COMMON

ORGANISATIONAL
STRUCTURES
by:- Trisha(1529/22)
Anshika(1564/22)
Sakshi(1548/22)
Hysha(1559/22)
 INTRODUCTION
• Organizational structure is defined as the established
pattern of relationships among the components of the
organization.
• In other words, organisation structure refers to the
network of relationships among individuals and positions in
an organisation.
• Jennifer and Gareth have defined organisation structure as
the formal system of task and reporting relationships that
controls, coordinates and motivates employees so that they
cooperate and work together to achieve an organisation’s
goals. Just as human beings have skeletons that define
their parameters, organisations have structures that define-
theirs.
 ORGANIZATIONAL STRUCTURE = ORGANIZATIONAL
FRAMEWORK
 SIGNIFICANCE OF
ORGANIZATIONAL STRUCTURES

1. Clear cut authority relationships

2. Pattern of Communication
3. Location of decision centres
4. Proper Balancing
5. Stimulating creativity
6. Encouraging Growth
7. Making use of technological improvements.

 Properly designed organizations can help in improving

productivity by providing a framework in which people can
work together the most effectively.

 GOOD ORGANIZATIONAL STRUCTURES = BETTER

MANAGEMENT = HIGHER PRODUCTIVITY
 COMPONENTS
Division of Labour involves breaking down complex tasks into smaller, specialized tasks, allowing workers to focus on one
activity. This concept, championed by Adam Smith in The Wealth of Nations, highlights how specialization increases
efficiency, using the example of a pin factory. Similarly, Henry Ford’s assembly line in the 20th century revolutionized
car production by assigning workers specific, repetitive tasks.
Benefits:
• Enhances efficiency and productivity.
• Workers quickly master tasks.
• Easier training and reduced costs.
• Better job-skills matching.
Criticism:
• Not applicable to all jobs.
• Can cause monotony.
• Overlooks workers' behavioral aspects.
Delegation of Authority is a key management process where a manager assigns tasks to subordinates, giving them the
authority to complete the tasks independently. This helps managers focus on strategic responsibilities, while subordinates
gain decision-making power within their scope of work. Delegation not only reduces the manager's workload but also helps
develop employees' skills and leadership potential.
• Example: At Google, managers often delegate project management to team leads. These leads are given the authority
to make decisions, manage smaller teams, and drive project outcomes. This allows the company to run more efficiently by
decentralizing decision-making and helps identify future leaders who are capable of handling bigger responsibilities.
Benefits:
• Encourages professionalism and creativity.
• Fosters a competitive environment.
• Enables quicker decisions.
Limitations:
• Managers may resist delegating.
• Training costs can be high.
• Not everyone can handle high-level decisions effectively.
• Administrative costs may rise.
Departmentation is the process of organizing related tasks into distinct units or departments within an organization. This
promotes specialization, clearer accountability, and efficient resource allocation by grouping activities based on function,
product, geography, or customer type.
Example: Apple uses departmentation by function, with departments like research and development, marketing, and
finance. This specialization boosts operational efficiency. According to MIT Sloan, effective departmentation helps
organizations scale and adapt while keeping units aligned with overall goals.
Benefits:
• Specialization
• Administrative Control
• Fixation of Responsibility
• Autonomy
• Managerial Development
Span of Control refers to the number of subordinates a manager can effectively supervise. A wider span means a manager
oversees more employees, leading to fewer management layers and faster communication. A narrower span allows for
closer supervision but requires more managerial layers. The ideal span depends on factors like task complexity, the
manager’s ability, and the organization’s efficiency.
Factors Influencing Span of Control:
• Nature of Work: Simple, repetitive tasks allow for a wider span, while complex tasks require a narrower span.
• Manager’s Ability: Skilled managers can supervise more people.
• Organizational Efficiency: Efficient systems and competent staff allow for a wider span.
• Staff Assistants: Assistants reduce direct contact, allowing a broader span.
• Time Available for Supervision: Higher-level managers have less time for supervision, requiring a narrower span.
• Subordinates’ Ability: Experienced, self-directed subordinates need less supervision.
• Degree of Decentralization: Managers making many decisions oversee fewer employees.
Tall and Flat Structures:
A tall structure has many hierarchical levels, with a longer chain of command and more managerial layers. This means
fewer subordinates per manager, leading to closer supervision but slower communication and decision-making. It provides a
clear career path with more job titles.
In contrast, a flat structure has fewer hierarchical levels and a wider span of control, where each manager oversees
more employees. This results in faster communication, quicker decision-making, and a more flexible work environment but
can reduce managerial oversight.
 FUNCTIONAL ORGANIZATIONAL STRUCTURE
Functional Structure: These structures group activities or jobs together based on function or job.
Production related jobs all are grouped under production department, sales related into sales
department, purchase related into purchase department and so on.
 DIVISIONAL ORGANIZATIONAL
STRUCTURES
Divisional Structure: In case the organization is too large and make more than one type of product,
then activities to one product are grouped in a department. For example, if an organization is making
soap, textiles, medicines etc. then all activities related to medicine will be gathered under medicines
department, all the activates of textiles in textile department and so on.
 ADAPTIVE ORGANIZATIONAL
STRUCTURES
Adaptive structures allow an organization to adjust to changes in its environment. They focus on
flexibility and a responsive design, which helps the organization quickly modify roles, responsibilities,
and work processes according to market conditions, shifts in consumer preferences, or technological
advancements. This approach often involves decentralizing decision-making authority to empower lower
levels within the organization, fostering creativity and innovation by reducing bureaucratic constraints,
and promoting greater collaboration. Additionally, adaptive structures emphasize the importance of
continuous learning by incorporating feedback and encouraging ongoing improvement, which helps
maintain resilience and competitiveness in a dynamic work environment.

