Unit 4-5: Organizational structure

• Organizational structure - a way or method by which organizational activities are divided, organized, and coordinated.
• Rezayian, 2005- The organizations created the structures to coordinate the activities of work factors and control member performance.
• Monavarian, Asgari, & Ashna, 2007 - Organizational structure is a set of methods dividing the task to determined duties and coordinates them.
• Organizational structure should facilitate decision making, proper reaction to environment and conflict resolution between the units.
• The most important organizational unit is at the top of chart and distance of each unit form the highest unit indicates the power of the unit.
• The lines between organization units show their organizational relations.
• If the communication line between two units indicates applying a part of power, it is shown by assumptive line (---).
• Rezaian, 2005 - If we make a difference between queue units form staff units, the staff units should be drawn beside commanding line (organizational hierarchy).
• Schine 1971 & 1988 - 3 Dimensions of Organizational Structure.
• 3 Dimensions of Organizational Structure - (1) Hierarchy dimension; (2) Functional dimension; (3) Inclusion dimension.
• Hierarchy dimension - shows relative ranks of organizational units by similar method of organizational chart.
• Functional dimension - shows different works performed in organization.
• Inclusion dimension - shows distance (close or far) of each person in organization to central core of organization.
• 3 Principles - Planning of Organizational Structure: (1) determines FORMAL RELATIONS; (2) determines the POSITION OF ANGLE; (3) includes the DESIGN OF SYSTEMS.
• Centralization - gives leaders the ultimate control over decision-making processes, The biggest drawback here is the amount of time the decision-making process.
• Decentralization-  allows employees to impact business decisions. Lower-level employees pinpoint issues and make decisions before communicating it to upper management.
• Formalization - Determines to which extent business processes, policies, and job descriptions are standardized. It may regulate communication between employees and managers, workplace culture, operational procedures, etc.
• Physical Structure - refers to the relations between physical elements of organizations as buildings and geographical places in which the works are done (business).
• Social Structure - refers to the relations between social elements as people, positions and organizational units (e.g. departments and sectors).
• 7 Types of Social Structure: 1.Simple structure

  2. Functional structure

  3. Multidivisional structure

  4. Matrix structure

  5. Hybrid structure

  6. Network structure

  7. Bureaucracy
• Simple structure - This is a set of flexible relations and due to limited separation, it has low complexity. The members of such organization can design organization chart with focusing on leaders and there is no need to formality.
•  Formal structure - is used as a tool to fulfill the increasing needs of separation. Each department has a designated leader highly experienced in the job functions of each employee supervised by them.
• Pros of formal structure: It is scalable.
• Cons of formal structure: Lack of coordination between departments.
• Divisional structure - organizes employees around a common product or geographical location. These have teams focused on a specific market or product line.
• Divisional structure follows decentralized framework.
• Matrix Structure -  created with the aim of creating a type of structure composed of functional and multidivisional structures.
• Network Structure - act of joining the efforts of two or more organizations with the goal of delivering one product or service. Typically, a network organization outsources independent contractors or vendors to complete the work.
• Hierarchical Structure - A chain of command, in this case, goes from senior management to general employees through a range of executives on the departmental and team level. The highest-level executive has the highest power over the decision-making process.
• Team Structure - a team-based organizational structure creates small teams that focus on delivering one product or service. These teams are capable of solving problems and making decisions without bringing in third parties (decentralized).