Organizational Structure Defined By Managers Commerce Essay

Organizational Structure may be defined as how directors and supervisors divide, group, and organize work between different employees and sections.

Other important definition may be defined as:

“ An Organizational Structure is based on activities such as undertaking allotment, coordination, and supervising, which are directed towards the accomplishment and fulfilment of organisational ends and aims ”

An organisation can be structured in many different ways, depending on their aims, purposes and longterm ends. The construction of an organisation will find the manners in which it operates and performs. Many Organizations have a Hierarchy, but non all.

Organizational Structure has 6 chief elements:

1. WORK Specialization:

Work Specialization is the grade to which organisational undertakings are sub-divided into single occupations. It is besides known as “ Division of labour ” . It is the specialisation of labour in specific, limited undertakings and like functions. It is a critical component of Job Structure and attributes a major function in success, if it is truly utilised. Wor Specialization is more efficient and effectual for directors, in order to carry through organisational positions. Directors find it much easier to happen gifted forces and develop them to execute specific and certain undertakings. As Repetition improves the ability of an single to execute a certain undertaking with lesser clip consumed.

Basically, the occupations are assigned to specialise personal or persons. Therefore, the persons perform those undertakings or carry through those aims in which they are specialized or are trained to roll up. The kernel of Work Specialization is that an full occupation being done by an person, it is broken down into figure of stairss, with each measure being completed by a separate person. Therefore, single perform their expertness in specialised undertaking instead than the full occupation. It can be elaborated with the undermentioned illustration.


In Formula 1 Motorsports Racing, Rushing squads Managers hire mechanics that are specialized in certain undertakings ( during Pit Stops ) . Some are adept in replacing Front tyres, others are adept in replacing Rear tyres. Similarly, some are adept in Raising Car from the back side and others are specialized to execute the duty of a “ Lolly-Pop Man ” . Therefore, these squads hire mechanics and delegate them occupations that, they are specialized to execute.


Departmentalization is the 2nd component of Organizational Structure and follows Work Specialization. Departmentalization is the manner, work and duties are distributed in amongst different sections. Departmentalization refers to the procedure of grouping activities into sections. “ Division of labour ” creates specializers who need coordination. This coordination is facilitated by grouping specializers together in sections.

Departmentalization has the following chief types:


In Function Departmentalization, Departments are formed to group activities by “ map ” . Such as in a concern house, the construction might hold a Gross saless Department, a Marketing Department, a Purchase Department and a Human Resource Department etc. All these Departments are different from eachother on the footing of maps, they perform and the duties. Due to similar accomplishments and cognition, “ Economies of Scale ” can be achieved. The chief advantage of this type of Departmentalization is that, it can be used in all organisations, with mention to their ends and aims, and it is more efficient and effectual, as the people who posses the same expertness and accomplishments, are governed in a remarkable section.


Activities that are grouped by similar “ Product Lines or Product Categories ” . Undertakings are grouped harmonizing to merchandises and services, therefore go forthing all activities related to the merchandise or the service under a individual director or a remarkable caput. Each major merchandise country in the corporation is under the authorization of a senior director who is specializer in, and is responsible for, everything related to the merchandise line. This departmentalization helps an organisation to recognize its strong merchandise lines and weak links, additions Accountability. For E.g ; Unilever has different merchandise lines such as Dove, Axe and Fair & A ; Lovely etc.


Departments are formed on the footing of “ Geography and Territory ” ; such as North, South, East and West etc. If an organisation ‘s clients are geographically dispersed, it can group occupations based on geographics. For illustration, Coca Cola has developed a Organizational Structure administering districts, the North American sector and the International sector, which includes the Pacific Rim, the European Community, Northeast Europe, Africa and Latin America groups.



Grouping activities on the footing of “ Product or service or client flow ” . Each procedure require different accomplishments and techniques at different phases of its production or readying. Therefore, this Departmentalization helps the organisation to use the expertness of persons at different phases of production.

