Foundations of Organizational Structure

Chapter: 5

Foundations of Organizational Structure

Meaning of Organizational Structure:

An organization is a structured social system consisting of individuals and groups working together to meet some agreed
upon objectives. Organizations consist of people working together to attain common goals. Organizations are human associations for
achieving goals. They operate in a dynamic environment.
Organizational structure refers to the network of relationships among individuals and positions in an organization. It refers to
the formal configuration between individual and group with respect to their tasks, responsibilities and authority within the
organization. In other words, the typical hierarchical arrangement of lines of authority, communications, rights & duties of an
organization is called organizational structure. Organizational structure determines how the roles, power and responsibilities are
assigned, controlled and coordinated and how information flows between the different levels of management. A structure depends on
the organization's objectives and strategy. It identifies each job, its function and where it reports to within the organization. For
example: An organizational chart illustrates the organizational structure.
In a centralized structure, the top level of management has most of the decision making power and has tight control over
departments and divisions. In a decentralized structure, the decision making power is distributed and the departments and divisions
may have different degrees of independence.
Dimensions (Elements) of Organizational Structure:

1) Work specialization
2) Departmentalization
3) Chain of command
4) Span of control
5) Centralization and Decentralization
Importance of Organizational Structure:

1) Clear-cut Authority Relationships
2) Pattern of Communication
3) Proper Balancing
4) Stimulating Creativity
5) Encouraging Growth
1) Clear-cut Authority Relationships: Organization structure allocates authority and responsibility. It specifies who is to
direct whom and who is accountable for what results. The structure helps an organization member to know what is his role and how
does it relate to other roles.
2) Pattern of Communication: Organization structure provides the patterns of communication and coordination. By grouping
activities and people, structure facilitates communication between people centered on their job activities. People who have joint
problems to solve often need to share information.
3) Proper Balancing: Organization structure creates the proper balance and emphasizes on coordination of group activities.
Those more critical aspects for the success of the enterprise may be given higher priority in the organization. Research in a
pharmaceutical company, for instance, might be singled out for reporting to the general manager or the managing director of the
company. Activities of comparable importance might be given, roughly equal levels in the structure to give them equal emphasis.
1
4) Stimulating Creativity: Sound organization structure stimulates creative thinking and initiative among organizational
members by providing well defined patterns of authority. Everybody knows the area where he specializes and where his efforts will be
appreciated.
5) Encouraging Growth: An organization structure provides the framework within which an enterprise functions. If it is
flexible, it will help in meeting challenges and creating opportunities for growth. A sound organization structure facilitates growth of
the enterprise by increasing its capacity to handle increased level of activity.
Types of Organizational Structure:

1) Line structure
2) Line and staff structure
3) Functional structure
4) Committee structure
5) Matrix structure
2
Meaning of Organizational Culture:
Organizational culture is a cognitive framework consisting of attitudes, values, norms and expectations shared by
organizational members. In short, it is a common perception held by the organizational members. In other words, organizations have
certain values, policies, rules and guidelines which help them create an image of their own, which is known as organizational culture.
The culture followed by the organization has a deep impact on the employees and their relationship amongst themselves. It affects the
organization's productivity and performance. It is essential for the employees to understand the culture of their workplace to adjust
well. Organizational culture governs the behavior of its members. Generally, organizational culture directs to employees, how they
should behave in an organization. In the same way, organizational culture directly influences the behavioral responses of the
employees.
Every organization has a unique culture making it different from the other and giving it a sense of direction. Organizational
culture differs from organization to organization because of having different variables which directly or indirectly influences the
organizational environment. So, being a manager of organization should try to understand organizational culture before formulation as
well as implementation of planning.
Stephen P. Robbins –“Organizational culture is a common perception held by an organization’s members.”
Organizational culture can be:

1) The ways the organization conducts its business, treats its employees, customers, and the wider community
2) The extent to which freedom is allowed in decision making, developing new ideas, and personal expression
3) How power and information flow through its hierarchy
4) How committed employees are towards collective objectives
Characteristics of Organizational Culture:

1) Innovation and risk taking
2) Attention to detail: History of the organization
3) Outcome orientation: Management focuses on outcomes rather than techniques
4) People orientation: Management is autocratic or democratic
5) Team orientation: Management prefers to have team rather than individual to perform the activities
6) Aggressiveness: Management prefers to be aggressive & competitive rather than easy going
7) Stability: Management prefers to maintain the status quo constraint to growth
Types of Organizational Culture:

1) Strong Organizational Culture
2) Weak Organizational Culture
1) Strong Organizational Culture:

A strong organizational culture could be one were the majority of the participants hold the same basic beliefs and values as
applies to the organization. In the same way, strong organizational culture refers to a situation where the employees adjust well,
respect the organization’s policies and stay to the guidelines. In such a culture people enjoy working and take every assignment as a
new learning and try to gain as much as they can. They accept their roles and responsibilities willingly. This can be extremely valuable
for building a team where all the participants have the same goals. Working together to improve efficiency or, possibly,
communication with management could be some of the goals.
2) Weak Organization Culture:

In weak organizational culture, the individual participants think that their way is the correct way, so there is not any
meaningful communication between the participants and the company cannot grow, even though it has plenty of innovation. If the
people in this group are too individual, it can lead to conflict between the participants or the participants and management. In this
situation, individuals accept their responsibilities out of fear of superiors and harsh policies. The employees in such a situation do
things out of compulsion. They just treat their organization as a mere source of earning money and never get attached to it.
3
Importance of Organizational Culture:
1) It brings all the employees on a common platform
2) It promotes healthy relationship amongst the employees
3) It unites the employees from different backgrounds
4) It decides the way employees interact at their workplace
5) It promotes healthy competition at the workplace
6) It extracts the best out of each team member
7) It helps in creating the brand image of the organization
8) It guides the employees and give them a sense of direction at the workplace
Factors influencing Corporate Culture:

1) Composition of group: Formal group & Informal group
2) Managers leadership style
3) Administrative process
4) Organizational history
5) Status of the organization

Foundations of Organizational Structure

Uploaded by

Copyright:

Available Formats

Foundations of Organizational Structure

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Foundations of Organizational Structure

Uploaded by

Copyright:

Available Formats

Chapter: 5

Foundations of Organizational Structure

Meaning of Organizational Structure:

Dimensions (Elements) of Organizational Structure:

Importance of Organizational Structure:

Types of Organizational Structure:

Stephen P. Robbins –“Organizational culture is a common perception held by an organization’s members.”

Organizational culture can be:

Characteristics of Organizational Culture:

Types of Organizational Culture:

1) Strong Organizational Culture:

2) Weak Organization Culture:

Factors influencing Corporate Culture:

You might also like