2.

2 Organizational
structure
Miss Lili Adame
 TABLE OF CONTENTS

Terminology for understanding

01
organizational structures

Types of organization charts 02

Appropriateness of organizational
03
structures and external factors
Changes in organizational
04
structures
1.- Terminology for
understanding
organizational
structures
Let's have a rally
We will work in 9 teams.
Outside you will find stations with
qr codes, which you will have to
read, for each reading make a
brainstorm that summarizes and
explains each topic.
 Organizational structures

Span of Levels of Chain of

Delegation control command
hierarchy
Bureaucracy Centralization Decentralization De-layering

Matrix structure
 DELEGATION

Occurs when a line manager entrusts and empowers a

subordinate with authority to successfully complete a
particular task, project or role.
It involves passing on control and authority but holding
subordinates accountable for their actions.
Although authority and decision making are passed on, the
responsibility for the outcome remains with the line
manager because they are ultimately in charge.
 SPAN OF CONTROL
The span of control refers to how many workers are directly
accountable to (or under the authority of) a particular line
manager, i.e. the number of workers who report directly to a
particular manager.

Managers have a narrow span of control in organizations

that prefer to have a tighter (closer) control on
decision-making

wide span of control means a line manager has

responsibility for many subordinates. A narrow span of
control can present challenges for managers in terms of
communication and control unless they are able to delegate
effectively to members of their team
 LEVELS OF HIERARCHY
The term levels of hierarchy refers to the number of layers of formal
authority. It is represented in an organizational chart. Each horizontal
level in the hierarchy shows the level of seniority in the organization.

In the example below, there are five levels in the organizational hierarchy.
 THE CHAIN OF COMMAND
The chain of command refers to the formal lines of authority in an
organization. It can be seen via an organizational chart, which shows the
formal path through which commands and decisions are communicated
from senior managers to subordinates and operatives lower down in the
organizational hierarchy.
 BUREAUCRACY
Bureaucracy refers to administrative systems within an organization. This
includes the formal policies and procedures of the business. A
bureaucratic organization is one that has a lot of formal rules, regulations
and procedures.

There is a lack of flexibility as the organization is set in the way it does

things.
 CENTRALIZATION
Centralization refers to the situation in organizations where
decision-making is predominantly made by a small group of
senior managers at the top of the organizational hierarchy.
For example, in a tall organizational structure, with many
levels in the organizational hierarchy, decision-making tends
to be centralized.
 DECENTRALIZATION
Decentralization refers to the situation in organizations where
decision-making authority is delegated throughout, rather from a
central authoritative group. It is, essentially, the opposite of
centralization. In a decentralized organization, decision-making
authority is delegated to middle and junior level managers, although
(as with all organizations) strategic decision-making is maded by the
group of senior managers.
 DELAYERING
Delayering occurs when an organization removes one or
more layers in its hierarchical structure, i.e. it reduces the
number of layers of management to make the organization
flatter.
 MATRIX STRUCTURE
A matrix structure is a flexible organizational structure based
on the specific needs of a particular task, assignment or
business venture to meet the changing needs of the
organization.

Matrix organization involves getting teams of employees

drawn from different functional areas (departments or
divisions) of the organization working together for short-term
or temporary projects, such as construction projects or
innovative organizations working on a new project or product.
2.- Types of
organization charts
Flat (or horizontal) organization charts
A flat organization (also known as a horizontal structure)
has only a few layers of management.

Hence, there is a wide span of control, i.e. line managers

have a lot of decision-making authority.

Such an organization also has a short chain of command,

which can improve communication in the firm. A flat
structure is typically found in start-up firms, small
businesses and in organizations that value creativity and
flexible working practices.
Tall (or vertical) organization charts
A tall organization (also known as a vertical structure) has
many layers in its organizational hierarchy.

At the top of the hierarchy is the chief executive officer (CEO)

or managing director (MD).

Senior managers at the top of the hierarchy have more

authority and responsibility than those below them.

At the bottom of the hierarchical organizational structure are

the low-ranked employees with minimal experience and
responsibilities. Examples of organizations with hierarchical
structures include the emergency services, central
government and the military.
 Organization by product
Organization by product means structuring a workforce according to the goods or services
sold. Each department focuses on a different product within the organization’s overall
product portfolio.

It is suitable for large organizations with a broad product portfolio. Large carmakers, such
as Ford and Volkswagen, use organization by product based on their various products, e.g.
commercial vans, family vehicles, SUVs (sport utility vehicle) and sports cars. Each product
group or team has its own internal organizational structure, specifically related to the
product line.
 Organization by function

Organization by function means structuring a workforce according business functions, i.e.

specialised roles or tasks.

Typically, this will involve staff working together but from different departments, such as
marketing, human resources, production (operations), and finance.

Each department has a manager or director who is in charge of the assigned functional area
of the business.

Departmental staff report to the respective manager or director, who has overall
responsibility for the functional area (a department or division of the overall business).
 Organization by region
It is suitable for large businesses with operations in different geographical locations, such as
global multinational companies. This form of organization enables businesses to focus better
on the specific needs and wants of their customers in markets in in different geographical
regions of the country or the world.

A real-world example is the International Baccalaureate Organization (IBO), which

operates on a regional basis, with its founding office in Geneva, Switzerland and three
regional offices: the Americas (IBA), Asia-Pacific (IBAP), and Africa, Europe and the Middle
East (IBAEM).
3.- Appropriateness of
organizational
structures and
external factors
Let’s Youtube
 Prior to COVID-19, 1 in 50’s Americans worked
1 full time from home. What is the rate now?

The concept of a modern working office

2 emerged during which revolution?

Did the rise of the Internet change the basic

3 function of the workplace office?

How much do companies spend on office

4 space for one employee a year, on average?

Which location has the most expensive prices

5 for office spaces?
 By how much could the COVID-19 pandemic
6 reduce the number of staff in London offices?

Which social media company has authorized a

7 permanent move to working from home for its
employees?

8 What is meant by "knowledge jobs"?

What percentage of people in Switzerland have

9 the ability to work from home?

What are some of the challenges and opportunities

10 of working from home for female workers?
4.- Changes in
organizational
structures
 Project-based organization

Is a flexible organizational Each project is run by a project

structure based on the specific manager.
needs of a particular project or Decision making is centralized
business venture. in project-based organization,
although the dedicated team
It is suitable for getting experts works on the designated
together for short-term or project to achieve a common
temporary projects, such as goal. The team members may
construction projects or teams come from any part of the
of suitably experienced overall organization.
employees to work on a new
business venture or product.
Once the project is completed, the team members disband and reassemble to begin
another project or revert back to their own departments or functional areas of the
organization.

Typically, several teams operate at the same time as the organization has numerous
projects happening at the same time.
 The Shamrock organization

Professor Charles Handy’s Shamrock organization

(1991) is another type of flexible organizational
structure. Handy argued that organizations must
adapt to changes in the business environment in
order to survive and thrive.
Let’s genially
● The professional core (or core workers)
● The contingent workforce (or peripheral
workers), and
● outsourced vendors (or outsourced workers).