Organisational Structure

Topics: Organizational structure, Management, Organization Pages: 8 (1996 words) Published: February 13, 2011
Organisation structure2
Types of structures3
Functional Structure3
Divisional Structure4
The Matrix Structure5
Team-based structure6
Network structure7
Factors that affect structure7

The purpose of this paper is to explore organisational structure, examine the aspects that impact the structure of an organisation and discuss how managers should use this information. Organisation structure

The organising process leads to the creation of organisation structure.Organisation structure can be defined as the framework in which the organisation defines how tasks are divided, resources are deployed and departments are coordinated (Samson & Daft, 2009, p. 328). The structure of an organisation should be set up in such a way as to help the organisation accomplish its mission in an efficient and effective manner. The mission of an organisation can be defined by its mission statement. “A mission statement is designed to answer the most fundamental questions for every organization: Why do we exist? What are we here for? What is our purpose? As such, mission statements form the corner-stone and the starting-point for any major strategic planning initiative” (Christopher K. Bart, 2001, p. 19). An organisation’s structure can be represented visually with an organisation chart (Samson & Daft, 2009, p. 328). Structure has three components: complexity, formalisation and centralisation. Complexity refers to thedegree of specialisation of an organisation’semployees, how labour is divided, thenumber of levels and geographicaldispersion. Formalisation is concerned withthe degree of rules and procedures, andcentralisation refers to levels of decisionmaking (Holtzhausen, 2002, p. 325). The characteristics of organisation structure include work specialisation (the degree to which organisational tasks are subdivided into individual jobs; also called division of labour), chain of command (An unbroken line of authority that links all individuals in the organisation and specifies who reports to whom), authority (The formal and legitimate right of a manager to make decisions, issue orders and allocate resources to achieve organisationally desired outcomes) and responsibility(The duty to perform the task or activity an employee has been assigned), span of managerial control (the number of employees who report to a supervisor), and centralisation(The location of decision authority at a single point, usually near top organisational levels) and decentralisation(The dispersed location of decision authority, usually near lower organisational levels). These dimensions represent the vertical hierarchy and define how authority and responsibility are distributed. Departmentalization describes how organisation employees are grouped (Samson & Daft, 2009). Types of structures

The three most common generic organizational structures are the functional structure, the divisional structure and the matrix structure. There are also hybrid structures consisting of network structure and team structure. Functional Structure

The functional structure is a direct descendant of the bureaucratic structure. It is based on a group’s function or dedicated activities in an organization such as sales and marketing, finance and operations. The structure’s effectiveness is based on this division of labour. Smaller tomedium-sized organizations with limited product rangestend to favour the functional structure (Martinsons & Martinsons, 1994, p. 24). Advantages of functional structure

Efficient use of resources, economies of scale
In-depth skill specialisation and development
Career progress within functional departments
Top manager direction and control
Excellent coordination within functions
High-quality technical problem solving
Best with one or few types of products
Disadvantages of functional structure
Poor communication across functional departments
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