Organizational Structure

Organizational Structure

Introduction

Organizational structure determines the division of work between workers and informal channels of coordination and chain of command. Organizational structure governs relations within the institution and identifies responsibilities. Organizational structures and design patterns are actually the organization of a company to meet the proposed goals and achieve the desired objective. To select an appropriate structure it is necessary to understand that every company is different, and may adopt the organizational structure that best suits their needs and priorities this means that the structure must engage and respond to planning and it also must reflect the situation of the organization. Organizational structure refers to the formal and informal manner in which people, job tasks, and other organizational resources configure and coordinate. Although, organizational structure sounds like a singular characteristic, it composes of a number of dimensions, because there are multiple ways the employees within an organization and the job tasks that are carried out can be structured. The most commonly studied aspects of the organizational structure include formalization, centralization, and complexity (Leavitt, 1992).

There are six key elements of Organization Structure

specialization of work;

departmentalization;

chain of command;

control zone;

centralization and decentralization;

Formalization.

Specialization of Work

Ford showed that labor productivity is much higher if workers specialize in performing specific operations. Today for the description of the extent to which the production activities of the organization is divided into separate tasks (operations), the term work or specialized division of labor (Lawrence, 1997).

Departmentalization

Once the works are divided by specialty, it is necessary to group them in order to effectively coordinate the implementation of related tasks. Departmentalization this is the basis on which the grouping of works. Finance, HR, and Marketing department are examples of it.

Chain of command

The command chain is a chain of unbroken power, which extends from the top of the organization to its lower echelons. It defines who is subject to whom the organization. Chain of command gives the employee an answer, for example, the question: "Who can I contact if I have such and such a problem arises?" Or "Who do I obey?"

Area of control

How many subordinates can effectively manage the head? The question of the control zone is extremely important because it largely determines the number of hierarchical levels, as well as leaders in the organization.

Centralization and decentralization

In some organizations, top management takes almost all the solutions, and lower-level managers can only carry out the instructions received from "above". At the opposite extreme are organizations in which decisions are made by those leaders who are "closest" to the problem.

Formalization

By formalization, we understand the degree of standardization of positions in organizations. If a position is characterized by a high degree of formalization, the person occupying it has only minimal freedom of choice with regard to his work, timing and methods of its implementation.

Organizational Structure of Selected Organization

Wal-Mart Stores, Inc. has a divisional structure such as Wal-Mart Realty, Wal-Mart International, Wal-Mart Specialty Stores, Sam's. This structure develops through separate, semi-autonomous units or divisions. Furthermore, an organization may have various divisions and every division develops its own ...