Strategy through Organizational Design

This resource presents the four types of organizational structures (simple, functional, multi-divisional, and matrix) and gives examples of companies that have used them. It then explores some of the newer ideas about organizational design and delves into the reasons to change for setting up control systems. Note the discussion on management fads.

The Basic Building Blocks of Organizational Structure

Division of labor is a process of splitting up a task into a series of smaller tasks, each of which is performed by a specialist. In ancient Greece, historian Xenophon wrote about the division of labor in shoe making: one person cut out the shoes, another sewed the uppers together, and a third person assembled the parts.

An organizational chart is a diagram that depicts a firm's structure.

Do you know what happens each year on the Wednesday of the last full week of April? It's Administrative Professionals' Day. Savvy workers mark this day with generosity. The reason involves informal linkages, which are unofficial relationships such as friendships that do not appear in organizational charts. Administrative professionals such as secretaries tend to be well informed about both policies and office politics. So keep them on your side!

Vertical linkages tie supervisors and subordinates together. These linkages show the lines of responsibility through which a supervisor delegates authority to subordinates, oversees their activities, evaluates their performance, and guides them toward improvement.

Horizontal linkages are formal relationships between equals in an organization. They often take the form of committees and task forces.

Employees may receive conflicting guidance about how to do their jobs if they work in a situation where multiple bosses are present. This problem can be avoided by following the unity of command principle, which states that each person should only report directly to one supervisor.

Table 1 The Building Blocks of Organizational Structure. Legendary football coach Vince Lombardi once noted, "The achievements of an organization are the results of the combined effort of each individual". Understanding how people can be most efficiently organized is the basis for modern management thought, and we illustrate the building blocks of organizational structure below.

Source: Granite State College, https://granite.pressbooks.pub/ld823/chapter/16/
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