Adaptive structures have various sub-parts according to the needs of different organizations. They
include the organic structure, which focuses on flexibility and decentralization, emphasizing quick
adjustments and collaboration. The network structure draws attention to external partners and
dispersed control. The matrix structure involves a combination of project-based and functional
hierarchies, promoting cross-functional teamwork. The modular structure highlights semi-independent
units that can be redesigned according to need. The virtual structure functions with teams divided
according to geographic areas and relies heavily on technology for communication. The boundaryless
organization focuses on open communication and collaboration across all levels. Each of these types
enhances an organization's ability to adapt to changing conditions efficiently.

For example, Google uses adaptive structures. It operates with an organic structure that is very
flexible and decentralized, promoting quick decision-making and creativity. Google also uses the
network structure and matrix structure by collaborating with external parties and facilitating cross-
functional teamwork, respectively. The use of these structures allows Google to respond smoothly to
changes in the market and technological advancements.
ADVANTAGES

1. Flexibility: Provides the organization with the ability to make timely changes in roles, tasks, and processes in response
to challenges or changes in technology or market conditions.

2. Innovation: Supports creativity by reducing bureaucratic interference and granting autonomy to teams, allowing them to
experiment and try new approaches.

3. Responsiveness: Enables the organization to quickly adapt to external constraints, opportunities, or threats, helping it
stay ahead in a constantly changing environment.

4. Enhanced Collaboration: Promotes greater communication and integration among team members across different levels
and departments, improving project quality and issue resolution.

5. Employee Empowerment: Eliminates hierarchical decision-making structures, empowering lower-level employees with
more responsibility and authority, leading to higher job satisfaction and motivation.

DIASDVANTAGES

1. Role Ambiguity: The lack of a clearly defined hierarchy can lead to role disputes and confusion about responsibilities, as
tasks are often performed in teams without direct superiors.

2. Coordination Difficulties: Managing and organizing work through various teams and units can be challenging, potentially
causing inefficiencies or misalignment.

3. Consistency Problems: High flexibility can lead to uncertainty about the effectiveness of systems or policies, as the lack
of standardization may undermine consistency.

4. Management’s Burden: The burden of managers to cope with the burden of control and oversight while still allowing
participants flex and take some initiative is a delicate coordination problem.

