Characteristics of Organizational Systems
Characteristics of an effective organizational structure
including clearly defined roles of authority, detailed job descriptions,
objective benchmarks and effective two-way communications between departments
and between management and staff.
1. Organizing by
Work Specialization
Work specialization, also referred to as the division of labour,
is the degree to which specific tasks within an organization are broken down
into individual jobs. When work specialization is extensive, a company may
assign a single task to an individual as part of a larger project.
Often, this type of environment creates repetitive,
narrow, smaller tasks. For example, assembly line factories may designate a
single task, such as running a machine or welding a part, for the completion of
an end product. On the other hand, companies may decide to enlarge jobs for the
purpose of challenging employees or giving them additional responsibilities.
2. Using Traditional
Departmentalization
Departmentalization describes the way in which an
organization groups different jobs or segments of its company together. For example,
a functional organizational structure groups jobs according to function, such
as marketing, sales, customer service and manufacturing.
An organization that uses a divisional approach groups
according to geography, such as a western and eastern region. Other forms of
departmentalization include product, customer or market departmentalization.
3. Hierarchy of
Authority
One of the most common forms of small-business management
models use a hierarchical organizational structure, which uses a top-down approach.
Hierarchy of authority–or chain of command–refers to an organization's line of
authority and describes who reports to whom. Related to hierarchy of authority
is the span of control, which refers to the number of subordinates over which
managers have authority.
Organizational structures can either be flat or tall. Flat
structures have fewer levels of authority and wide spans of control. For
example, a small startup company may position the CEO at the top, who has
authority over all other company employees. Tall organizational structures,
such as larger companies and corporations, have many levels of authority and
narrow spans of control.
4. Line and Staff
Relationships
Line and staff relationships extend throughout the
organizational structure and describe the way people are involved in the
organization. Line managers are responsible for achieving company objectives or
goals and include those in the direct line or chain of command.
Staff employees or managers give advice or make
recommendations to line managers and support the overall operations. In retail
corporations, for example, line employees may include department managers,
store managers, the vice president and president of operations, and the board
of directors.
In contrast, a scientific research organization may have
scientists and researchers as line managers and administrative employees as
staff employees.
5. Decentralization
and Centralization
Decentralized organizational structures spread
decision-making responsibilities to lower-level managers and some
non-managerial employees. In contrast, a centralized organization maintains
control and decision-making responsibilities near the top of the company.
For example, companies that have franchise operations may
centralize control at company headquarters. Whether a company is decentralized
or centralized, however, may depend on several factors, such as how many
hierarchical levels the organization has or the extent to which a company is
geographically dispersed.
6. Common
Elements of Organizations
From a manager’s point of view,
operations are made successful by instilling a common purpose to create a
coordinated effort across the organization and organizing resources based on
tasks and decision making. Each of the four elements is relatively straightforward
in theory but represents a critical component of an effective structure.
7. Common
Purpose
An organization without a clear purpose
or mission soon begins to drift and become disorganized. A common purpose
unifies employees or members and gives everyone an understanding of the
organization’s direction. Ensuring that the common purpose is effectively
communicated across organizations (particularly large organizations with many
moving parts) is a central task for managers. Managers communicate this purpose
by educating all employees on the general strategy, mission statement, values,
and short- and long-term objectives of the organization.
8. Coordinated
Effort
Coordinating effort involves working
together in a way that maximizes resources. The common purpose is achieved
through the coordinated effort of all individuals and groups within an
organization. The broader group’s diverse skill sets and personalities must be
leveraged in a way that adds value. The act of coordinating organizational
effort is perhaps the most important responsibility of managers because it
motivates and distributes human resources to capture value.
9. Division
of Labour
Division of labour is also known as work
specification for greater efficiency. It involves delegating specific parts of
a broader task to different people within the organization based upon their
particular abilities and skills. Using division of labour, an organization can
parcel out a complex work effort for specialists to perform. By systematically
dividing complex tasks into specialized jobs, an organization uses its human
resources more efficiently.
10. Hierarchy
of Authority
Hierarchy of authority is essentially
the chain of command—a control mechanism for making sure the right people do
the right things at the right time. While there are a wide variety of
organizational structures—some with more centralization of authority than
others—hierarchy in decision making is a critical factor for success. Knowing
who will make decisions under what circumstances enables organizations to be
agile, while ambiguity of authority can often slow the decision-making process.
Authority enables organizations to set directions and select strategies, which
can in turn enable a common purpose.
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