Published on March 8, 2014
6-1 Organizational Structure and Communication Presented by: Dr. Akhlas Ahmed Preston University
6-2 Introduction Organization structure determines who works together It is the way managers design their firms to achieve their organization’s mission and goals Organizational communication flows through its structure, which affects: behavior human relations performance
6-3 The transition from an economy based on materials to an economy based on flows of information has created considerable challenges for organizational structure, and communication.
6-4 Principles of Organization (1 of 3) Division of Labor and Departmentalization Division of labor, or work specialization – refers to the degree to which tasks are subdivided into separate jobs Departmentalization – grouping of related activities into units Chain line of Command of authority from the top to the bottom of the organization, which is shown in an organization chart
6-5 Principles of Organization (2 of 3) Span of Management refers to number of employees reporting to a manager Centralized With and Decentralized Authority centralized authority, top managers make important decisions With decentralized authority, middle and first-line managers make important decisions where the action is
6-6 Principles of Organization (3 of 3) Coordination With the division of labor and departmentalization comes the need to coordinate the work of all departments
Questions and Answers for Designing Organizational Structure: Questions Answers How should we subdivide work? Division of Labor and Departmentalization Who should departments and individuals report to? Chain of Command How many individuals should report to Span of Management each manager? At what level should decisions be made? Centralization vs. Decentralization How do we get everyone to work together as a team? Coordination 6-7
6-8 Formal Organization Structure Vertical downward communication President Vice President Production Vice President Finance Vice President Marketing Vertical upward communication Manager A Manager B Manager C Manager D Manager E Exhibit 6.2 Manager F Manager G Manager H Manager I
6-9 Informal Organization Structure Horizontal communication networks President President Vice President Vice President Production Production Manager A Manager B Vice President Vice President Finance Finance Manager C Manager D Manager E Exhibit 6.2 Vice President Vice President Marketing Marketing Manager F Manager G Manager H
Common Types of Departmentalization (1 of 4) Functional Product Divisional Customer Territory Matrix 6 - 10
Common Types of Departmentalization (2 of 4) Functional 6 - 11 Departmentalization involves organizing departments around essential input activities, such as: production and operations finance and accounting marketing and sales human resources Product (Service) Departmentalization involves organizing departments around goods and services provided
Common Types of Departmentalization (3 of 4) Customer 6 - 12 Departmentalization involves organizing departments around the needs of different types of customers with unique needs calling for different sales staffs and products Divisional Departmentalization (M-Form) the firm develops independent lines of business that operate as separate companies, all contributing to the corporation profitability Territory (Geographic) Departmentalization involves organizing departments in each area in which the enterprise does business
Common Types of Departmentalization (4 of 4) Matrix Departmentalization combines the functional and product departmental structures Combination many large companies have more than one form of departmentalization 6 - 13
6 - 14 American and Japanese Organization Structures Division of labor tends to be a bit less specialized in Japan Both countries use the same types of departmentalization American organizations tend to be quicker to hire, lay off, and to change jobs than the Japanese
6 - 15 THANKS
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