An organizational structure defines how job tasks are formally divided, grouped, and coordinated. (Robbins and Judge 2001). Managers need to address six key elements when they design their organization’s structure: work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization.
Work SpecializationDescribes the degree to which activities in the organization are subdivided into separate jobs. The essence of work specialization is to divide a job into a number of steps, each completed by a separate individual. In essence, individuals specialize in doing part of an activity rather than the entirety. For example, most manufacturing jobs in industrialized countries featured high work specialization.
Since not all employees in an organization have the same skills, management can use work specialisation as a means of making the most efficient use of its employees’ skills and even successfully improving them through repetition. Less time is spent in changing tasks, putting away tools and equipment from a prior step, and getting ready for another. Equally important, work specialization is easier and less costly to find and train workers to do specific and repetitive tasks, especially in highly sophisticated and complex operations. DepartmentalizationOnce jobs have been divided through work specialization, they must be grouped so common tasks can be coordinated. The basis by which jobs are grouped is called departmentalization.
Chain of Command The chain of command is an unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. Within the chain of command, there is authority and unity if command. Authority refers to the rights inherent in a managerial position to give orders and expect them to be obeyed. To facilitate coordination, each managerial position is given a place in the chain of command, and each manager is given a degree of authority in order to meet his or her responsibilities. The principle of unity of command helps preserve the concept of an un- broken line of authority.
It says a person should have one and only one superior to whom he or she is directly responsible. If the unity of command is broken, an employee might have to cope with conflicting demands or priorities from several superiors. Span of ControlThe number of subordinates a manager can efficiently and effectively direct.Centralization and Decentralization Centralization refers to the degree to which decision making is concentrated at a single point in the organization. In centralized organizations, top managers make all the decisions, and lower-level managers merely carry out their directives.
In organizations at the other extreme, decentralized decision making is pushed down to the managers closest to the action.Formalization The degree to which jobs within an organization are standardized.Designs Mechanistic Model A structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization.Organic Model A structure that is flat, uses cross- hierarchical and cross functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making.