Therefore, sections are followed due to the difference in defined construction. For E.g ; A whole procedure is to be followed for obtaining a Passport, Verification, Documents Submission etc, all from different sections.


Grouping activities on the footing of “ common clients or types of clients ” Jobs may be grouped harmonizing to the type of client served by the organisation. The premise is that clients in each section have a common set of jobs and demands that can outdo be met by specializers. For e.g ; Law Firms provide services to General Public, high profile persons and Large Corporations.


Chain of Command is an unbroken line of Authority that extends from the top degree executive, direction to the lowest station, echeleon and clarifies who reports to whom. It is a Hierarchy which shows the Chain of Command and authorization, making a nexus between the Managers and Sub-ordinates. It has 2 chief elements:

Authority ( It may be defined as the right of the directors and top degree executives to give orders to sub-ordinates. To ease Co-ordination, each director has a certain function to play in hierarchy and has a certain authorization over his colleagues and sub-ordinates to carry through his responsibilty )

Integrity of Command ( It preserves the unbroken line in the hierarchy. It states that, for the interest of better co-ordination, an person or a group must merely hold a individual higher-up, to whom coverage is done. It helps to take struggles and work confusion )

For E.g ;

Ohio Fire Department is under the control of Ohio Government. Chain of Command goes right from the top degree Mayor, to the lower degree of directions such as Supervision Divison Chief and Staff Division Chief.


Span of Control is besides an of import component of Organizational Structure. It fundamentally manipulates the capableness of a director to command a certain figure of employees. This figure is determined after analysing the size of the organisation. There are two type of spans, 1. Wider Spans 2. Narrow Spans.

If a director decides to keep a narrow span, he can keep close control. However, there are few drawbacks every bit good. First, they are expensive due to extra degree of direction. Second, Communication procedure between the top and lower direction becomes more complex. Finally, Due to contract but tight supervising, Managers tend to do strong and tight policies, ordinances, which consequences in detering Employee Autonomy and Satisfaction.

In recent old ages, the accent has been laid on keeping a wider span of control. It is easier to keep control, easier to pass on with sub ordinates and more significantly, policies are in the favour of Employees liberty, due to all right supervising.


5. Centralization AND Decentralization:

Centralization is defined as “ the grade to which determination devising is concentrated at a individual point in the organisation ” .

An Organization, in which there is less input taken from the lower degree directors and employees, and the top degree direction rely and take cardinal determinations by themselves, non affecting the lower direction ‘s input. Hence, it is “ Centralization ” .

For e.g ; a Centralized Government is a signifier of Centralization, as it takes lesser input from lower governments and has the liberty to do determinations.

Decentralization possibly defined as “ the procedure of scattering decision-making administration closer to the people and citizens ” . In Decentralization, the lower degree forces provide more input and take part in the determination devising.

Decentralization and centralisation have played major functions in the history of many societies. An first-class illustration is the gradual political and organisational alterations that have occurred in European history. During the rise and autumn of the Roman Empire, Europe went through major centralisation and decentalisation. Although the leaders of the Roman Empire created a European substructure, the autumn of the Empire left Europe without a strong political system or military protection. Viking and other barbaric onslaughts further led rich Romans to construct up their big estates, in a manner that would protect their households and make a self-sufficing life topographic point. This system was greatly “ decentralized ” , as the Godheads of the manor had power to support and command the little agricultural environment that was their manor.

6. Formalization:

“ The grade to which occupations within the organisation are standardized ” Standardization is the certainty of the occupation. If a occupation is standardized, the employees know what to make and there is no kind of confusion. If a occupation is extremely standardized, there is minimal sum of discretion over what is to be done, when it is to be done and how it is to be done. It consequences in consistent and improved public presentation. The grade of formalisation depends on the organisation, its policies and its construction. For case, there a few occupations that are non formalized i.e Departmental Stores Clerk, Gas Station workers etc. On the other manus, companies like P & A ; G and Unilever normally have a standardised manner of making occupation. It is easy for employees to settle in, as they are able to understand their occupation decently.