1. Outline the foundation concepts of organisational structure. 2. Specify the basic features of the bureaucratic form of organisational structure. 3. Describe contemporary organisational designs.

1. Organisational Structure and
DesignDesign
Dr Dorota Joanna BourneDr Dorota Joanna Bourne

2. Learning Objectives
1. Outline the foundation concepts of
organisational structure.
2. Specify the basic features of the2. Specify the basic features of the
bureaucratic form of organisational
structure.
3. Describe contemporary organisational
designs.

3. Organisations
Organisation
Is a collection of people working together to achieve a
common purpose (or simply a big group).
Organisational structureOrganisational structure
Is the arrangement of people and tasks to accomplish
organisational goals.
Organisational design
Is the process of creating a structure that best fits a
purpose, strategy, and environment.

4. Formalisation
Is the degree to which expectations regarding
the methods of work are specified, written
down, and enforced.
Produces an organisation with a highly specialised
labour and high delegation of authority.
Is associated with mechanistic (bureaucratic)
organisations.

5. Centralization
Is the extent to which executives delegate
authority to lower organisational units.
Less delegation = more centralization.
Strategic decisions are more likely to be
centralized than operational decisions.
The use of functional units is a feature of
centralization.

6. Complexity
Refers to the number of different job titles and
organisational units in an company.
Complexity increases the difficulty of managing an
organisation and typically increases with the size
of the organisation.

7. Differentiation
A horizontally differentiated organisation will
have many different job titles.
A vertically differentiated organisation will
have many different levels.

8. Forms of Bureaucratic
Organisations
Machine bureaucracy
Uses standardised work processes and is
efficient.efficient.
Best use is in large organisations.
Professional bureaucracy
Standardizes skills for coordination and is
composed of a core of highly trained
professionals.

9. The Bureaucratic Form of
Organisation

10. Bureaucratic Organisations
Contributions
Large-scale accomplishments
Accountability for results
Managers with precious skills and expertiseManagers with precious skills and expertise
Valuable organisational memory
Potential dysfunctions
Suppression of innovation and decision making
Lower productivity
Inconvenience and inefficiency
High worker frustration and low satisfaction

11. Departmentalization
The process of subdividing work into
specialised departments.
Advantageous in enhancing product growth or
service to customers.service to customers.
Line versus staff
Line groups are responsible for the
primary purposes of the firm whereas staff
groups are responsible for secondary
purposes.

12. Types of departmentalization
Functional: grouping people according to their
expertise.
Territorial: grouping subunits according to the
geographic areas that they serve.geographic areas that they serve.
Product or service: arranging units by the
product or service they provide.
Customer: based on customer needs.
Hybrid: combines the advantages of different
organisational types.

13. Functional Departmentalization within the
Davenport Machine Company

14. Product/Service Departmentalization
at GE Capital

15. Hybrid Organisation Structure

16. Matrix Organisation
A project structure superimposed on a functional
structure to take advantage of new opportunities
and solve special problems.
Projects are temporary groups of specialists workingProjects are temporary groups of specialists working
under one manager to accomplish a fixed objective
such as launching a new product.
Matrix structure creates a dual reporting challenge—the
involved employees may have to report to two bosses.
A key advantage is its ability to implement projects
quickly.

17. Matrix Organisation in
an Electronics
Company

18. Flat Organisation
Has relatively few levels
Is less bureaucratic because:
There are fewer managers available to review and
approve decisions.approve decisions.
The short chain-of-command creates less concern
about authority differences among people.
Are more efficient than tall organisations.
Downsizing to a flatter structure has strong
effects on surviving employees.

19. Leading-Edge Organisational Structures
The horizontal structure
Is the arrangement of work by teams that are
responsible accomplishing a process.
Is a structure in which employees take collectiveIs a structure in which employees take collective
responsibility for customers.
Reengineering
Is the radical redesign of work to achieve substantial
improvements in performance.
Searches for the most efficient way to perform a task.
Organises work horizontally rather than vertically.

20. A Horizontal Structure