Organisational

structure and
design
 Chapter learning objectives
• Describe the concept of organisational design
and structure;
• Discuss the types of organisational design and
structure; and
• Discuss the six elements of organisational
structure
 Characteristics of Organisations
• Number of Individuals in an Organisation
• Goal-oriented
• Structured and Co-cordinated Activities
• Link with External Environment
ORGANISATIONAL DESIGN
 Forms of work coordination
• Informal communication
– sharing information
– high media-richness
– important in teams
• Formal hierarchy
– direct supervision
– common in larger firms
– problems  costly, slow, less
popular with young staff
• Standardisation
© AAP Image/Dave Hunt
– formal instructions
– clear goals/outputs
– training/skills
Elements of organisational structure

Department- Span of
alisation control

Organisational
structure
elements

Formalisation Centralisation
Span of control
• Number of people directly
reporting to the next level
• Assumes coordination through
direct supervision
• Wider span of control possible
when
– used with other coordinating
methods
– subordinates’ tasks are similar
– tasks are routine
• Flatter structures require wider
span (if same number of people
in the firm)
 The decentralisation of Coca-Cola

Coca-Cola decentralised its

organisational structure by cutting
half of the staff at its Atlanta
headquarters and moving the
regional chieftains closer to their
local markets. In India, decision
making has been moved further
down to different areas of that
© AFP/CORBIS
diverse country.
Functional organisational structure
Organises employees around skills or other resources (marketing,
production)

Chief Executive

Finance Production Marketing

 Divisionalised structure
Organises employees around geographic areas, products or
clients

Chief Executive

Enterprise Laserjet Consumer

systems solutions products
Project-based matrix structure
Employees are temporarily assigned to a specific
project team and have a permanent functional unit
Chief Executive

Engineering Marketing Software

Manager Manager Manager

Project A
Manager

Project B
Manager

Project C
Manager
 Features of team-based structures

• Self-directed work teams

• Teams organised around work processes
• Very flat span of control
• Very little formalisation
• Usually found within divisionalised structure
Network organisational structure
Product Call Centre
Development Company
Company (NZ)
(Australia)
Core
Company

Accounting Manufacturing
Company Company
(Australia) (Malaysia)
Distribution
Company
(Singapore)
Org environment and structure

Dynamic Stable

• Steady conditions,
• High rate of change
predictable change
• Use organic structure
• Use mechanistic structure

Complex Simple

• Many elements (such as • Few environmental

stakeholders) elements
• Decentralise • Less need to decentralise
 Org environment and structure (cont)

Diverse Integrated

• Variety of products,
• Single product, client,
clients, locations
location
• Divisional form aligned
• Don’t need divisional form
with the diversity

Hostile Munificent

• Competition and resource • Plenty of resources and

scarcity product demand
• Use organic structure for • Less need for organic
responsiveness structure
 Overview of the next chapter
• Elements of organisational culture
• Importance of organisational subcultures
• Types of corporate culture artefacts
• Functions of organisational culture
• Organisational culture on business ethics
• Four strategies for merging organisational cultures
• How to strengthen an organisation’s culture
Organisational
structure and
design