DEBRE BIRHAN UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

Department of Management

Organizational Behavior (MGMT2083)

Group Assignment II

Section: B, Group One (1)

Group Members
S.No Name of student ID. Number
1 Tayto Mindahun DBU1502109
2 Alemnesh Mekibib DBU1502012
3 Biruk Bezawork DBU1502030
4 Haymanot Ashenafi DBU1502061
5 Tadelech Dereje DBU1502104
6 Ermiyas Yfru DBU1502152
7 Tnsae

Submitted to: Soliyana K. (MA)

Date of submission: November 29, 2024.
 1. Organizational Design and Structure

1.1. Organizational Structure and Design

Organizational structure is the skeleton that captures the relationships among employees' different
roles in the organization. In other words, organizational structure is the formal pattern of how
people and jobs are grouped in an organization. Moreover, organizational design is the process of
creating this structure, grouping roles and activities so that the interdependencies among
organizational actors are coordinated effectively and efficiently.

1.2. The Essence of Organizational Design and Structure

Organizational design and structure are foundational elements that shape how an organization
operates and achieves its goals. Organizational structure serves as the framework that defines the
relationships among various roles within an organization, ensuring clarity in responsibilities and
reporting lines. This structure is often visually represented through organizational charts, which
illustrate formal authority and the flow of information. Effective organizational design is essential
for aligning the structure with the organization’s strategy, facilitating efficient workflows, and
fostering collaboration among employees.

In recent years, the concept of organizational design has evolved significantly, driven by changes
in the business environment and the need for flexibility. Traditional hierarchical models are being
reassessed as organizations seek structures that allow for greater adaptability and responsiveness
to market dynamics. Managers face the challenge of creating designs that not only promote
efficiency but also empower employees to contribute effectively to their roles. This balance
between structure and flexibility is crucial for sustaining competitive advantage in a rapidly
changing landscape.

The process of designing an organizational structure involves several key elements, including work
specialization, departmentalization, chain of command, span of control, centralization versus
decentralization, and formalization. Each element plays a critical role in determining how tasks
are divided, coordinated, and managed within the organization. An effective design enhances

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operational efficiency, avoids bottlenecks, and ensures that resources are utilized optimally,
ultimately contributing to the organization's overall success.

1.3. Key Organization Design Process

The key organization design process consists of several critical steps that guide the establishment
of an effective organizational structure.

1.3.1. Determination of organizational goals and identification of related activities

➢ Organizational goals must be well defined and clearly spelt out. Based on the goals all
activities that are required should be identified and broken down into smallest possible sub
activities that may be assigned as a task or a job to the worker.

1.3.2. Grouping of activities

➢ All identical activities should be grouped keeping in mind formation of various

departments or divisions. Set of activities could further be sub-divided and assigned to a
particular section of a department so that it will indicates the workload, human resource
requirement, skills that may be necessary, the composition and layout of various facilities.

1.3.3. Delegation of authority

➢ A person cannot perform his duties unless he has been given adequate authority to
accomplish the assigned task. He cannot be made responsible and accountable if requisite
authority has not been given. Authority, responsibility and accountability are tied together.
An individual employee cannot be held responsible without authority. Production manager
cannot be held responsible for shortfall in production if he has not been authorized to hire
additional workers if required to meet the production targets.

1.4. Types of Organization Structure

There are several types of organizational structures, each designed to suit different operational
needs and organizational goals as explained below.

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1.4.1. Simple structure

➢ The simple structure is most common in young or small organizations and is typically
centralized. Coordination is largely a function of direct supervision, and the top manager
has a broad span of control. In fact, in a simple structure it is common for all employees to
report directly to the top manager, and typically employees have very little discretionary
decision-making power. Entrepreneurial firms also have simple structures because inside
such firms, everything revolves around the entrepreneur. Its goals are the entrepreneur's
goals; its strategy is the entrepreneur's vision.

