Organizational Structure, Principles, and Behavior

• Horizontal differentiation


  Describes the degree of differentiation based on how many different types of either people or units are included in the organization
• Vertical differentiation


  • Refers to the depth of the organizational hierarchy
  • Typically represented by an organizational char
  • Authority usually flows from top to bottom, with those at the bottom of the chart holding the least authority
• Formalization


  • refers to the degree to which jobs in the organization are standardized
  • Includes the presence of rules, procedural specification, technical competence, and impersonality
  • The employee has little discretion with regard to when and how the job is completed
• Centralization


  • Refers to the extent to which decision making is concentrated at a single point in the organization
  • Decision making and authority, in this context, refer to the rights inherent to the position that one holds in the organization
  • Usually, the very top levels of management make the most of the policy decisions in a centralized organization
• Organization

  • “a group of individuals working to reach some common goal”
  • Backbone of management
  • Without it, no management can perform its functions smoothly
• Organizational Behavior

  • systematic and scientific analysis of individuals, groups, and organizations, its purpose is to understand, predict, and affect human behavior to improve the performance of individuals, which ultimately affects the functioning and success of the organizations in which they work
• Koontz&O'Donnel

  • “It is grouping of activities necessary to attain enterprise objectives and the assignment of each grouping to a manager with authority necessary to supervise it.”
• Louis.A.Allen

  • “The process of identifying and grouping the work to be performed, defining and delegating responsibility and authority and establishing relationship for the purpose of enabling people to work more effectively together in accomplishing objects.”
• Joseph.L.Massive

  • “The structure and process by which a cooperative group of human beings allocates its tasks among its members, identifies relationship, and integrates its activities towards common objectives.”
• Organization as a process

  • is an executive function
  • becomes a managerial function
  • becomes the function of every manager
  • it is a continuous process and goes on throughout the life time of an enterprise
• Organization as a structure or framework of relationships

  • organization is a network of internal authority, responsibility relationships
  • it is the framework of relationship of persons, operating at various levels, to accomplish common objectives
  • an organization structure is a systematic combination of people, functions and physical facilities
  • has to be first designed for determining the channel of communication and flow of authority and responsibility
• Peter F. Drucker - types of analysis:

  1. activities analysis
  2. decision analysis
  3. relations analysis
• Organizational Structure

  • organizational theorists suggest that the structure of an organization encompasses three major aspects: differentiation, formalization, centralization
• Authority

  • rights given to a certain position in an organization to give orders and the expectation that those orders are carried out
• Organizational Chart

  • It depicts the reporting relationships and the hierarchy of authority in an organization
  • Authority usually flows from top to bottom, with those at the bottom of the chart holding the least authority
• Presence of rules

  • the degree to which the behavior of organizational members is subject to organizational control
• Procedural Specification

  • the extent to which organization members must follow organizationally defined techniques in dealing with situations they encounter
• Technical Competence

  • the extent to which organizationally defined “universal” standards are used in the personnel selection and advancement process
• Impersonality

  • the extent to which both organization members and outsiders are treated without regard to individual qualities
• Spatial differentiation


  • Refers to the degree to which the location of an organization's units is in one place or spread across several locations
  • It is also related to the amount of horizontal and vertical differentiation
  • The more complex the organization, the greater is the extent of each of these will exist
• Division of labor

  • Divides work tasks into specific parts
• Unity of command

  • It is the concept that an individual reports to only one supervisor, to whom he/she is responsible
• Span of control

  • Refers to how many people a manager effectively controls
• Departmentalization

  • Refers to grouping individuals according to specific tasks
• Informal organizational structure

  • Refers to the network of personal and social relationships which arise spontaneously when people working together interact on personal whims, likes and prejudices
  • Not created by the top management and not portrayed on organization charts and manual
  • It provides an opportunity to workers to come close to each other, develop a feeling of cooperation and coordination among themselves
• Job satisfaction

  • Is either an emotional response or as a comparison between expectations and the perceived reality of the job as whole
• Organizational commitment

  • Defined both as an emotional attachment (affective organizational commitment) and as accepting the organization’s goals and values, putting forth effort, and wanting to maintain membership
  • It reduces job turnover intention for pharmacists
• Job stress

  • Can lead to burnout
  • Contributors include: Role conflict, Role ambiguity, Role overload, Work-home conflict, Job dissatisfaction
• Job turnover

  • Refers to the number of workers who leave a company over a certain time period
  • Decreased productivity from voluntary turnover is very costly to an organization due to advertising, recruitment, and training a replacement employee
• Emotions

  • “intense feelings that are directed at someone or something”
• Moods

  • pervasive emotions not directed at any particular person or object
• Emotional labor

  • is the emotional regulation in the workplace and particularly important to health care professionals
• Differentiation (complexity)

  • refers to the degree to which units are dissimilar; can occur horizontally, vertically, or spatially