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Determinants of Organizational Structure

The document discusses the key determinants of organizational structure, which include structural dimensions like formalization, specialization, hierarchy of authority, and centralization, as well as contextual dimensions like size, technology, environment, goals, and culture. It then examines the main components of organizational design such as work specialization, departmentalization, chain of command, span of control, and centralization versus decentralization. Formalization refers to the level of written documentation and standardization within an organization.

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90 views

Determinants of Organizational Structure

The document discusses the key determinants of organizational structure, which include structural dimensions like formalization, specialization, hierarchy of authority, and centralization, as well as contextual dimensions like size, technology, environment, goals, and culture. It then examines the main components of organizational design such as work specialization, departmentalization, chain of command, span of control, and centralization versus decentralization. Formalization refers to the level of written documentation and standardization within an organization.

Uploaded by

parimalam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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DETERMINANTS OF

ORGANIZATIONAL
STRUCTURE
DETERMINANTS OF ORGANIZATION
Organizational Determinants Includes
 Structural dimensions

Formalization
Specialization 
Hierarchy of authority 
Centralization
Professionalism
Personnel ratios 
 Contextual dimensions

Size 
Organizational technology 
The environment 
Organization’s goals and strategy 
Organization’s culture 
Structural dimension:
• provide labels to describe the internal characteristics 
of an organization
• create a basis for measuring and comparing organization 

Contextual dimension:
• Includes its size, technology, environment, and goals.

•   Describe the organizational setting that influence and 
shapes the structural dimensions.
• Represent both the organization and the environment. 

• Contextual dimensions can be envisioned as a set of 

overlapping element that underlie an organization’s 
structure and work processes.
Formalization:
 pertains to the amount of written documentation in the organization.

 Documentation includes procedures, job descriptions, regulations, and policy manuals.

Specialization 
 is the degree to which organizational tasks are subdivided into separate jobs. 

Hierarchy of authority 
o hierarchy is related to span of control 

Centralization
 refers to the hierarchical level that has authority to make a decision.

 include purchasing equipment, establishing goals,
choosing suppliers, setting prices, hiring employees and deciding marketing territories
Professionalism
 the level of formal education and training of employees.

 considered high when employees require long periods of 

training to hold jobs in the organization. 
Personnel ratios 
 to the deployment of people to various functions and departments.

 Personnel ratios include the administrative ratio, the clerical ratio,

 the professional staff ratio, and the ratio of indirect to direct labor 
employees. 
 Size is the organization’s magnitude as reflected in the 
number of people in the organization. It can be measured for
 the organization as a whole or for  specific component
such as a plant or division. 
 Organizational technology refers to the tools, techniques, and actions used t
o transform inputs into outputs
 The environment includes all elements outside the

 boundary of the organization. Key elements include the
 industry, government, suppliers, customers, and the financial 
community.
 The organization’s goals and strategy define the purpose 

and competitive techniques that set it apart from other 
organizations. 
 An organization’s culture is the underlying set of key values, 

beliefs, understandings, and norms shared by employees.
COMPONENTS OF ORGANIZATIONAL
DESIGN
 Work specialization
 Departmentalization

 Chain of command

 Span of control

 Centralization and decentralization

 Formalization
WORK SPECIALIZATION

 The degree to which tasks in the organization are


subdivided into separate jobs
 Division of Labor

(a)Makes efficient use of employee skills (b)Increases


employee skills through repetition
(c)Less between-job downtime increases
productivity
(d)Specialized training is more efficient
(e)Allows use of specialized equipment
DEPARTMENTALIZATION
 The basis by which jobs are grouped together. Activities are
grouped by:
(a)Function
(b)Product
(c)Geography
(d)Process
(e)Customer
(f)Authority

The rights inherent in a managerial position to give orders and


to expect the orders to be obeyed
CHAIN OF COMMAND
 The unbroken line of authority that extends from the
top of the organization to the lowest level and clarifies
who reports to whom.
 Unity of Command-A subordinate should have only one
superior to whom he or she is directly responsible
SPAN OF MANAGEMENT /SPAN OF
CONTROL
 Span of Control refers to the act of establishing the
number of jobs to be included in a specific group. It is
the volume of interpersonal relationships that a single
manager can handle. Wider spans of management
increase organizational efficiency.
CENTRALIZATION AND DECENTRALIZATION

 Centralization is the location of the decision-making


authority in the hierarchy of the organization. It is
the degree to which decision making is concentrated
at a single point in the organization

 Decentralization is the degree to which decision


making is spread throughout the organization.
FORMALIZATION

 The degree to which jobs within the organization are


standardized. It is the extent to which expectations
regarding the means and ends of work are specified and
written down. It is effective only if are enforced.

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