CHAPTER 8 ORGANIZATIONAL

STRUCTURE
i. Purpose & types of Organizational
Structure
ii. Accountability in an Organizational
Structure
iii. Distributing Authority among the job
positions

Introduction

The typically hierarchical arrangement of lines of

authority, communications, rights and duties of

an organization. Organizational structure determines how
the roles, power and responsibilities are assigned
, controlled, and coordinated, and how information
flows between the different levels of management.

Purpose of Organizational
Structure
Duties and responsibilities can be understood by
every member
Turning groups of individuals into teams and getting
everyone pointed the same direction
Helping to orient new employees to the company and
supplying them with career and succession plans
Understanding the complex nature of the structures
and helping to simplify relationship
Empowering people to understand the strategic vision
of the company by defining dependencies and
relationship

Types of Organizational Structure

The
The
The
The
The

Functional Structure
Divisional Structure
Matrix Structure
Line & Staff Structure
Project Structure

THE FUNCTIONAL STRUCTURE

Functional structure this kind of organizational structure

classifies people according to the function they perform in

the organization.
The functional structure works well for small businesses in
which each department can rely on the talent and
knowledge of its workers and support itself.
However, a functional structure is that the coordination and
communication between departments can be restricted by
the organizational boundaries of having the various
departments working separately.

Grouping by similar work specialties

THE DIVISIONAL STRUCTURE

A type of organizationalconfigurationthatgroups
together those employees who are responsible for a
particular product typeormarketserviceaccording
towork flow.
The divisional structure of abusinesstends to
increaseflexibility, and it can also be broken down
further
into
product,
market
and
geographicstructures.

THE MATRIX STRUCTURE

This is a structure, which has a
combination of function and product
structures.
This combines both the best of both
worlds to make an efficient organizational
structure.
Most complex organizational structure.

A Grid of Functional & Divisional for

Two Chains of Command

THE LINE AND STAFF STRUCTURE

Line and structure combines the line structure
where information and approvals come from top
to bottom, with staff departments for support
and specialization.
Line and staff organizational structures are more
centralized.
Managers of line and staff have authority over
their subordinates, but staff managers have no
authority over line managers and their
subordinates.

Line and staff

hierarchies:

management

has

two

separate

(1)the line hierarchy in which the departments are revenue

generators (manufacturing, selling), and their managers
are responsible for achieving the organization's main
objectives by executing the key functions (such as policy
making, target setting, decision making)
(2)the staff hierarchy, in which the departments are
revenue consumers, and their managers are responsible
for activities that support line functions (such as
accounting, maintenance, personnel management).

THE PROJECT STRUCTURE

Organizational units to complete projects of a long

duration.
Each project is vitally important to the organization.

The size of the project team varies from one project to

another.

The activities of a project team are coordinated by the

project manager who has the authority to obtain advice
and assistance of experts

The core concept of project organization is to gather a

team of specialist to work on and complete a particular
project.

THE PROJECT STRUCTURE

P r e s id e n t
V ic e P r e s id e n t P r o j e c t A

V ic e P r e s id e n t P r o j e c t B

V ic e P r e s id e n t P r o je c t C

F in a n c e

F in a n c e

F in a n c e

M a n u f a c t u r in g

M a n u f a c t u r in g

M a n u f a c tu r in g

ACCOUNTABILITY IN ORGANIZATIONAL
STRUCTURE
Accountability is the responsibility to
complete a job, either personally or by
delegation, along with the duty to report that
the job has been completed.

 To meet these responsibilities, the new employee

must also have the authority to achieve them.
Authority is delegated along with the
responsibility. The manager, however, is still
ultimately responsible. By assigning some of his
or her responsibilities, the manager transfers or
creates accountability.
If the employee does not exercise the
responsibility properly, the manager can always
withdraw the authority. Delegation without
control is abdication.

Distributing Authority among the job

positions
In practice, the process of management works in
conjunction with the process of delegation.
Since management is the process of getting results through
others, delegation facilitates that process by assigning
responsibilities, delegating authority, and exacting
accountability by employees.

Distributing Authority among the job

positions
The accomplishment of the assigned responsibilities should
equal the defined objectives. The manager then develops
standards of performance with each key employee.
The successful accomplishment of the standards of
performance should equal the assigned responsibilities.
It continues with the appraisal of key subordinates rated
against the agreed-upon standards of performance and closes
with evaluation and feedback to the beginning of the next
budget cycle.