Organization Structure,Drivers,Designs

1. ORGANIZATION STRUCTURE
Presented by:
Wachira Peter M.
P15/4735/2013

2. DEFINITION
This is a system in an organization that allows allocation of functions
and processes to different entities e.g.. branch, departments and
individuals.
Taylor & Fayol-theorist of org structure-saw the importance of
structure for efficiency and effectiveness and assumed people could
act accordingly to whatever structure was needed. This simply states
how activities such as task allocation, coordination and supervision
are directed towards achieving organization goals and aims.
Organization structure could also be defined by tasks and authority
relationships that control actions and resources use to meet
organization goals.

3. STRUCTURE INTRO CONT.…
Basically, it answers the questions
 Who makes Decisions?
 What needs to be done, by who and how.
 Organization structure is then visually represented as an organization
structure, with job descriptions of the positions on it.

4. WHY ORGANIZATION STRUCTURE?
a) Decision making
b) Achieving organization goals-achieved by a chain of command
c) Adapt to changes by prevention and solution mechanisms-whether a rigid or
flexible model that acts to the business environment.
d) Evaluate employees performance-who evaluates who.
e) Communication-How communication flows(orders and information)
f) Coordination-How distinct units collaborate to act a coherent unit

5. CHALLENGES ENCOUNTERED:
Challenges come up when choosing the optimum structure for an organization.The
common challenges encountered include:
1.Balancing Differential and Integration
division of labour leads to specialization.This groupings require to be integrated
to coordinate their activities.
a. vertical-hierarchy of authority to be established and the reporting
relationships
b. horizontal-group tasks to divisions and functions achieving division of
labour. Specific tasks for a given group of people.

6. CHALLENGES..
2.Integration Challenge-coordinate various tasks to work together and achieve the
collective holistic organization goal.This can be achieved by these tactics:
i. hierarchy of autonomy-ranks specify who you are to report to.
ii. Direct contact- by face to face communication a manager may get things done by
individuals.
iii. Liaison Roles-one of the manager is in charge of coordinate between the others.
iv. Integration role-a new role is made, to coordinate activities of the different departments
v. Integration Dept.-a new department is made, to coordinate activities of the different
departments
vi. Task forces-temporal meetings by managers to coordinate their activities of their distinct
domains
vii. Team-permanent committees manager meet in to coordinate activities between the
departments they are from.

7. CHALLENGES
3.Centralization-decentralization balance.
 central manager may be overloaded 
 decentralizing authority may be much flexible than centralized models but it
also makes planning and coordination difficult ,loose decision making control at
the top levels.
 decentralization is costly to employ managers to manage in decentralization
modules and more time spent on coordinating activities

8. CHALLENGES
 4.Standardization-Mutual Adjustment balance.
 should we adhere to standards considered proper that were set or should we
adjust accordingly to our operating environments e.g. the market forces?
 It is best to standardize behaviour, have rules to regulate operations and at the
same time keep the organic nature of an organization by changing with respect to
the business environment it operates in

9. COMMON DESIGNS
1.Simple Structure:-Strategic leader makes the key decisions, and communication
is often face to face.
 useful for new business (shamrocks) to allow founder to control growth and
development.
2.Bureaucracy-rational legal authority. Have a degree of standardization
characterized by rigid and tight procedures, policies and constraints.
 Reluctant to change.
 Authority is at the top and information flows from top to bottom.
 Strategic decision making is fast as they need fewer people to approve.
 Discourages creativity and innovation making it hard for a company to adapt to
changing market place condition

10. STRUCTURE DESIGNS…
3.Functional Structure-characterized by coordination, task allocation and task
allocation. People are grouped e.g. according to function(production, marketing,
accounting) and have to who they report to.
 leads to operational efficiency.
 communication is slow, rigid and slow

11. STRUCTURES:
4.Divisional
 Self contained division(collection of functions which produce a product)
 Delegates authority so performance is measured in specific group.
 Flexible to change in market
 Unhealthy competitions and org goals may be neglected as the strive to meet
divisional goal
 Increase cost due to needing managers for division

12. STRUCTURES..
 5.Hybrid
 is one that has divisional units but also have functional departments specialized
and centralized in the headquarter, e.g. multi-national banks
 Functional units are there to support the different divisional units
 Usually focus on product, services and market.

13. STRUCTURES…
6.Matrix structure-groups employees by product and function…frequently uses
teams of employees to accomplish tasks
Dual chain of command.
Functional departments focus on specialized resources while lateral product teams
focus on outputs
 Team Structure
 Virtual Organization
 Boundary less

14. STRUCTURES…
 7.Virtual Organization
 Small organization that outsources its major business function e.g. marketing and
advertising.
 It is usually centralized with less or no departments.
 Flexible to adapt to business environment.
 Outsources services that organization feels can be done better and cheaper by
from outside organization. e.g.. Using Human Resource Agents.

15. DRIVERS
1. Strategy
2. Size
3. Technology
4. Business Environment & uncertainty
5. Human Resource
6. Nature of business-online based business like e-bay and jumia may work
smoothly as a virtual organization. No physical location is required.

16. REFERENCES:
1. http://www.tutorialspoint.com/management_concepts/organizational_structur
es.htm