriers has grown to operate in 2 Branches
in the city, employing 70 deaf employees and delivering
over 65,000 shipments per month. We have won
several awards including the 2009 Hellen Keller award and
the 2010 National Award for the Empowerment of People
With Disabilities."

48. 6 - 48
Common Types of
Departmentalization (2 of 4)
 Functional
Departmentalization
 involves
organizing departments around essential
input activities, such as:
production and operations
 finance and accounting
 marketing and sales
 human resources

 Product
(Service) Departmentalization
 involves
organizing departments around goods
and services provided

49. 6 - 49
Common Types of
Departmentalization (3 of 4)
 Customer
Departmentalization
 involves
organizing departments around the
needs of different types of customers with unique
needs calling for different sales staffs and
products
 Divisional
Departmentalization (M-Form)
 the
firm develops independent lines of business
that operate as separate companies, all
contributing to the corporation profitability
 Territory
(Geographic) Departmentalization
 involves
organizing departments in each area in
which the enterprise does business

50. 6 - 50
Common Types of
Departmentalization (4 of 4)
 Matrix
Departmentalization
 combines
the functional and product
departmental structures
 Combination
 many
large companies have more than one form
of departmentalization