Organizational design is actually a formal process of integrating people, information and technology

1. ORGANISATION STRUCTURE AND
DESIGN
Chef Sunil Kumar 1
Chef Sunil Kumar

2. CONTENTS
• Introduction to Organisational Structure and
Design
• What is Organisation ?
• Structure and Chart
1. Formal.
2. Informal.
• Organisations
1. External factors
2. Internal factors. 2
Chef Sunil Kumar

3. INTRODUCTION TO ORGANISATIONAL STRUCTURE
AND DESIGN
 Organisational Structure is the way in which the interrelated groups of an
organization are constructed.
 The main concerns are effective communication and coordination
 Organisational Structure and design helps influence behavior and relationships of
jobs and functions
 It also provide a purposeful and goal oriented behaviour.
 It is beneficial in working efficiencial and inspiring innovation.
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4. WHAT IS ORGANISATION ?
 Organisational are the grand strategies created to
bring order to a concerted effort for the achievement
of certain objectives and goals.
 An organisation is an entity comprising multiple
people, such as an institution or an association, that
has a collective goals and is linked to an external
environment.
 Organisation are composed of individuals and
groups of individual and they consist of different
functions.
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5. DETERMINANTS OF ORGANISATIONAL STRUCTURE
ORGANISATIONAL STRUCTURE
1. Technology
2. Size
3. Environment
4.
Strategy
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6. DETERMINANTS OF ORGANISATIONAL STRUCTURE
1. TECHNOLOGY :- It is defined as in terms of knowledge and the use of tools.
Technology refers to the tools and machines that may be used to helps solve problems.
It includes technical methods, skills, processes, techniques, tools and raw materials.
2. ENVIRONMENT :- Environment is a important factor of Organisational structure. It
include both internal factors and external factors. Internal factors include management,
employees, owner, workplace culture and Human Resource. External factors are things
that are outside the company that include competitor, customers, technology, the
economy, and legal issues etc. It is important for the user to look after external factors
so as to achieve the goals.
3. SIZE :- There are several criteria to determine size of an organization such as number
of persons employed, amount of capital invested, volume of turnovers etc. As an
organization grow in size its structure naturally becomes complex. Therefore size
though an element of organization structure is a factor that determines type of
organization structure.
4. STRATEGY :- Organisational goals influence the way an organization is designed. The
high value placed on productivity and quality as well as shareholders value had a major
influence on the redesign of Westinghouse as a more diversified and decentralized
organization.
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7. ORGANISATIONAL STRUCTURE AND CHART…
An organizational chart is a
DIAGRAM that shows the
STRUCTURE of an organization
and the relationship and relative
ranks of its parts and position/jobs.
The term is also used for similar
diagrams, for example ones
showing the different elements of a
field of knowledge or a group of
languages.
It is a diagram showing graphically
the relation of one official to
another, or others, of a company. A
company organizational chart
typically illustrates relation between
people within an organization.
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8. TYPES OF ORGANISATIONAL CHART AND
STRUCTURE
1. FORMAL
2. INFORMAL
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9. FORMAL ORGANISATIONAL CHART AND STRUCTURE
The FORMAL ORGANISATIONAL CHART
& STRUCTURE is an officially codified
hierarchical arrangement of relationships
between different jobs within the
organizational units and relationship
between department within the
organization.
TYPES OF FORMAL ORGANISATIONAL
CHART:-
1) FUNCTIONAL
2) LINEAR
3) MATRIX
4) STAFF & LINE
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10. 1) FUNCTIONAL ORGANISATIONAL CHART
 Functional Organisational chart
is one of type of formal
organizational chart.
 The basis of this structure is the
situation known as the
“MARTYR STAKE” in which the
worker receives from different
superiors different commands.
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11. 2) LINEAR ORGANISATIONAL CHART
 This is one of the basic
organizational arrangement.
 The position and relations of
superiority and inferiority are
arranged and oriented
vertically.
