Organizing: The process of assigning tasks, allocating resources, creating operational systems, and arranging activities to implement plans.

Nature of structures


  • Official structure of organization
  • Positions, job titles & lines of authority


  • Lies behind structure
  • Unofficial
  • Interpersonal networks of support

Types of structures

Functional structure

  • People with similar skills or performing similar tasks are grouped together
  • Works well for small organizations


  • Efficient resource use
  • Tasks can be assigned more accurately to the areas of skill
  • Clear career paths
  • Good technical problem solving


  • Poor communication between function groups
  • Slow response to change
  • Decisions concentrated at the top - delay
  • Limited general management training for employees

Devisional structure

  • Group people with various skills together who are working on the same product or process
  • Common in complex organizations
  • Avoids problems of functional structures


  • Fast response, good in uncertain environments
  • Expertise focused on a specific customers, products or regions
  • Improved cross-functional coordination
  • Develops management skills


  • Duplication of resources across divisions
  • Less technical depth & specialization
  • Less management control
  • Competition between divisions for resources
  • Emphasis on division goals can be detrimental to organization as a whole

Matrix structure

Each team member reports to both their functional and divisional supervisor. This gives the advantage of both divisional and functional structures.


  • Better interfunctional cooperation
  • Flexible
  • Better customer service
  • More accountability
  • Improved decision making
  • Develops both generalists and specialists


  • Dual chain of command can make things confusing
  • Power struggle between managers
  • More meetings and discussion required
  • Increased cost of having twice as many managers

Team structures

Specialist teams designed to solve problems or complete special projects, may be temporary or permanent.


  • Reduced barriers among departments
  • Quick decisions
  • Improved morale


  • Conflicting loyalties
  • Many meetings required

Network structures

A central core that operates by interacting with contractors and outside suppliers, at “arms length”.


  • Fewer full time employees and less complex internal systems
  • Reduced operating costs


  • Control and coordination problems
  • Loss of control
  • Little culture

Boundaryless organisations

Eliminates internal boundaries amongst groups and external boundaries with the environment. Combination of team and network structures.

Good organisational design

  • Fits well with the goals of the company
  • Supports the implementation of strategies
  • Supports technologies and allows them to be used to their full extent
  • Handles change
  • Supports and empowers workers to make the most of their potential

Trends in organisational design

  • Shorter chains of command
  • Less unity
  • Wider spans of control
  • More delegation
  • Decentralization
  • Reduced usage of staff
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