Organization structure and design

Organization structure

prepared by malak habibullah

Outlines

• Specialization

• Centralized vs decentralized organizations.

• Span of management

Specialization• Its also called division of labour• Degree to which activities in an organization is sub

divided into separate jobs.• Term division of labour was first introduced by ADAM

SMITH.

HENRY FORD

FORD

Advantages• Increase productivity

• Decrease production time

• Decrease training cost

• More leisure

Disadvantages• Loss of creativity

• Employee dissatisfication

• Increase turn over

Centralized vs Decentralized Organizations

Centralized Organization

• Type of organization in which major decisions are made by senior management team and there is no communications with the members of other departments.

Example

Decentralized organization• Decentralization means delegation of

– authority– responsibility and– accountibility.

In this type of organization significant level of authority is delegated to the lower level of organization

Advantages• Faster decision-making without resort to higher level

consultation.

• Excellent training experience for promotion to higher level management.

• Decisions better adapted to local conditions.

Span of Management• The numer of employee who directly report to a single manager.

• it is generally expressed as ratio of manager to employee.

• Span of control 1:4 means 4 subordinates are controlled by a single manager.

Narrow span of control

• Also called tall span of control.

• When a limited number of employee report to a single manager.

Advantages• Ease of communication with employee

• Easy to control the employee

• More effective feedback from employee

• Less management skills are required

Disadvantages• Increase cost

• More complicated

• Lower employee are out of touch with higher managemnent team

Wide span of control

• When a significant number of employee report to a single manager.

Advantages• Less stratification is there, so message convayed to

lower staff is faster.

• Less number of managers are required so cost of the organization is decreased.