10/5/17

Organizational Culture and

Design
BA 101 – Introduction to Management
Louie Lee

What is Organizing?

ORGANIZING
The integrative
process of
arranging the
activities, people
and resources of
the organization in
a way that
systematically
contributes to the
organization’s
goals

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Depicting the Organization

ORGANIZATION CHART
A diagram that shows the
structure of the
organization that includes:
• The title of each manager’s
position,
• Who is accountable to
whom,
• and who has authority for
each area.

Organization Chart

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What are the components of organization design?

WORK SPECIALIZATION

The degree of discretion

within an individual’s
stated responsibility
within the organization;
assumes specific job
descriptions

Work specialization and productivity

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What are the components of organization design?

SPAN OF CONTROL

The number of people

directly reporting to the
next level in the
organization chart; assumes
coordination through direct
supervision

Tall versus flat organizations

Chief
Executive
Tall hierarchy

Relatively narrow
Chief span of control
Flat hierarchy

Executive

Relatively wide
span of control

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What are the components of organization design?

CENTRALIZATION
The degree of concentration of planning and
decision-making activities to an organization’s
leaders

Forces affecting centralization / decentralization

Centralization
• Organizational crises
• Management desire for control
• Increase consistency, reduce costs

• Complexity — size, diversity

• Desire for empowerment

Decentralization

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What are the components of organization design?

FORMALIZATION
The degree to which organizations standardize
behavior through rules, procedures, formal training
and related mechanisms.

What are the components of organization design?

MECHANISTIC ORGANIC
Specialists Generalists
WORK SPECIALIZATION

Narrow Wide
SPAN OF CONTROL

Centralized Decentralized
CENTRALIZATIO
N
Formal Informal
FORMALIZATION

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What are the components of organization structure?

DEPARTMENTALIZATION
• How employees and their activities are
grouped together
• Areas of common supervision
• Establishes work teams and supervision
structure
• Creates common resources, measures of
performance, etc.
• Encourages informal communication among
people and sub-units

Simple Departmentalization

Few employees reporting directly to one person

(owner); better for smaller organizations

Owner

Employee Employee Employee

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Functional Departmentalization

• Organizes employees around skills or

other resources (marketing, production)
• Creates subordinate goals

President

Finance Production Marketing

Divisional Departmentalization

• Organizes employees around outputs,

clients, or geographic areas

President

Enterprise Laserjet Consumer

Systems Solutions Products

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Project-Based Matrix Departmentalization

• Employees are temporarily assigned to a

specific project team and have a permanent
functional unit
President
Engineering Marketing Software
Manager Manager Manager

Project A
Manager

Project B
Manager

Project C
Manager