ACKNOWLEDGEMENT

In the name of Allah, The Most Gracious and The Most Merciful. We would like to thank

Almighty ALLAH for giving us the ability and strength to complete our research project. It was

His will and guidance that we were able to take this report as a challenge and in the end, He

bestowed us with his blessings.

A work is never a work of an individual. A special note of thanks to our honorable Teacher Sir

Muhammad Faisal Umer, the lecturer of Iqra University, for providing his valuable guidance,

comments, ideas, and suggestions throughout the course without his support and guidance this

project of research paper I would not have been accomplished. 

Moreover, we are thankful to our respective parents for providing us the opportunity to receive

higher education in such an accomplished institution that required us to carry out such projects of

research paper I that expanded the dimension of our minds. 

A special thanks to our team members, who have wholeheartedly worked to bring the best out of

this project. We all have learned and earned valuable experience during this project.
 ii

ABSTRACT

Conceptualization of organizational approaches is the manifestation of systematic thought. The

organization is composed of elements, relations between elements and structure as a generality

composing a unit. Structure is high combination of the relations between organizational elements

forming existence philosophy of organizational activity. Systematic view of organization to

structure shows that structure is composed of hard elements on one side and soft elements on the

other side. The review of literature views structural relations from various aspects.

Organizational structure is a way or method by which organizational activities are divided,

organized and coordinated. The organizations created the structures to coordinate the activities of

work factors and control the member performance. Organizational structure is shown in

organizational chart.

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S.NO DESCRIPTION PAGE

NO.

1 Acknowledgement 1

2 Abstract 2

3 Introduction

1. 1. Organization structure definition: 5-15

2. Conceptualization of organizational structure:

3. Dimensions of organizational structures:

Approaches to Organizational Design (objectives)

4.

4 Different types of social structures Simple structure 16-19

5
Conclusion
20

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 Introduction

The organizational structures are widely implemented: functional, vertical, and staff

vertical types. The functional structure is also referred as bureaucratic model and

separates all workforces depending on the specialization areas of the workers. Vertical

organizational structures can be count as the most preferred structures in all over the

world. This type is mainly dependent to hierarchy relations. On the contrary, vertical-

staff model is commonly implemented in specific projects and its usage is very limited in

global world. The organizational structures have three dimensions as hierarchy,

functional and inclusion dimensions. Structure refers to the relations between the

components of an organized whole. Thus, structure concept can be used for everything.

For example, a building is a structure of the relationship between foundation, skeleton,

ceiling and wall. The body of human being is a structure consists of the relations between

bones, organs, blood and tissues. Organizational structure is the framework of the

relations on jobs, systems, operating process, people and groups making efforts to

achieve the goals. Organizational structure is a set of methods dividing the task to

determined duties and coordinates them.

1
1. Organization structure definition:

Organizational structure is the framework of the relations on jobs, systems, operating

process, people and groups making efforts to achieve the goals. Organizational structure
is a set of methods dividing the task to determined duties and coordinates them. Structure
is not a coordination mechanism and it affects all organizational process. Organizational
structure refers to the models of internal relations of organization, power and relations
and reporting, formal communication channels, responsibility and decision making
delegation is clarified. Helping the information flow is one of the facilities provided by
structure for the organization. Organizational structure should facilitate decision making,
proper reaction to environment and conflict resolution between the units. The relationship
between main principles of organization and coordination between its activities and
internal organizational relations in terms of reporting and getting report are duties of
organization structure.
a. Conceptualization of organizational structure: Conceptualization of

organizational structure is the manifestation of systematic thinking.

Organization consists of elements, relations between elements and

structure of relations as a generality composing a unit. Structure is high

combination of the relations between organizational elements forming

existence philosophy of organizational activity. Systematic view of

organization to structure shows that structure is composed of hard

elements on one side and soft elements on the other side. At the end of

hard dimension, there are tangible elements as groups and hierarchy

organizational units. The relations between these units and groups show

soft element in organization structure. At the end of soft continuum

dimension, judgment of organization people to structure can be observed.

The review of literature views structural relations from various aspects.

According to the study of the identification of three dimensions:

Hierarchy, functional and inclusion, it is a unique study.

 Three dimensions of his study are as followings: Hierarchy dimension: It

shows relative ranks of organizational units by similar method of

organizational chart. Functional dimension: It shows different works

performed in organization. Inclusion dimension: The close or far distance of

each person in organization to central core of organization. The proper

combination of mentioned dimensions shows formal structure as manifested

in organizational chart. The reality is that there are many organizational

forms and they cannot be easily explained by organizational chart.

