Organizing the vertical structure

Organizing is the deployment of organizational resources to achieve strategic goals.

Organizational structure defines how:

• Tasks are divided;
• Resources are deployed;
• Departments are coordinated.

A fundamental principle in organizations is that work can be performed more efficiently if employees are allowed to specialize.

Work specialization is the degree to which organizational tasks are subdivided into individual jobs also called division of labor;

With too much specialization employees are isolated and do only a single, tiny, boring job. Moving from assembly lines to manufacturing teams in order to provide greater challenge for increasing motivation.

Chain of command – an unbroken line of authority that links all individuals in the organization and specifies who refers to whom. Principles:

• Unity of command;
• The scalar principle – clearly defined line of authority that includes all employees.

Authority is the formal and legitimate right of a manager to make:

• decisions, issue orders and allocate resources to achieve organizational goals;
• vested in organizational positions, not people;
• accepted by subordinates;
• flows down the vertical hierarchy;

Responsibility is the duty to perform the task or activity an employee has been assigned.

Accountability is the mechanism through which authority and responsibility are brought into alignment. It means the people, authority and responsibility report and justify task outcomes to those above them in the chain of command.

Delegation in management is the process managers use to transfer authority and responsibility to positions below them in hierarchy. Nowadays encouraged.

Span of management (=span of control) – the number of employees who report to a supervisor. Traditionally about 7 people, now 30-40 and more.

The average span control used in an organization determines whether the structure is tall or flat. A tall structure has an overall narrow span and more hierarchical levels. A flat structure has a wide span, is horizontally dispersed, and has fewer hierarchical levels.

Centralization and decentralization pertain to the hierarchical level at which decisions are made. Centralization means that decision authority is located near the top of the organization.

Formalization is the written documentation that is used to direct and control employees. Includes rule books, policies, procedures, job, descriptions and regulations. Complement the organizational chart. Max Weber bureaucratic model defines the basic organizational characteristic that enable organize to work in a logical and rational manner. Today organizations are becoming less form in order to be flexible and responsive to a changing global environment.