 Each superior has clearly
assigned subordinates and
each subordinates has clearly
assigned superior.
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12. 3) MATRIX ORGANISATIONAL CHART
 It is also known as Project
Structure. The basis of the
organizational structure is a
classical vertical linear structure,
which is combined with a
horizontal structure showing Ad-
hoc generated teams dedicated t
special projects.
 For different projects different
projects teams are created with
different managers and different
roles for the individuals workers
nominated into individual teams.
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13. 4) STAFF AND LINE ORGANISATIONAL CHART
 A line function is the one that
directly advance an organization
in its core work.
 This always includes production
and sales, and sometimes also
marketing.
 It is based on the arrangement of
LINEAR ORGANISATIONAL
extended by the Staff departments
that provide support for
management for different
hierarchical levels and area of the
operation of the organization.
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14. ADVANTAGE OF FORMAL ORGANISATION
1) SYSTEMATIC WORKING:- Formal organization structure results in systematic
and smooth functioning of an organizing.
2) ACHIEVEMENT OF ORGANISATIONAL OBJECTIVES:- Formal organizational
structure is established to achieve organizational objectives.
3) NO OVERLAPPING OF WORK:- In Formal Organisation structure work is
systematically divided among various department and employees. So there is no
chance of duplication or overlapping of work.
4) CO-ORDINATION:- Formal organizational structure results in coordinating the
activities of various department.
5) CREATION OF CHAIN OF COMMAND:- Formal organisation structure clearly
defines superior subordinates relationship, i.e., who reports to whom
6) MORE EMPHASIS ON WORK:- Formal organizational structure lays more
emphasis on work than interpersonal relations
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15. DISADVANTAGE OF FORMAL ORGANISATION
1. DELAY IN ACTION:- While following scalar chain and
chain of command actions get delayed in formal
structure.
2. IGNORES SOCIAL NEEDS OF EMPLOYEES:- Formal
organizational structure doesn't give importance to
psychological and social need of employees which may
lead to demotivation of employees.
3. EMPHASIS ON WORK ONLY:- Formal organisational
structure gives importance to work only: it ignores
human relation, creativity, talents, etc.
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16. INFORMAL ORGANISATIONAL CHART AND STRUCTURE
 It include personal relations, relations and
interactions of people in the organization,
that are created naturally, informally, and
unofficially. They take place in an informal
way outside the framework of Formal
organizational structure.
 The informal organizational structure
crosses it horizontally, vertically, and
diagonally.
 It is a type of Social Network and can be
analyzed with adequate methods :-
1) SOCIOMETRY
2) SOCIAL NETWORK ANALYSIS.
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17. 1) SOCIOMETRY
 Sociometry is one of the most popular
method of social network analysis.
 Its author is Jacob Levy Moreno, who
originally developed it for the needs of
Psychotherapy.
 The purpose is to map all relationships and
divide them into positive and negative
choices
 The result of the Sociometry is important for
assessing the climate in the group
(organization, unit, team, etc.)
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18. 2) SOCIAL NETWORK ANALYSIS
 Social Network Analysis understands Social
Network as a system of interconnected nodes
through edges (their relationship).
 This is made by mathematical method and
network analysis methods.
 Social Network Analysis is used in knowledge
management
 The result is a Map showing graphically all
element of social system and their
relationships.
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19. ADVANTAGE OF INFORMAL ORGANISATION
1. FAST COMMUNICATION:- Informal structure does not follow scalar
chain so there can be faster spread of communication.
2. FUFILLS SOCIAL NEEDS:- Informal communication gives due
importance to psychological and social need of employees which
motivate the employees.
3. CORRECT FEEDBACK:- Through informal structure the top level
managers can know the real feedback of employees on various
policies and plans. The employees can also improve there
performance by listening their performance.
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20. DISADVANTAGES OF INFORMAL ORGANISATION
1. SPREAD RUMOURS:- According to a survey 70% of information spread
through informal organizational structure are rumors which may mislead the
employees.
