Introduction to Organizational Behavior

Chapter Summary

The framework of tasks, reporting and authority relationships within which an organization functions is referred to as the organization structure. There are six basic elements which form the basis of an organization structure: They include work specialization, departmentalization, chain of command, span of control, centralization/decentralization and formalization. The degree to which tasks are divided into sub-tasks and each sub-task is carried out by an individual employee is referred to as work specialization. The grouping of similar jobs to achieve better coordination among them is referred to as departmentalization.

The chain of command is an unbroken line of authority that establishes clear reporting relationships among various levels in the organization. The ratio of managers to their immediate subordinates in an organization is referred to as span of control. The degree to which decision making power is concentrated at the top most level of the organization is referred to as centralization. The degree to which rules and procedures govern the duties and responsibilities of employees in organizations is referred to as formalization.

The three most commonly used organization structures are simple structure, bureaucratic structure and matrix structure. In simple structures, there is a low degree of departmentalization and formalization, a wide span of control and centralized decision making. In bureaucratic structures, there is a high degree of work specialization, formalization, centralization and departmentalization. Such structures have a narrow span of control and support the principle of unity of command.

The matrix structure combines two organizational designs - functional design and project design - to gain the advantages of both. The principle of unity of command is violated in this structure as employees are required to report to two heads - the functional head and the project head. Matrix structures offer flexibility, facilitate better communication and coordination among the different departments, and enable the efficient allocation of resources.

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