Organizational Structure and Design Report 2022

Running head: ORGANIZATIONAL STRUCTURE AND DESIGN
ORGANIZATIONAL STRUCTURE AND DESIGN
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1ORGANIZATIONAL STRUCTURE AND DESIGN
Executive summary
Having structures and designs in an organization have always been beneficial. This has
resulted in having a governance on the employees of the organization. When an organization
is well structured and designed it helps the organization to be focused and efficient as well.
Organizational structure helps in including the rules, regulation and responsibilities of the
organization. This report insights about a deep knowledge on the organization design and
structure and the types of organizational structures present and also discusses about the
importance of design and its key elements.
Keyword: organization, structures, designs, types.

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Table of Contents
Introduction................................................................................................................................3
Organizational structure.............................................................................................................3
Types of organizational structure...........................................................................................3
Functional structure:...............................................................................................................4
Divisional structure................................................................................................................4
Matrix structure......................................................................................................................4
Flat structure...........................................................................................................................4
Vertical structure....................................................................................................................4
Organizational design.................................................................................................................5
Elements of organizational design.........................................................................................5
Departmentalization:..............................................................................................................5
Chain of command:................................................................................................................6
Span of control:......................................................................................................................6
Centralization and decentralization:.......................................................................................6
Decentralization:....................................................................................................................6
Specialization of work:..........................................................................................................6
Degree of formalization:........................................................................................................6
Conclusion..................................................................................................................................6
References..................................................................................................................................8

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4ORGANIZATIONAL STRUCTURE AND DESIGN
Introduction
It is very important that the organization is structured and well designed. A system
that outlines or gives an idea of how the activities are directed in such a way that the goals
and objectives of the organization are achieved and accomplished is called an organizational
design or organizational structure (Miles et al., 1978). When an organization is well
structured and designed it helps the organization to be focused and efficient as well.
Organizational structure helps in including the rules, regulation and responsibilities of the
organization.
This report discuses about the importance of structure in an organization, types of
organizational structure, companies following the organizational structure and the advantages
of implementing these in an organization.
Organizational structure
Any organization be it small or big uses a kind of structure in the organization. It
helps an organization to define the job of each employee in the organization and it also keep
an observation over what is done by each and every employee of the organization (Tolbert &
Hall, 2015). The structure made for the organization helps in providing a company with a
visual representation of the company that will help the organization in putting its best foot
forward and accordingly achieve the goals of the organization.
Types of organizational structure
It is observed that there are mainly five types of organizational structure namely
functional, divisional, flat, vertical and the combination of the two called the matrix
organizational structure (Ashkenas et al., 2015).

5ORGANIZATIONAL STRUCTURE AND DESIGN
Functional structure:
Here the grouping of people are done according to the need and purpose of the
organization. This kind of organizational structure have an upper on the small businesses.
The main drawback of this organizational structure is the communication and coordination
between the departments of the organization is restricted and thus works separately (Pinho,
Rodrigues & Dibb, 2014).
Divisional structure
This kind of the structure is used by the company which has got a wide geographical
area and varieties of products to produce. For example, the Tecumseh products follow this
kind of organizational structure. This structure is costly because of the scope and size it has.
Matrix structure
This structure is the hybrid of the two structures mentioned above and is used in the
companies that are multi-national. For example, this organizational structure is followed by
Starbucks. This enjoys the benefits of the two structures as a whole.
Flat structure
In this kid of structure there are very few or no levels of management in the
organization and this occurs between the management and employees of the organization.
Decision making is easy and occurs at the staff level. Besides, there is no such significant role
played by the managers as the authority has very less supervision.
Vertical structure
In this structure the decision flow in the organization is from top to bottom which a
command chain that is defined very well and the decision moves through the layers formed
which makes the people at the last left with the least autonomy (Pinho, Rodrigues & Dibb,
2014).

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Organizational design
Organization design is also an important aspect that all the organizations follow. It
can be described as the process of the alignment of the structure of an organization with the
objectives it has to achieve and thus it helps in improving the effectiveness and efficiency of
the organization (Galbraith, 2014). In simple words, it can be defined as a methodology that
is systematic and whose main function is to identify the aspects of the work flow that are
dysfunctional and accordingly realign them with the business goals in order to implement the
changes that takes place in an organization.
Elements of organizational design
There are basically six elements that are included in the design of the organization.
These are:
1. Departmentalization
2. Command chain
3. Span of control
4. Centralization or decentralization
5. Specialization of work and,
6. Formalization degree.
Departmentalization: in this element, it basically gives a knowledge of how the structure
of the organization is able to group the functions, teams and offices of the company or the
organization (Burton, Obel & Håkonsson, 2015). There are departments in every
organizations are these are sorted on the basis of the tasks given to employees in any
particular department to perform.

7ORGANIZATIONAL STRUCTURE AND DESIGN
Chain of command: this element help the employees to report to a single manager rather
to go and ping anyone and everyone in the office. It helps in eliminating the inefficiencies an
organization has (Burton, Obel & Håkonsson, 2015).
Span of control: this element helps in defining the control of the responsibility of each
manager over the employees in the organization (Burton, Obel & Håkonsson, 2015).
Centralization and decentralization: centralization can be defined as the process where
the activities are involved in the planning and the decision making of the organization and on
the basis of this the organization is concentrated to a leader that is specific (Burton, Obel &
Håkonsson, 2015).
Decentralization: it is the process of making things simple and transferring the authority.
In this, most of the decisions are made by the managers that are on the middle level or the
lower levels (Burton, Obel & Håkonsson, 2015).
Specialization of work: in this element it is kept in mind there are specific duties that are
performed by employees must be based on the type of work the employee does and should be
based on the skills of the employee.
Degree of formalization: this elements helps in outlining the relationships that are inter-
organizational and this helps in determining the guidelines, rules and procedures of the
organization.
Conclusion
From the above discussion it can be concluded that, organizational structure can only
be considered as a good one if it is able to facilitate the achievement of the objectives of all
the employees in an organization ad helps in maintaining a proper coordination with
everyone present in the organization. Having an organizational structure also helps in

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providing a guidance to the employees present in the organization and also helps in governing
the workflow of the employees in the organization.

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References
Ashkenas, R., Ulrich, D., Jick, T., & Kerr, S. (2015). The boundaryless organization:
Breaking the chains of organizational structure. John Wiley & Sons.
Burton, R. M., Obel, B., & Håkonsson, D. D. (2015). Organizational design: A step-by-step
approach. Cambridge University Press.
Galbraith, J. R. (2014). Organizational design challenges resulting from big data. Journal of
Organization Design, 3(1), 2-13.
Miles, R. E., Snow, C. C., Meyer, A. D., & Coleman Jr, H. J. (1978). Organizational strategy,
structure, and process. Academy of management review, 3(3), 546-562.
Pinho, J. C., Rodrigues, A. P., & Dibb, S. (2014). The role of corporate culture, market
orientation and organisational commitment in organisational performance. Journal of
Management Development.
Tolbert, P. S., & Hall, R. H. (2015). Organizations: Structures, processes and outcomes.
Routledge.