Organizational Structure

1st element of structure: chain of command means

,

Answer to the question “Who reports to whom?” and signifies formal authority relationships.

2nd element of structure: span of control means

Represents how many employees each manager in the organization has responsibility for.

3rd element of structure: centralization means

Refers to where decisions are formally made in organizations.

• who makes the decisions

4th element of structure: formalization means

The degree to which rules and procedures are used to standardize behaviors and decisions in an organization.

• how are decisions made

Mechanistic means

efficiency (typically strict)

Organic means

flexibility and adaptability

1st common organization structure

simple structure

1st common organization structure: simple structure means

An organizational form that features one person as the central decision-making figure.

2nd common organization structure

Bureaucratic structure

2nd common organizational structure: Bureaucratic structure means

An organizational form that exhibits many of the facets of a mechanistic organization.

structures that fall beneath Bureaucratic structure

1. product structures

2. geographic structures

3. client-based structures

4. matrix structures

structures that fall beneath Bureaucratic structure: product structures mean

An organizational form in which employees are grouped around different products that the company produces.

structures that fall beneath Bureaucratic structure: geographic structures mean

An organizational form in which employees are grouped around the different locations where the company does business.

structures that fall beneath Bureaucratic structure: client-based structures mean

An organizational form in which employees are organized around serving customers.

structures that fall beneath Bureaucratic structure: matrix structures mean

A complex form of organizational structure that combines a functional and multi-divisional grouping.

• In this example, employees are distributed into teams or projects within the organization on the basis of both their functional expertise and the product that they happen to be working on. Thus, the matrix represents a combination of a functional structure and a product structure. There are two important points to understand about the matrix structure. First, the matrix allows an organization to put together very flexible teams based on the experiences and skills of their employees. 51 This flexibility enables the organization to adjust much more quickly to the environment than a traditional bureaucratic structure would.

1st organizational design: business environment means

The outside environment, including customers, competitors, suppliers, and distributors, which all have an impact on organizational design.

2nd organizational design: Company Strategy means

An organization’s objectives and goals and how it tries to capitalize on its assets to make money.

3rd organizational design: Technology means

The method by which an organization transforms inputs to outputs.

4th organizational design: size

The number of employees in a company.