2. NO SYSTEMATIC WORKING:- Informal structure does not form a structure for
smooth working of an organization
3. MAY BRING NEGATIVE RESULTS:- If informal organization opposes the
policies and changes of management, then it becomes very difficult to
implement them in organization
4. MORE EMPHASIS TO INDIVIDUAL INTEREST:- Informal structure gives more
importance to satisfaction of individual interest as compare to organisational
interest
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21. EXTERNAL FACTORS AFFECTING ORGANISATIONAL
DESIGN..
Although many things can affect the choice of an appropriate structure for an
organization, the following four factors are common:-
1. Size
2. Life Cycle
3. Strategy
4. Environment
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22. EXTERNAL FACTORS…
1. SIZE:- The larger the organization the more complicated the
structure and when the organization is small such as retail
store or a restaurant its structure can be simple. In large
organization the structure is formal so it could be easy for
employees to manage
2. LIFE CYCLE:- All the organization structure tend to move
through life cycle. Although an organization have to proceed
different stages to achieve a goal. As an organization age,
they tend to get larger; thus, the structural changes a firm
experiences as it gets larger and the changes it experience as
the firm progresses through life cycle. As a result, the older
and larger the organization becomes, the greater the
likelihood that it will move from an organic structure to a
mechanistic structure. 22
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23. EXTERNAL FACTORS…
4. STRATEGY:- It is really important factor as the organization position itself in
the market with the newest and best product(differentiate strategies) or it may
decide that it will produce a product already on the market more efficiently and
more cost effectively(Cost-leadership strategy). Each strategies requires
structures that helps the organisations reach its objectives.
5. ENVIRONMENT:- The environment is the world in which the organization
operates, and includes conditions that influence the organization such as
economic, social culture, politics, technological and natural environment.
Environment are often described as STABLE and DYNAMICS, In stable
environment customers desires are well understood while In dynamic the
costumers desires are changing which also affect the organizational structure as
there is competitive pressure in an organisations.
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24. INTERNAL FACTORS AFFECTING ORGANISATIONAL
STRUCTURE
Every organization has its own culture. The internal factors determine how the
organization moves forward, both as a self-contained organizational entity and in
response to its external environment. There are four factors:-
1. Learning
2. Leadership
3. Communication
4. Mission
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25. INTERNAL FACTORS
1. LEARNING:- Learning is one of the most fundamental human activities and accounts
directly or indirectly for the success of any organization. Today’s most successful
organizations, like GOOGLE, APPLE led by Elon Musk, are essentially learning
organizations.
2. LEADERSHIP:- Leadership is important for an organization. Right leadership will fulfills
the goals of the organizations. Great leaders motivate their employees and teach them
how to work.
3. COMMUNICATION:- Successful organizations thrive on robust communication practices,
where teams and teams leaders communicate easily and often to improve results.
Organizations with communication deficiencies often have rigid leadership structures that
destroy trust.
4. MISSION:- It is very important for an organizations to set the MISSION for success. A
successful organizational has a clear sense of its ultimate purpose and knows how it
intends to fulfill that purpose.
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26. DEGREE OF DECENTRALISATION
 Degree of Decentralization indicates the extent to which an
organization wants to decentralize depends upon the
degree of decentralization.
 Managers cannot be ordinarily for or against
DECENTRALISATION of authority.
 They may prefer to delegate authority or they may prefer to
delegate authority, or they may like to make all decisions.
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27. FACTORS TO DETERMINE DEGREE OF DECENTRALISATION
 Factors to determine the Degree of decentralization are:-
1. Costliness of Decisions
2. Uniformity of Policy
3. Economic Size
4. Availability of Managers
5. History of the Enterprise
6. The Philosophy of the Management
7. Decentralization of Performance
8. Environmental Influence. 27
Chef Sunil Kumar

28. ANY QUESTIONS?
THANK YOU!
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