2. Dimensions of organizational structures: Organizational structure is manifested in

organizational chart. In planning organizational structure, there are three principles:

a) Organizational structure determines formal relations and reporting in

organization and it shows the number of levels in the hierarchy and it defines

the span of the control of managers.

b) Organizational structure determines the position of people as working in

group in a unit and it divides the units in the entire organization.

c) Organizational structure includes the design of systems by which all units are

coordinated and effective relation in organization is guaranteed.

 Organizational structure can be affected by goals, strategy, environment,

technology, organization size. These variables are key and content-based and

indicate the entire organization and its position between the organization and

environment. Content variables can be important as they show organization

and the environment in which there are structural variables. Structural

variables indicate internal features of an organization and present a basis by

which the organizations can be measured and their structure features can be

compared with each other.

Approaches to Organizational Design (objectives)

Managers must make choices about how to group people together to perform their work.

Five common approaches functional, divisional, matrix, team, and networking help

managers determine departmental groupings (grouping of positions into departments).

The five structures are basic organizational structures, which are then adapted to an

organization's needs. All five approaches combine varying elements of mechanistic and

organic structures. For example, the organizational design trend today incorporates a

minimum of bureaucratic features and displays more features of the organic design with a

decentralized authority structure, fewer rules and procedures, and so on.

  Centralization and Decentralization

Centralization describes the degree to which decision making is concentrated at a single

point in the organization. If top managers make the organization’s key decisions with

little or no input from below, then the organization is centralized. In contrast, the more

that lower-level employees provide input or actually make decisions, the more

decentralization there is. Keep in mind that the concept of centralization/decentralization

is relative, not absolute an organization is never completely centralized or decentralized.

Few organizations could function effectively if all decisions were made by only a select

group of top managers; nor could they function if all decisions were delegated to

employees at the lowest levels. Nestle uses decentralized marketing with centralized

production, logistics, and supply chain management.

 Formalization

Formalization refers to the degree to which jobs within the organization are standardized

and the extent to which employee behavior is guided by rules and procedures. If a job is

highly formalized, the person doing that job has little freedom to choose what is to be

done, when it is to be done, and how he or she does it.

 Span of Control:

How many employees can a manager efficiently and effectively manage? This question

of span of control is important because, to a large degree, it determines the number of

levels and managers an organization needs. All things being equal, the wider or larger the

span, the more efficient the organization.

  Functional structure

The functional structure group positions into work units based on similar activities, skills,
expertise, and resources. Production, marketing, finance, and human resources are
common groupings within a functional structure.

As the simplest approach, a functional structure features well‐defined channels of

communication and authority/responsibility relationships. Not only can this structure
improve productivity by minimizing duplication of personnel and equipment, but it also
makes employees comfortable and simplifies training as well.

But the functional structure has many downsides that may make it inappropriate for some
organizations. Here are a few examples:

 The functional structure can result in narrowed perspectives because of the

separateness of different department work groups. Managers may have a hard
time relating to marketing, for example, which is often in an entirely different
grouping. As a result, anticipating or reacting to changing consumer needs may be
difficult. In addition, reduced cooperation and communication may occur.
 Decisions and communication are slow to take place because of the many layers
of hierarchy. Authority is more centralized.
  The functional structure gives managers experience in only one field their own.
Managers do not have the opportunity to see how all the firm's departments work
together and understand their interrelationships and interdependence. In the long
run, this specialization results in executives with narrow backgrounds and little
training handling top management duties.

 Divisional structure

Because managers in large companies may have difficulty keeping track of all their
company's products and activities, specialized departments may develop. These
departments are divided according to their organizational outputs. Examples include
departments created to distinguish among production, customer service, and geographical
categories. This grouping of departments is called divisional structure. These departments
allow managers to better focus their resources and results. Divisional structure also
makes performance easier to monitor. As a result, this structure is flexible and responsive
to change.
However, divisional structure does have its drawbacks. Because managers are so
specialized, they may waste time duplicating each other's activities and resources. In
addition, competition among divisions may develop due to limited resources.
  Matrix structure

The matrix structure combines functional specialization with the focus of divisional
structure. This structure uses permanent cross‐functional teams to integrate functional
expertise with a divisional focus.

Employees in a matrix structure belong to at least two formal groups at the same time a
functional group and a product, program, or project team. They also report to two bosses
one within the functional group and the other within the team.