1.4.2. Bureaucracy

➢ Bureaucratic organizations are designed to maintain accountability in their structures

through predictability. In a bureaucracy, tasks are carefully planned in advance, and both
the quantity and the quality of performance are closely monitored. Job specialization is
often found in bureaucracies as roles tend to be narrow in scope and responsibilities
extremely well defined.
➢ A detailed formal authority hierarchy exists to control and coordinate task performance.
Rewards are allocated on the basis of following instructions, and compensation and
selection are tied to ability to perform within narrow job functions. Bureaucracies may be
either machine based or professional, depending on whether the organization's
transformation technology is machines or people.

1.4.3. Organic structures

➢ Organic structures, on the other hand, provide a more flexible approach to organizing work.
These structures are designed to adapt quickly to changes and foster collaboration among
employees. Decision-making is decentralized, allowing for greater input from all levels of
the organization. Communication flows laterally, promoting information sharing and
teamwork. Organic structures are often associated with project-based work and are
increasingly popular in dynamic industries where innovation and responsiveness are
critical for success.

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1.5. Contemporary Forms of Organizational Structures

1.5.1. Matrix structure

➢ The matrix structure is particularly useful when an organization wants to focus on

developing a particular product or concentrate on a specific client. Unlike other
organizational structures, in which employees usually report to only one supervisor,
organizations with a matrix structure have dual reporting structures. Employees report to a
long-term manager who manages their professional and technical development, and they
report to a person who is responsible for the project(s) they are working on.

1.5.2. Boundary less organizations

➢ Boundary less organizations is another innovative solution to meet changing business

needs. A basic principle of boundaryless organizations is that hierarchies and traditional
structures put organizations at a disadvantage in reaching corporate goals. One of the first
steps many boundaryless organization take toward removing some of these barriers is to
change job titles (e.g., human resources to member relations, subordinates to work
partners). However, just because boundary less organization are less formal doesn't mean
that the work their members perform is easier than the work of people in formal
structures—it's just different.

1.5.3. Virtual structures

➢ Virtual structures were a logical outgrowth of developments in technology and global

expansion in corporate America, and are an outgrowth of the boundary less organization.
A virtual structure is an evolving network of organizations or firms joined to share skills,
costs, and resources. A challenge to traditional organizations, virtual structures is typically
assembled only temporarily and for specific reasons.

1.6. Technology and Job Design

Technology plays a significant role in shaping organizational structure and job design, influencing
how tasks are performed and how employees interact. Organizations must consider the demands

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of their clients and how quickly they need to adapt their products or services to meet changing
market needs. In environments where innovation is key, more adaptive structures such as organic
designs are better suited to respond to these demands. Conversely, in stable environments with
standardized outputs, traditional bureaucratic structures may be more effective.

The type of technology used by an organization also affects job design and the span of control. For
instance, more complex technologies often require closer supervision and a smaller span of control,
as tasks necessitate more oversight. In contrast, organizations that employ professional employees
with specialized knowledge may have a larger span of control, as these professionals typically
require less direct supervision. Understanding the relationship between technology and job design
is crucial for maximizing efficiency and effectiveness in the workplace.

Job design itself involves structuring tasks to enhance employee motivation and performance.
Well-designed jobs provide employees with autonomy, feedback, and the opportunity to utilize a
variety of skills, which can lead to higher job satisfaction. By considering factors such as skill
variety, task identity, and the presence of organizational support, managers can create jobs that
align with employee needs and organizational objectives. Finally, effective technology integration
and thoughtful job design are essential for fostering a productive and engaged workforce.

2. Power and Politics in an Organization

2.1. Definition of Power

Power in an organization is the capacity of an individual or group to influence others and control
resources, decisions, and outcomes. It can manifest in various forms, such as positional power
derived from one's role, personal power stemming from an individual's skills and charisma, or
relational power built through networks and alliances. Understanding power dynamics is crucial
for navigating organizational structures, as it shapes interactions, decision-making processes, and
ultimately, the effectiveness of leadership.

Power is not inherently negative; it can be used to motivate teams, drive innovation, and facilitate
change. However, the way power is wielded can significantly impact organizational culture and
employee morale. When power is exercised ethically, it fosters trust and collaboration. Conversely,

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misuse of power can lead to conflict, resentment, and disengagement among employees. Thus, the
nature of power in an organization is multifaceted, requiring careful management to ensure it aligns
with the organization's goals and values.

