Organizational
structure
UNIT 2.1
table of contents
01 02
Concepts of
organizational delegation
structure
03 04 05
Centralization vs
Span of control Chain of command
decentralization
CONCEPTS OF
01
CONCEPTS OF ORGANIZATIONAL STRUCTURE
The Vertical Dimension The HORIZONTAL Dimension
o DELEGATION o DEPARTMENTALIZATION
Departmentalization refers to the subdividing
o SPAN OF CONTROL of an organization into smaller subunits.
A variety of means can be utilized for this
purpose.
o CHAIN OF COMMAND The primary forms of departmentalization are
by function, process, product, market,
o CENTRALIZATION customer, geographic area, and even matrix
(also called project organization). In many
organizations, a combination of these forms is
o DECENTRALIZATION used.
02
Delegation is the assignment of new or
additional responsibilities to a
subordinate at a lower level.
Delegation is necessary because it is physically impossible for a single man to look after the affairs of a large
organization. The success of a manager lies in his ability to multiply himself through other people. The organizations
of today are not only large but also complex in character. No manager can claim to have all the skills and expertise to
perform all the diverse kinds of jobs. Again, large scale business activities are not confined to one place. It may have
several branches and units at several places. Delegation becomes a necessity for running these branches.
DELEGATION
Terms & definitions
When delegating work, the following things must also be given to the subordinates:
authority power
Authority is the sum of the powers The ability of individuals or groups
and rights entrusted to make to influence the beliefs or actions
possible the performance of work of other persons or groups and is
delegated more complicated than authority
responsibility accountability
Responsibility is the This is the obligation to report
obligation to carry out (give an account) to higher
certain duties. authority for the discharge
of those responsibilities.
Authority, responsibility & accountability
AUTHORITY RESPONSIBILITY
Responsibility and authority must
go hand in hand
Responsibility Accountability Usually subordinates are given
is assigned flows upwards responsibility for the duties assigned to
downwards in in an them by their manager and are
an organization organization accountable to him for their performance
STEPS IN EFFECTIVE DELEGATION
Defining Objectives
Define the goal succinctly
Select the person for the task Appraising Assigning
Perforemance Responsibilities
Solicit the subordinate’s views about
suggested approaches
Give the subordinate the authority, time The Key Links
and resources to successfully perform the
assignment
The manager would have more time for
Schedule checkpoints for reviewing more important managerial functions and
progress higher-level activities like planning,
setting objectives and monitoring
Follow through by discussing progress at performance.
appropriate intervals
Benefits VS Limitations
Delegation
benefits limitation
● The managers may resist to
● Delegation leads to delegate authority
professionalism. ● The managers may require
● Managerial decisions may training for taking decisions
involve creativeness and and the costs of training may
innovativeness. be higher
● The competitive environment ● Every person may not be able
may be created in the to take high level of decision in
organization.
● The managers may take quick the effective way.
decisions. ● The administrative costs may
also increase.
Do’s & Don’t in delegation
PROBLEMS
Delegate as simply and directly as possible.
1. 2. 3. 1. Give precise instructions and how each
delegation applies to organizational goals
Do not threaten Do not assume a Do not merely give 2. Mutually develop standards of performance. ·
Clarify expected results.
your staff condesceding answers
attitude
3. Anticipate the questions your employees may
have, and answer them in order.
4. 5.
4. Discuss recurring problems. · Seek employee
ideas about how to do the job.
Do not overeacte to Avoid accessive
problems checks on progress Accentuate the positive rather than the negative.
5. Be supportive. Exhibit trust. · Recognize
superior performance.
03
Span of
Span of control
Span of control refers to the number of subordinates who report
directly to an executive or supervisor.
Narrow span of control builds a tall organization that has many
reporting levels.
Wide span of control builds a flat organization with fewer reporting
levels.
The optimal span of control would maximize effectiveness because:
o It is narrow enough to allow managers to maintain good
control over subordinates.
o It is not too narrow such that it leads to over-control with an
excessive number of managers overseeing a small number of
subordinates.
04
Chain of
Chain of command
Chain of command, concerned with the flow of authority and
responsibility within an organization, is associated with two underlying
principles.
Unity of command means that a subordinate is accountable to only
one person — the person from whom they receive authority and
responsibility
Scalar principle is a clear definition of authority in the organization.
This authority flows down the chain of command from the top level to
the first or lowest level in the organization.
ADVANTAGES:
Clarification of relationships
Less confusion
Improved decision making.
centralization
05 VS
Centralization VS Decentralization
The issues of centralization and decentralization involve the principle of delegation of
authority.
Centralization and decentralization are opposites, and there are different degrees of
each. In a highly centralized organization, employees at lower levels have a limited
range of decision-making authority.
The scope of authority to make decisions in decentralized organizations, by way of
contrast, is very broad for lower level employees.
One cannot classify all forms of centralization as effective or ineffective. The same
applies to decentralization.
Each form has its advantages and disadvantages and is affected by a number of
factors. For example, the size and complexity of the enterprise can affect the
delegation of authority.
By centralization or decentralization it does not mean the division of organization into
departments or sections
DECENTRALIZED CENTRALIZED
CENTRALIZATION
A centralized organization is an organization in which high level executives make most
decisions and pass them down to lower levels for implementation.
ADVANTAGES DISADVANTAGES
۞ Closer control of operations ۞A bureaucratic leadership
style
۞ Uniformity of policies,
practices, and procedures
۞Limited communication
۞ Better use of centralized, ۞Lack of flexibility
specialized experts
deCENTRALIZATION
A decentralized organization is an organization in which lower level managers make
important decisions and not wait for decisions from higher level managers.
ADVANTAGES DISADVANTAGES
۞ Faster decision-making ۞ There is a lack of uniformity
without resort to higher level
in the policies followed
consultation
۞ Excellent training experience ۞ There will be a problem of
coordination
for promotion to higher level
management ۞ It will require hiring of
trained and qualified
۞ Decisions better adapted to personnel
local conditions
Do you have any questions?
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