Chapter 8: Organisational Structure

What is an Organisational Structure

Formal aggrement of jobs within an organisation

What is the purpose of an organisational structure

To determine how an organisation is run, which directly affects its efficiency

How does an organisational structure help employees work effectively

By:

Assigning humans and other resourcs to tasks

Clarifying employees responsibilities and how their efforts should mesh through job descriptions

Letting employees know what is expected of them through rules

Establishing procedures for collecting and evaluatuing information to help managers make decisions and solve problems

Elements of organizational Sturcture

1. Specialisation(identity specific tasks and assigning them to individuals

2. Standardization ( the uniform and consistent procedures that employees follow in doing their jobs

3. Coordination (compromises the formal and informal procedures and controls that synchronize and integrate the activities)

4. Authority(the right to decide and act?

5. Responsibility (obligation of an employee to perform assigned tasks

6. Accountability (accept credit or blame for the results of their work)

Delegation of authority

The process by which managed assign to subordinates the right to make decisions and act in certain situations.

Used to improve delegation of authority

• Establish goals and standards in conjunction with subordinate

• Define authority and responsibility for delegated tasks to ensure accountability

• Select appropriate candidates and involve in decision making

• Subordinates should complete work delegated

• Establish adequate controls to measure performance of subordinates

Line and Staff Authority

Line authority belongs to managers who have the right to direct and control the activities of subordinates who perform task essential to achieving organizational goals

Staff authority belongs to whose who support line functions through advices,recommendations,researches etc

Centralize vs Decentralized

Centralized: top managers make all the decisions and lower ledger mangers and employees simply carry out their directives

Decentralized: decision making is pushed down to the mangers who are closest to the action

Advantages of decentralization

• It frees top mangers to develop organisations plans and strategies while lower level managers and employers handle routine, day to day decisions

• It develops lower level mangers self management competencies

• Fosters a healthy,achievement oriented atmosphere amongst employees

Factors affecting centralization and decentralization

• Uniformity policy

• Control mechanism

• Environmental influences

• Organizational culture

• Availability of manangers

Departmentalization

• Functional

• Product or service

• Geographic

• Customer

• Network

• Matrix