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BUSINESS ADMINISTRATION
PART 3 – ORGANIZING
ORGANIZATION STRUCTURE
 Way in which the various parts of the organization are formally arranged
 System of tasks, workflows, reporting relationships & communication channels that link
together the work of diverse individuals & groups
ORGANIZATIONAL CHART
 Diagram that shows reporting relationships & the formal arrangement of work positions
within an organization
 Identifies various positions & job titles, as well as lines of authority & communication
between them
 Shows the formal structure or the structure of the organization in its official state
 This is how the organization is intended to function
BASICS OF AN ORGANIZATIONAL FORMAL STRUCTURE
 Division of work
 Supervisory relationship
 Communication channels
 Major subunits
 Levels of management

Strategy defines
“What to do”
Organizing defines
“how to do it”

Informal structure
“shadow” organization made up of the unofficial, but often critical, working relationship between
organizational members
Potential advantages of informal structures:
 Helping people accomplish their work
...

 Gaining access to interpersonal networks
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BASIC ELEMENTS OF ORGANIZING
1
...

Job Rotation
Involves systematically moving employees from one job to another
An alternative to job specialization that involves systematically moving employees from one job to
another
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Job characteristic approach
An alternative job specialization that suggests that jobs should be diagnosed and improved along five
core dimensions, taking into account both the work system and employee preferences
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Task Identity
the extent to which the worker does a complete or identifiable portion of the
total job
...

Autonomy
the degree of control the worker has over how the work is performed
...

2
...

Functional Departmentalization
Grouping jobs involving the same or similar activities
Product Departmentalization
Grouping activities around product or product groups
Customer Departmentalization
Grouping activities to respond to and interact with specific customer or customer groups
Location Departmentalization
Grouping jobs on the basis of defined geographic sites or areas
3
...

Span of management (Span of Control)
The number of people who report to a particular manager
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DISTRIBUTING AUTHORITY
Authority
Power that has been legitimized by the organization

Delegation
The process by which a manager assigns a portion of his or her total workload to others
Decentralization
The process of systematically delegating power and authority throughout the organization to middle
and lower level managers
Centralization
The process of systematically retaining power and authority in the hands of higher-level-managers
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COORDINATING ACTIVITIES
Coordination
The process of linking the activities of the various departments of the organization
Pooled Interdependence
When units operate with little interaction; their output is pooled at the organizational level
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Structural Coordination Techniques
Electronic Coordination

THE BUREAUCRATIC MODEL OF ORGANIZATION DESIGN
Bureaucracy
A model of organization design based on a legitimate and formal system of authority
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ENVIRONMENT
Mechanistic organization
Similar to the bureaucratic model, most frequently environments
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Differentiation
Extent to which the organization is broken down into subunits
Integration
Degree to which the various subunits must work together in a coordinated fashion
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Organizational life cycle
Progression through which organizations evolve as they grow and mature
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• Members share technical expertise, interests and responsibilities
CONGLOMERATE DESIGN (H-FORM)
Used by an organization made up of a set of unrelated businesses
DIVISIONAL DESIGN (M-FORM)
Based on multiple businesses in related areas operating within a larger organizational framework
MATRIX DESIGN
Based on two overlapping bases of departmentalization
HYBRID DESIGN
Some organization use a design that represents a hybrid of two or more of the common forms of
organizational design
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VIRTUAL ORGANIZATION
One that has little or no formal structure
LEARNING ORGANIZATION
One that works to facilitate the lifelong learning and personal development of all its employees
while continually transforming itself to respond to changing demands and needs

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