Organizational Perspective Meaning, Organizational Structure and Fundamental Concepts

Organizational Perspective

           Meaning

·    An organizational perspective is the way that an organization defines the roles and the personnel that are needed and responsible for given processes within the body of the organization.

·    This would be job descriptions, skills, or educational requirements that are required to hold different positions.

·     This also includes the plans for growth and expansion and what will be needed to accomplish those goals.

           Organization

·   A consciously coordinated social unit, composed of two or more people, that functions on a relatively continuous basis to achieve a common goal or set of goals.

·    Groups of people who work interdependently toward some purpose.

·        A managed system designed and operated to achieve a specific set of objectives.

Organizational Structure

§  Defines how job tasks are formally divided, grouped, and coordinated.

§ The division of labour as well as the patterns of coordination, communication, workflow, and formal power that direct organizational activities.

§  Reflects its culture and power relationships (McShane & Glinow, 2000).

Fundamental requirements of organizational structures

§  The division of labour into distinct tasks.

§  The coordination of that labour so employees can accomplish common goals.

Fundamental Concepts

§  Differentiation

§  Integration

Differentiation 

§  Internal environment created by job specialization and the division of labour.

– the work of the organization is subdivided into smaller tasks.

– different people or groups often perform specific parts of the entire task.

 Integration

§  Differentiated units are put back together so that work is coordinated into an overall product.

§  Coordination would link the various parts of the organization to achieve the organization’s overall mission.

Elements of Organizational Structure

Vertical Structure

Ø Authority in organizations

Ø Hierarchical levels

Ø Span of control

Ø Delegation

Ø Decentralization

Horizontal structure (departmentalization)

§  Functional  

§  Divisional  

§  Matrix organizations

The vertical structure

§  Authority in organizations 

Ø The legitimate right to make decisions and to tell other people what to do.

Ø Authority resides in positions rather than in people

Ø Top to bottom

§  Span of control 

Ø Number of people reporting directly to the next level in the hierarchy

Ø Narrow spans build a tall organization

Ø Wide spans create a flat organization

§  Delegation

Ø Assignment of authority and responsibility to a subordinate at a lower level.

Ø Responsibility means the assignment of a task that an employee is supposed to carry out

Ø Accountability means the expectation that employees perform a job, take corrective action when necessary, and report upward on the status and quality of their performance.

§  Decentralization

Ø The delegation of responsibility and authority

Ø In a centralized organization, important decisions usually are made at the top.

Ø In decentralized organizations, more decisions are made at lower levels.

The horizontal structure

§   As the tasks of organizations become increasingly complex, the organization inevitably must be subdivided or departmentalized.

§  Departmentalization specifies how employees, and their activities are grouped together, such as by function, product, geographic location, or some combination.

§  Functional structure 

Ø Jobs and departments are specialized and grouped according to business functions and the skills they require production, marketing, human resources, research and development, finance, accounting and so forth.

Ø Organizations with functional structures are typically centralized to coordinate their activities effectively.

§  Divisional structure 

Ø  Type of departmentalization that groups employees around outputs, clients, or geographic areas.

Ø Divisional structures are sometimes called strategic business units because they are normally more autonomous than functional structures and may operate as subsidiaries rather than as departments of the enterprise.

§  Matrix Structure 

Ø Matrix structures usually optimize the use of resources and expertise, making them ideal for project-based organizations with fluctuating workloads.

Ø Matrix structures focus technical specialists on the goals of serving clients and creating marketable products.