Elements of Organizational Structure

• List the 6 elements of organizational structure

  Work Specialization

  Departmentalization

  Chain of Command

  Span of Control

  Centralization and Decentralization

  Formalization
• What is work specialization?

  The degree to which work activities are divided into separate tasks (division of labor).
• Disadvantages of work specialization

  Tasks become redundant, resulting in boredom, fatigue, stress and decreased performance.
• Define departmentalization

  The process of grouping similar jobs into departments
• List the 5 ways of departmentalization

  Functional

  Product

  Geographical

  Process

  Customer
• Define chain of command

  The line of authority that extends from the lower to upper levels of the organization.

  Dictates who reports to who
• List the 3 elements of the chain of command


  Authority

  Responsibility

  Unity of Command
• Define the span of control

  The number of employees reporting to one manager
• Span on control and either be...

  Wide or Narrow
• Wide Span of Control

  flatter structure, fewer hierarchical levels

  tend to lead to more efficiency, fewer managers needed
• Narrow Span on Control?

  taller structure, more hierarchical levels

  larger organizations
• Define centralization

  decision-making authority is located at the top levels of the organization

  top managers make decisions with little or no input from lower levels
• Define decentralization

  decision-making authority is spread down to lower levels

  input from lower-level employees is encouraged
• Define functional departmentalization


  jobs are grouped by function (e.g. marketing, account, HR etc.)
• Define product departmentalization

  jobs are grouped by product line

  e.g. in companies that have multiple product lines
• Define geographical departmentalization

  jobs are grouped by geographical region

  e.g. companies may have different departments located in different geographical areas
• Define process departmentalization

  jobs are grouped by product or customer flow

  e.g. customers may have to through different departments before receiving the final product or service
• Define customer departmentalization.

  jobs are grouped by specific customer needs

  e.g. Banks have tellers, personal or commercial loan officers, etc.
• Define unity of command

  An employee should report to ONLY 1 manager at a time
• Define authority


  the formal right of a manager to make decisions, issue order and allocate resources
• Define responsibility


  The obligation or duty of employees to perform assigned roles or task
• Define formalization

  The extent to which jobs are standardized

  the degree to which employees are guided by rules and procedures
• More standardized jobs=

  more guidelines and regulation
• Define mechanistic structure

  strict work specialization

  high formalization

  narrow span of control

  high centralization

  limited information network
• Define organic structure

  flexible work specialization

  low formalization

  wide span of control

  decentralization

  free flow of information