Organization Behavior and

Organization Structure

Organization Behavior
A field of study that investigates the impact
that individuals, groups, and structure have
on behavior within organizations, for the
purpose of applying such knowledge
toward improving an organization
effectiveness

Stephen P. Robbins & Timothy A. Judge

Organization Structure

The way in which job tasks are formally

divided, grouped, and coordinated

Stephen P. Robbins & Timothy A. Judge

6 elements of Organizations
Structure

Stephen P. Robbins & Timothy A. Judge

1. Work Specialization
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.

2. Departmentalization

The basis by which jobs in an organization

are grouped together. For instance every
organization has its own specific way of
classifying and grouping work activities.

2. Departmentalization
5 common forms of departmentalization:
1. Functional departmentalization
2. Product departmentalization
3. Geographical departmentalization
4. Process departmentalization
5. Customer departmentalization

Functional
Departmentalization
Plant
Manager

Manager
engineerin
g

Manager
Accountin
g

Positive

Manager
manufactu
ring

Manager
HR

Negative

Efficiencies from putting

together similar specialties and
people with common skills,
knowledge and orientations

Poor communication across

functional areas

coordination within functional

area

Limited view of organizational

goals

In- depth specialization

Product Departmentalization
Procter
&
Gambl
e
Tide

Pampe
rs

Positive

Charmi
n

Pringle
s
Negative

Allows specialization in
Duplication of function
particular products and services
Managers can become experts Limited view of organizational
in their industry
goals
Closer to customers

Geographical Plant Manager

Geographical Departmentalization

Vice
President for
Sales

Sales
Director
Western
Region

Sales
Director
Southern
Region

Positive

Sales
Director
Midwestern
Region

Sales
Director
Eastern
Region

Negative

More effective and efficient

handling of specific regional
issues that arise

Duplication of function

Serve needs of unique

geographic markets better

Can feel isolated from other

organizatonal areas

Process Departmentalization
State
motor
vehicle
office
Motor
vehicles
division

Licensing
departmen
t

Positive
More efficient flow of work
activities

Treasury
departmen
t
Negative

can only be used with certain

types of products

Customer
Departmentalization

Positive

Negative

Customers need and problems Duplication of functions

Limited view of organizational
can be met by specialists
goals

3. Chain of Command
Unbroken line of authority that extends from
the top of the organization to the lowest
echelon and clarifies who reports to whom
2 important concept:
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. Unity of Command: The management
principle that each person should report
to only one manager

4. Span of Control

The number of subordinates a manager can

efficiently and effectively direct

5. Centralization and
Decentralization
Centralization: the degree to which decision

making is concentrated at a single point in

an organization
Decentralization:
decision
making
is
pushed down to the managers closest to
the action

6. Formalization

The degree to which jobs within an

organization are standardized

Organizational Design
Traditional
Simple Structure
Bureaucracy
Matrix
Modern
Team Structure
Virtual Organization
Boundaryless Organization

Robbins

Simple Structure
Low degree of

departmentalization, Wide
span of control, High
authority, and Low
formalization.
The company usually small
and young

Simple Structure

Simple Structure
Positive
Negative
The structure is
Limitless decision
simple
making
Flexible, fast and Insufficient if the
company
expands
Low cost in
High risk in
implementation
implementation

Bureaucracy Structure
Specialization on routine operational

task
Formalized regulation, centralized
authority, narrow span of control and
decision making follow the chain of
command
Applied on big and mature organization
with active routine and high
standarization, for example U.S
Department of Education

Bureaucracy Structure

Bureaucracy Structure
Positive
Carry out
standarized task
efficiently
Doesnt require
many employee
training
Increasse
communication in

Negative
Can create conflict
between sub-unit
Overly concern on
rule, hence there is
no initiative from
the employees
Focus on sub-units
objective

Matrix Structure
A combined structure of functional

departmentalization and product

departmentalization
Two chain of command, so each employee
has two superior
Used by company that require fast
response in changing environment, fast
information processing, and dealing with
financial and human resource constrain, for
example : Bussiness Administration school

Matrix Structure

Matrix Structure
Positive
Simplifying the
activity coordination
in the company
Easy to
communicate
between employees
Employee with
specific skill are
spread in the
organization

Negative
Confusion in
handing the report
to either superior
Competition
between managers

Team Structure
Using teams as main force

in coordinating each job

activities
Desentralized decision
making until team level
Require the employee to
work in specialization and
generalization

Virtual Organization
Implenting Outsourcing for

main functions and

sentralization of the
organization
Focusing on organization
specialization
For Example: Apex Digital

Virtual Organization

Virtual Organization
Positive
Flexible in the
implementation

Negative
Lack of control in
the organizations
sub-units

Boundaryless Organization
Chain of command is erased, has unlimited

span of control, and changing department

with empowered team
There are cross-hierarchy team,
participative decision making, and 360
degree work valuation
Employees are driven to generalisazing
rather than specialisazing
Organization remove the boundaries with
external party
For Example : Oticon A/S

MCS & Organizational

Structure
An effective execution of MCS is possible

only when there is an efficient HR

management, excellent work culture as
well as an efficient organization culture
-Subhash Chandra DasOrganization structure
is a principal
component
in
MCSs
structure.
Organizational structure is a tool to
distribute authority needed in using
organizations
resource to achieve
organizations objective. Mulyadi-

Why do Structure Differ?

Mechanistic Model : A structure characterized by extensive

departmentalization,
high
formalization,
a
limited
information network, and centralization
Organic Model: A structure that is flat, uses crosshierarchical
and
cross-functional
teams,
has
low
formalization, possesses a comprehensive information
network, and relies on participate decision making
Major causes or determinants of an organizations structure:
Strategy
Innovation
Cost Minimization
Imitation
Organization size
Technology
Environment