Standard Organizational Structure

The strength of an organization is related to organizational structure.

Organizational structure is defined as a system of task and reporting relationships, which includes functional structures between various tiers of management and operations. Without an organizational structure it is difficult for tasks to be completed on time and for employees to communicate, and extremely difficult for executive management to meet strategic goals.

Organizational Design

Executive management has the responsibility to design, construct and manage an organizational structure. If an organization is to achieve goals, the design process must be based on features such as motivation, behavior, performance, job classification and intergroup and interdepartmental relationships. The design phase includes workgroup or workplace psychology to assess the needs of workers in relation to the organizational design.

Organizational Behavior

The behavior of employees is critical to an organizational structure. Structures are designed to foster desirable attitudes and values from employees who compliment the organizations' mission statement and goals. Assessing the behavior of employees and how they react to various work scenarios provides management the leverage to create human relation programs within the organization. Since behavior is closely related to work performance, many companies conduct psychological tests developed by industrial psychologists designed for the workplace. These tests determine if an individual can function in a particular role or work assignment.

The Concept of Differentiation

Various organizations are structured through the concept of differentiation. Differentiation is the process of grouping resources and classifying employees into divisions, sections or branches to ensure organizational productivity. Differentiation includes functional structuring, grouping employees according to similar positions in the organization, performing similar occupational tasks while displaying the same kind of skills.

Divisional Structure

Divisional structure consists of three sub-components (market, product and geographical components) within an organizational structure. Market structure groups functions into divisions that are responsive to the needs of clients and consumers with a focus on customer service, while providing resources to ensure quality management. Product divisional structure is necessary for specific goods and services that are manufactured and distributed according to the structure of labor and production within an organization. If an organization has a manufacturing function, the organization may reflect various products and divisions assigned to those products on the organizational chart. The division of labor within this concept can increase productivity of the products that are manufactured. A geographical structure categorizes groups and organizational functions into regional outlets, branches and divisions over a geographical region or area to serve customers. An example of geographical structures designed for customer service are wireless telephone companies, such as Verizon and AT&T, that have various branches in different regions for quick response to customer inquiries.

Decentralizing Authority within an Organization

The benefit of decentralization reduces problems with communication and the decision-making process between employees and management. Responsibility is distributed to managers at all levels within the organization to make significant decisions regarding their work environment, subordinates and relations with other departments. Decentralization is effective in large organizations with various divisions, branches, and departments.

References

• Organizational Structure Types and Design Strategy: Organizationalstructure.net Article
• Organizational Theory - Determinants of Structure: Analytictech.com Article

Resources

• Organizational Structure and Theory