Organizational Structure
17 Pages Posted: 21 Oct 2008
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Abstract
This note introduces basic principles of organizational design and the advantages of several common organizational structures. The principles of design are fit, differentiation, integration, technology, size, span of control, staffing, unity of command, and line versus staff. The structures diagrammed and described are functional, product, customer, geographic, divisional or M-form, matrix, amorphous, and hybrids. The note also discusses the new emerging Information Age organizational forms, which the authors call "infocracies."
Excerpt
UVA-OB-0361
ORGANIZATIONAL STRUCTURE
Organizational structure is a powerful determinant of organizational behavior. In fact, many people believe decisions about organizational structure to be the central determinant of organizational behavior. Executives are constantly wrestling with whether or not to centralize or decentralize, for example, and how to structure the various functions in their firms. Despite what many executives seem to think, there is much more to organizational design than just rearranging its structure. As Tom Peters has written in a note describing his approach to organizational diagnosis, “structure is not organization.” In this note we will describe some of the major principles that influence the effectiveness of an organizational structure and outline some of the more common structural forms.
A Definition of Organizational Structure
Organizational structure is the framework of reporting relationships in an organization. These relationships can usually be diagramed in the form of an organization chart. The organization chart does not necessarily reflect actual reporting or decision-making relationships in an organization, so we can make a distinction between the formal and the informal structure. This note will deal primarily with the formal structure.
Organizational structure is only one of many aspects of organizational design. Other aspects would include the nature of an organization's leadership, the various systems operating in it, and organizational culture. Organizational structure reflects the way in which work in an organization is divided. Historically, organizations have developed a number of ways to do this. The Information Age is creating even more forms as we move ahead.
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Keywords: organizational design, organizational structure
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