Designing Organizational Structure

Abstract

Designing Organizational Structure is a process which involves designing and organizing. Organizing is a process where the structure of working relationships is established to achieve organizational goals in the most efficient and effective way. Designing is the construction of a particular organizational structure based on the established structure of working relationships. The constructed organizational structure determines how the employees use resources to achieve organizational goals.

Throughout this article, the main types of organizational structure will be examined to help clarify how managers can organize and control employees and other resources to create high-performing organizations and achieve organizational goals.

There is no such thing as the perfect way to design an organizational structure since researchers have shown that some organizations require a stable and mechanistic structure, while others find a flexible and organic structure to be most effective. According to contingency theory, managers design organizational structure based on the factors that affect the organization the most and which causes them the most uncertainty. When designing an organizational structure four factors are determinants of the type of organizational structure; the organizational environment, the type of strategy the organization wishes to pursue, the technology the organizations chooses to use and the characteristics of the organization’s human resources.

To help managers chose the most appropriate organizational structure, this article will examine the different types of organizational structure. Firstly, the grouping of tasks into jobs will be analyzed. Secondly, the grouping of jobs into functions and divisions will be analyzed, followed by the coordination of the functions and divisions. Finally, the last section includes the strategic alliances, B2B Network structures and IT, which are innovations in organizational architecture formed by the increasing globalization and use of new IT.

References

J. M. G. Gareth R. Jones, Essentials of Contemporary Management, Sixth edit. New York, NY 10121: McGraw-Hill Education, 2015, Chapter 7.