5.Overload Possibility: While the above is necessary and even proper in cases , such constant change and adaptation can
bring about an element of implanted decision making apathy in employees which is bad for efficiency and more so outlook.
 MATRIX ORGANIZATIONAL
STRUCTURE
Within a matrix organizational structure, team members report to several managers at once.

Best For: Organizations that need to balance the benefits of functional and divisional
structures, like project-based companies, consulting firms, or companies involved in complex
projects requiring cross-functional collaboration.

Pros of a matrix organizational structure:

Flexibility to pull employees into more important projects at will.

Empower employees to build and test skillsets outside
of their pre-determined roles.
Faster project deliverables.
Provides a more dynamic view of the organization.

Cons of a matrix structure:

This often leads to conflicts among leaders and project

managers.
Confusion on authority.
Frequency of change leads to fatigue and resistance.
NETWORK BASED ORGANIZATIONAL
STRUCTURE
Best For: Companies that outsource business functions and rely on external partners, like businesses
with extensive supply chains and franchises, or companies that focus on core competencies while
leveraging partnerships for other operations.

Pros of a network structure:

Promotes organizational agility and flexibility.

Fosters collaboration across employees.
Breaks down silos.
Cultivates better understanding of industry, products, and customers.
Creates a web of work-related relationships.
Creates highly specialized skills in employees.

Cons of a network structure:

Extremely complex and convoluted.

Lower formalization.
High turnover.
There is a feeling of inequality between full-time
employees and contractors/freelancers.
It’s difficult to know who has final approval.
 TEAM BASED ORGANIZATIONAL
STRUCTURE
A team-based organizational structure creates small teams focusing on delivering one product or
service – often via Scrum or tiger teams. These teams can solve problems and make decisions without
bringing in third parties.

Team members are responsible for managing their workload and have full control over the project.
Team-based organizations are distinguished by little formalization and high flexibility. This structure
works well for global organizations and manufacturers.

Best For: Companies prioritizing flexibility, innovation, and quick response to market changes, like tech
startups or creative agencies, where collaboration and teamwork are essential.

Pros of a team-based organizational structure:

Drives growth and innovation.

Promotes lateral career moves.
Provides experiences across departments and teams.
Experience is valued over seniority.
Less emphasis on management.
Encourages lateral moves.
Is more agile and fits well with Scrum models.
Cons of a team-based structure:

No clear authority.
Career path growth is not clear.
Not formalized.
 HIERARCHIAL STRUCTURE
Best For: Traditional, stable organizations with clear authority lines and a need for uniformity and
control. Examples include government agencies, large corporations, or military organizations.

Pros of a hierarchal structure:

Obvious chain-of-command.
Clearly defined reporting structure and individual responsibilities.
Sets clear career path growth.
Builds niche skills and specialties.
Departments and teams create a sense of
“we’re in this together.”

Cons of a hierarchal structure:

Bureaucracy, processes, slow down

innovation.
More resistant to change.
Employees focus on department goals and KPIs
over what’s most important for the company.
Employees at the bottom of the org structure
feel like they don’t have an impact.
Feeling that there is no place to challenge authority.
 FLAT ORGANIZATIONAL STRUCTURE
Best for: Smaller companies and startups that require faster decision-making and a collaborative
culture, accelerating innovation and flexibility.

Pros of a flat structure:

More responsibility for employees.

Open communication.
Clear path of approval.
Change and improvement implementation happen fast.
Rewards adaptability, flexibility, and innovation.

Cons of a flat structure:

Not scalable.
Often leads to confusion, as employees lack a clear
supervisor or manager.
Relies on one person to be the decision-maker.
Leads to employees with generalized skills with a
lack of specializations.
Difficult to maintain when organizations start to scale.
 CONCLUSION
Organizational structure is the backbone of all operating procedures and
workflows at any company. It determines each employee’s place and role in
the business and is key to organizational development.

A clear structure allows every team member to be involved. When employees

know what they’re responsible for and who they report to they’re more
likely to take ownership of their work.

Thus, having a documented organizational structure in place enables employes

to improve efficiency and provides clarity for each individual employee and
business unit.