Organizational Structure and Design

1. Organizational Structure and Design Chapter 5 BUSM 12 Ms. Stewart

2. Organizational Structure • How job tasks are formally divided, grouped, and coordinated within an organization • When managers develop or change the structure, they are engaged in organizational design

3. Purposes of Organizing

4. Departmentalization • This is the basis on which jobs are grouped together • Common forms: • Functional • Geographical • Product • Process • Customer

5. Functional Departmentalization • Groups jobs by functions performed

6. Geographical Departmentalization • Groups jobs on the basis of territory or geography

7. Product Departmentalization • Groups jobs by product line

8. Process Departmentalization • Groups jobs on the basis of product or customer flow

9. Customer Departmentalization • Groups jobs on the basis of customer who have common needs or problems

10. Traditional Organization Structure

11. Line and Staff Managers • Line managers are responsible for essential activities of the organization, including production and sales • Staff Managers work in supporting activities of the organizations (such as Human Resources or Accounting)

12. Centralization • The degree to which decision making is concentrated at a single point in the organization • Example: If the top managers make the organization's key decisions with little to no input from below

13. Decentralization • The degree to which lower level employees provide input or actually make decisions