ORGANIZATION DESIGN

A step-by-step methodology which identifies dysfunctional aspects of work flow, procedures, structures and systems, realigns them to fit current business realities/goals and then develops plans to implement the new changes.

“Or”

The manner in which a management achieves the right combination of differentiation (subdivision of functional or departmental units) and integration (linking of differentiated units)  of the organization’s operations, in response to the level of uncertainty in its external environment.

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- Stephen P Robbins

KEY ELEMENTS IN ORG. DESIGNW

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• Describes the degree to which tasks in an organization are divided into separate jobs. The main idea of this organizational design is that an entire job is not done by one individual. It is broken down into steps, and a different person completes each step. Individual employees specialize in doing part of an activity rather than the entire activity. C

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• It is defined as a continuous line of authority that

extends from upper organizational levels to the lowest levels and clarifies who reports to whom. There are three important concepts attached to this theory:1. Authority: Refers to the rights inherent in a managerial position to tell people what to do and to expect them to do it.2. Responsibility : The obligation to perform any assigned duties.3. Unity of command: The management principle that each person should report to only one manager. S

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• It is important to a large degree because it determines the number of levels and managers an organization has.

• Also, determines the number of employees a manager can efficiently and effectively manage.

CENTRALIZATION

The extent to which authority is concentrated at the top management levels.“ Or “the process by which the activities of an organization, particularly those regarding Planning decision-making, become concentrated within a particular location and/or group.

DECENTRALIZATIONThe extent to which authority is delegated to

lower management levels. The lower the level where decisions are made, the greater is the decentralization. Benefits – 1. Decisions are made by those who have the

most knowledge about local conditions.2. Managers have more control over results.

Departmentalization

1. Functional 2. Product3. Geographical4. Process5. Customer

Formalizationdegree to which jobs within the organization are

standardized and the extent to which employee behavior is guided by rules and procedures.

Functional Product

GeographicalProcess

Customer

Organization designs

Traditional

Simple

Functional

Divisional

Contemporary

Team

Boundary Less

Matrix

Project

Autonomous Internal Units

Learning

Business with few employees

Revlon

ChevronTexaco

Asea Brown Boveri (ABB)

William Demant Holding A/S

Whole foods market

Wal-Mart