Furthermore, power is contextual, often dependent on the specific organizational environment and
the relationships between individuals. Different situations may call for different expressions of
power, and what works in one context may not be effective in another. Leaders must be adept at
recognizing these dynamics and adjusting their approach to power accordingly, balancing authority
with empathy and influence to create a productive work environment.

2.2. Contrasting Leadership and Power

While power and leadership are closely related, they are not synonymous. Leadership primarily
focuses on guiding and inspiring individuals or teams toward a common goal, while power
involves the ability to enforce compliance and direct behavior. Effective leaders often possess
power, but they use it to motivate and engage rather than to control or manipulate. Leadership is
about vision and influence, whereas power can exist independently of effective leadership;
someone may hold power without necessarily being an effective leader.

The distinction between leadership and power becomes evident in various organizational
scenarios. For instance, a manager may have positional power due to their title but may struggle
to inspire their team. In contrast, an informal leader; someone who lacks formal authority; can
wield significant influence through their relationships and communication skills. This highlights
that true leadership transcends mere power; it requires the ability to connect with others, foster
trust, and empower team members to contribute meaningfully.

Moreover, the interplay between leadership and power can shape organizational culture. Leaders
who rely solely on their power may create a toxic environment characterized by fear and
compliance, whereas those who prioritize leadership qualities; such as vision, integrity, and
emotional intelligence; tend to cultivate a positive, collaborative atmosphere. Ultimately, the most
effective leaders are those who understand the nuances of power and leverage it responsibly to
inspire and uplift their teams.

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2.3. Base and Sources of Power

The bases of power within an organization can be categorized into several types, including
legitimate, reward, coercive, expert, and referent power. Legitimate power is derived from a
person's position within the organizational hierarchy, granting them authority over others. Reward
power stems from the ability to provide positive incentives, such as promotions or bonuses, while
coercive power involves the capacity to impose sanctions or penalties. Expert power arises from
an individual's specialized knowledge or skills, and referent power is based on personal traits that
inspire admiration and respect.

Understanding these sources of power is vital for individuals seeking to navigate organizational
politics effectively. Each type of power can be leveraged in different situations, and recognizing
which base to employ can enhance one's influence. For example, a team leader may use expert
power to guide decision-making in a technical project, while a manager may rely on reward power
to motivate employees during a challenging period. The effective application of these power bases
can lead to improved collaboration and productivity.

In addition, the dynamics of power sources can change over time and in response to organizational
shifts. As employees develop new skills, relationships, and insights, their sources of power may
evolve. Organizations must foster an environment that encourages the growth of diverse power
bases, allowing employees to flourish and contribute to the organization's success. By promoting
a culture of empowerment, organizations can harness the collective strengths of their workforce,
leading to increased innovation and resilience.

2.4. Power in Group Coalitions

Power dynamics within groups often manifest through coalitions, which are alliances formed to
achieve common goals or exert influence. These coalitions can significantly impact decision-
making processes and resource allocation within an organization. When individuals band together,
they can amplify their power and voice, which can lead to more effective advocacy for their
interests. However, the formation of coalitions can also lead to power struggles, as competing
groups vie for control and influence.

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Coalitions can take various forms, from formal committees to informal networks. The
effectiveness of a coalition often hinges on the diversity of its members and the clarity of its
objectives. A well-structured coalition that includes a range of perspectives and expertise can drive
innovative solutions and foster collaboration across departments. Conversely, poorly defined
coalitions may become fragmented or face internal conflicts, undermining their effectiveness and
creating friction within the organization.

Moreover, the role of leadership in managing coalitions is critical. Leaders must be adept at
recognizing the formation of coalitions and understanding their implications for organizational
dynamics. By fostering open communication and collaboration among different groups, leaders
can harness the power of coalitions to drive positive change. However, they must also remain
vigilant against the potential for divisiveness, ensuring that coalitions work toward shared goals
rather than creating factions that could disrupt overall organizational harmony.

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