UNIT 5

Foundations of OB:
• Organizational Structure
• Work Specialization
• Departmentalization
• Span of Management

Organizational Culture:
• Nature – Creating and
• Maintaining a Culture
 Organizational Structure
 An organization is basically a group of people who collectively work to achieve
common goals.
 Division of responsibilities under a ranking system is the backbone of any
organization.
 In order to understand an organization, we need to take a close look at its
organizational structure.
 This will tell us how all members of the organization function.
 An organizational structure is simply the pattern or network of division of these roles
and responsibilities.
 An organizational structure is not an end but rather the means to an end.
 When people divide responsibilities and coordinate with each other, it becomes easy
to function is the entire purpose of an organization structure.
 Members of an organization create it just to achieve their common aims.
The Way in which job tasks are formally divided, grouped and coordinated
Centralized vs. Decentralized Organizational Structures

Centralised Decentralised
1) Keep decision making power at the top of the 1) Power and authority to make decisons delegate
hierarchy from head office to lower and local levels
2) Don't delegate to local or lower levels 2) Less uniformity
Ex: Military, Armed Forces 3) Decisions made in relation to local circumstances
Ex: Johnson & Johnson
TYPES OF ORGANIZATIONAL BEHAVIOUR
Work Specialization
 The degree to which tasks are subdivided into separate jobs
 Work specialization, sometimes called a division of labor
 organization divides individual tasks into separate jobs.
 The organizational structure refers to the type of framework a company uses to distinguish power and
authority, roles and responsibilities, and the manner in which information flows through the
organization.
Mobile App Development
PROS AND CONS:

S.no Pros of work specialization Cons of work specialization

1 Defined skill set Becomes outdated

2 Upward growth Mastering one skill set

3 Good package Omitted from managerial positions

4 Defines quality and excellence Gets boring

5 Brings in trust Cannot multitask

6 Proud of their work Restrictions to apply

7 Increases productivity Company suffers

8 Wastage costs cut down Limited skill set

9 Higher revenue Difficult to find jobs

10 Without supervision Loses overall sight

11 Employability Cannot take breaks

12 Cannot be replaced No socializing opportunities

13 Solidarity within groups More absenteeism

14 Fewer job improvements

15 Not meeting end-users

Departmentalization
 The basis by which jobs are grouped.
 Departmentalization refers to the formal structure of the organization, composed of various
departments and managerial positions and their relationships with each other.
 Departmentalization is the efficient and effective grouping of jobs into meaningful work units to
coordinate numerous jobs
Life Insurance Company
New Business
Development

Business
Underwriting
Management

Life
Insurance
Company

Policy
Finance
Administration

HR
TYPES:
 Functional Departmentalization:
Functional departmentalization groups together jobs which are involving the same or similar activities.
It allows the organization to staff all important positions with functional experts and facilitates coordination and integration.
 Departmentalization by Territory:
Territory method is followed where; unless to local conditions appear to offer advantages, such as low cost of operation and
opportunities to capitalize on attractive local conditions as they arise.
Territorial departmentalization is especially popular for sales where division appears feasible according to some geographic
market segregation.
 Departmentalization of the organization by customer group:
Customer departmentalization is where the organization’s activities are ready to respond to and interact with specific customers
or customer groups.
This organizational form is used when the great emphasis is placed on effectively serving different customer types.
 Matrix departmentalization:
Matrix departmentalization attempts to combine functional and task force (project) departmentalization designs to improve the
synchronization of multiple components for a single activity (i.e., a moon launch), to improve the economics of scale, and to
better serve the customer and company.
 Planning Task Force:
The planning task force is most often formed when the organization requires addressing special circumstances. It is more
preferable, and efficient than maintaining a different planning staff or department.
Chain of Command
The unbroken line of authority that extends from the top of the organization to
the lowest echelon and clarifies who reports to whom.

Line of Authority
Board of
Directors

Managing
Director

Personnel Finance Marketing Production

The chain of command is a very traditional way of structuring a company's authority levels
It's common to see the same chain of command structure at various organizations, from customer-based businesses to
government entities.
Advantages: Disadvantages:

*Increased efficiency *Less collaboration

*Clear direction *Slow communication
*Stability *Decreased employee empowerment
*Accountability *More competition
*Structured responsibility
*Outside understanding

Flat chain of command

 A flat chain of command is when a manager has a lot of control within an organization.
 They may have a lot of individuals and teams reporting to them, and so the chain of command of that organization looks more
flat or horizontal.
 There may be the business owner or founder, followed by a middle manager and then the group of employees.
Vertical chain of command
 A vertical chain of command has more steps and levels to its hierarchy than a flat chain of command.
 Each manager is typically only responsible for managing a few associates, so their level of control is more narrow and usually
confined to their department.
 With a vertical chain of command, you may notice that the company's rules, processes and procedures are more fixed, and
they come from the top leaders of the organization who then give other managers the responsibility of disseminating
Span of Control / Span of Management
Number of subordinates a manager can efficiently and effectively direct.
It is a resource management term and refers to the number of employees who report to a manager.
A span of control means a manageable number of employees that a manager can control.
The bigger the staff, the bigger the span of control.

Factors Types
• Wide Span of Control
Organizations with flat structures will
have few hierarchical levels and a wide span
of control. Here, supervisors supervise many
employees.

• Narrow Span of Control

Organizations with many hierarchical
levels will have a narrow span of control.
Here, managers supervise fewer employees.
Organizational Culture
 Organizational
Culture
Organizational culture/corporate culture includes-

 The ways the organization conducts its business, treats its employees, customers, and the
wider community
 The extent to which freedom is allowed in decision making, developing new ideas, and
personal expression
 How power and information flow through its hierarchy, and
 How committed employees are towards collective objectives.

Robbie Katanga, “Organizational Culture is how organizations do things.”

Alan Adler, “Organizational culture is civilization in the workplace.”

Organizational Cultures Start
1. Founder
2. creates a core group
3. core group begins to act in concert to create an organization
4. common history begins to be built.

High vs. Low-Context Culture

 The concept of high- and low-context culture relates to how an employee’s thoughts, opinions,
feelings, and upbringing affect how they act within a given culture.

 Low-context culture means that businesses in these places have direct, individualistic
employees who tend to base decisions on facts.

 High-context cultures are the opposite in that trust is the most important part of
business dealings.
Characteristics
seven characteristics that are common in the context of organizational culture

 Innovation (Risk Orientation)

 Attention to Detail (Precision Orientation)
 Emphasis on Outcome (Achievement Orientation)
 Emphasis on People (Fairness Orientation)
 Teamwork (Collaboration Orientation)
 Aggressiveness (Competitive Orientation)
 Stability (Rule Orientation)

Types
Steps of managing organizational culture
1. Evaluate your current culture and performance,
2. Clarify your initial vision.
3. Clarify values and expected behaviors.
4. Clarify strategic priorities.
5. Engage your team in defining SMART goals.
6. Clarify and track key measures,
7. Maintain a management system for priorities and goals.
8. Manage communication habits and routines.
9. Build motivation throughout the process.
Creating a Positive Organizational Culture
Building on Employee Strengths
Benefit from the employees strengths
Rewarding More than Punishing
Pay and Promotions
Emphasizing Vitality and Growth
Organization can make employee more effective personally and
professionally.