This structure not only increases employee motivation, but it also allows technical and
general management training across functional areas as well. Potential advantages
include

 Better cooperation and problem solving.

 Increased flexibility.
 Better customer service.
 Better performance accountability.
 Improved strategic management.

Predictably, the matrix structure also has potential disadvantages. Here are a few of this
structure's drawbacks:

 The two‐boss system is susceptible to power struggles, as functional supervisors

and team leaders vie with one another to exercise authority.
 Members of the matrix may suffer task confusion when taking orders from more
than one boss.
 Teams may develop strong team loyalties that cause a loss of focus on larger
organization goals.
 Adding the team leaders, a crucial component, to a matrix structure can result in
increased costs.
  Team structure

Team structure organizes separate functions into a group based on one overall objective.
These cross‐functional teams are composed of members from different departments who
work together as needed to solve problems and explore opportunities. The intent is to
break down functional barriers among departments and create a more effective
relationship for solving ongoing problems.

The team structure has many potential advantages, including the following:

 Intradepartmental barriers break down.

 Decision‐making and response times speed up.
 Employees are motivated.
 Levels of managers are eliminated.
 Administrative costs are lowered.

The disadvantages include:

 Conflicting loyalties among team members.

 Time‐management issues.
 Increased time spent in meetings.

Managers must be aware that how well team members work together often depends on
the quality of interpersonal relations, group dynamics, and their team management
abilities.
  Network structure

The network structure relies on other organizations to perform critical functions on a

contractual basis. In other words, managers can contract out specific work to specialists.

This approach provides flexibility and reduces overhead because the size of staff and

operations can be reduced. On the other hand, the network structure may result in

unpredictability of supply and lack of control because managers are relying on

contractual workers to perform important work.

 Different types of social structures Simple structure:

 This is a set of flexible relations and due to limited separation, it has low

complexity. The members of such organization can design organization chart with

focusing on leaders and there is no need to formality. Considering the duties or

management order is done by mutual agreement and coordination and supervision

are direct and informal. Functional structure: The organization with increased

complexity is managed based on simple structure. Normally, functional structure

is used as a tool to fulfill the increasing needs of separation. This is called

function as in this structure; the activities are classified based on logical similarity

of work functions. The functions that are created based on dependent duties and

shared goals. In functional structure, re-work of activities is limited and this

structure is efficient. The aim of this plan is maximizing saving of specialization

scale.

 Multidivisional structure: In organizational development path, if functional

structure is developed, it is turned into multidivisional structure as a tool to reduce

the decisions responsibility by top manager. Multidivisional structure is a set of

separate functional structures reporting a central center. Each functional structure

is responsible for management of daily operation. The central staff is responsible

for supervision and management of organization relation with environment and

strategy.
 Matrix structure: This structure is created with the aim of creating a type of

structure composed of functional and multidivisional structures. The aim of

matrix structure is combining the efficiency of functional structure with flexibility

and sensitivity of multidivisional structure not only based on product logic,

customer or geographical region, but also based on functional logic in

multidivisional structure. In matrix organization, functional specialized

employees work in one or some project teams. This delegation of activities to

employees is done via negotiation between functional and project managers and

sometimes with the presence of people of teams or potential members.

 Hybrid structure: In hybrid structure, one part is dedicated to the type of

structure and another part to another type of structure. The reason of formation of

hybrid structures is combination of advantages of two structures by designers or

the organization is changing. As in hybrid structure, by moving from one section

of structure to another structure, the relations basis is changed and hybrid forms

can be unclear. On the other hand, hybrid structure enables the organization in

which the best and flexible structure is used.

 Network structure: The networks are formed when the organizations are faced

with rapid changes of technology, short life cycles of product and dispersed and

specialized markets.

IN a network, required assets are distributed among some network partners as

there is no unified organization in a network to generate the products or services

and the network is producer or supplier. In a network structure, the partners are

associated via customer supplier relations and a type of free market system is

created. It means that the goods are traded among network partners as in a free

market, they are traded.

 Bureaucracy: Generally, determining criterion, forming, unifying the work

methods as called standardization is key concept or foundation of machine

bureaucracy. If you’re visit banks, chain stores, tax offices, health office,

firefighting, these institutions and offices rely on standardization of methods and

work methods for coordination and good supervision.

 Conclusion

As the current society is with millions of organizations and institutions, it is required that

they are organized in the form of limited configurations. The configurations as suitable

for organizing all organizations and institutions are classified in various models and

forms. Some of the structures are organic, dynamic but others are mechanized and static.

Each of them have their unity compared to other models.