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Human Relations
Organizational
Structure
Human Relations
Why be concerned with
organizational structure?
Organizing follows strategy. Strategy
defines what to do; organizing defines
how to do it.
Human Relations
Organizing
• Tasks are subdivided into individual jobs.
• Division of labor concept.
• Employees perform only the tasks relevant to
their specialized function.
• Jobs tend to be small, but they can be
performed efficiently.
Human Relations
Organization Structure
Defines:
 how tasks are divided, resources are deployed, and
departments are coordinated.
 the set of formal tasks.
 the formal reporting relationships.
 the design of systems to ensure effective
coordination of employees across departments.
Human Relations
Four Points About
the Organization
Chart
Visual representation
Set of formal tasks
Formal
reporting relationships
Framework
for vertical control
Human Relations
Chain of Command
 Unbroken line of authority that links all persons in an
organization.
 Shows who reports to whom.
 Associated with two underlying principles.
- Unity of Command – everyone reports to just one person.
- Line of Authority is clearly defined.
Human Relations
Authority
 Formal and legitimate right of a manager to make
decisions, issue orders, and to allocate resources to
achieve organizationally desired outcomes.
 Authority is distinguished by three
characteristics:
1. Authority is vested in organizational positions, not
people.
2. Authority is accepted by subordinates.
3. Authority flows down the vertical hierarchy.
Human Relations
Responsibility
 The duty to perform the task or activity an
employee has been assigned.
 Managers need authority commensurate with
responsibility.
Human Relations
Accountability
 Mechanism through which authority and
responsibility are brought into alignment.
 People are subject to reporting and justifying
task outcomes to those above them in the
chain of command.
 Can be built into the organization structure.
Human Relations
Delegation
1
The process managers use to transfer
authority and responsibility.
2
The organization encourages managers
to delegate authority to the
lowest possible level.
Human Relations
Span of Management
 The number of employees
reporting to a supervisor.
 Traditional view, seven or so per
manager.
 Many organizations today, 30 or
more per manager.
 Generally if supervisors must be
closely involved with employees,
span should be small.
Human Relations
Factors Associated with
Large Spans of Control
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Work is stable or routine.
Similar task is performed by everyone.
A single location.
Employees are highly trained.
Rules and procedures are available.
Support systems and personnel are
available for supervisor.
 Little time is required in nonsupervisory
activities.
 Personal preferences and styles of
management favor a large span.
Human Relations
Tall versus Flat Structure
 Span of control used in an organization determines
whether the structure is tall or flat.
 Tall structure has a narrow span and more
hierarchical levels.
 Flat structure has a wide span, is horizontally
dispersed and fewer hierarchical levels.
 The trend has been toward wider spans of control.
Human Relations
Tall vs. Flat Structure
Human Relations
Centralization and Decentralization
 The hierarchical level at which decisions are made.
Human Relations
Decentralization
 Facilities at different locations.
 Decision authority is pushed down the chain
of command to lower levels.
Human Relations
Decentralization Tends to-- Make greater use of human resources.
 Reduce burdens of top managers.
 Cause decisions to be made close to the action.
 Permit rapid response to changes.
Human Relations
Centralization versus
Decentralization
 Greater change and uncertainty in the environment
are usually associated with decentralization.
 The amount of centralization or decentralization
should fit the firm’s strategy.
 In times of crisis or risk of company failure,
authority may be centralized at the top.
Human Relations
Factors that Influence
Centralization/Decentralization
 Amount of change and uncertainty.
 Corporate culture.
 Size of organization.
 Cost and risk of failure.
 Efficiency of communication and control
systems.
Downward Communication
• Messages sent from top management down to
subordinates.
• Most familiar and obvious flow of formal
communication.
• Encompasses the following:
1. Implementation of goals and strategies.
2. Job instructions and rationale.
3. Procedures and practices.
4. Performance feedback.
5. Indoctrination.
Human Relations
Upward Communication
• Messages that flow from the lower to the higher
levels in the organizations.
• Five types of information communicated upward:
1. Problems and exceptions.
2. Suggestions for improvement.
3. Performance reports.
4. Grievances and disputes.
5. Financial and accounting information.
Human Relations
Horizontal Communication
• Lateral or diagonal exchange of messages among
peers or coworkers.
• Horizontal communications three categories:
1. Intradepartmental problem solving.
2. Interdepartmental coordination.
3. Change initiatives and improvements.
Human Relations
The Grapevine
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Will always exists in organizations.
Used to fill in information gaps.
Tends to be more active during periods of change.
About 80% of topics are business related.
About 70-90% of details of grapevine are accurate.
Approaches To Structural Design
Slide 1 of 2
Approaches To Structural Design
Slide 2 of 2
Human Relations
Matrix Approach
 Functional and divisional chains of command
simultaneously.
 Dual lines of authority.
 Functional hierarchy of authority runs vertically.
 Divisional hierarchy runs laterally.
 Violates the unity of command concept.
Human Relations
Network Approach
 Organization divides major functions into
separate companies brokered by a small
headquarters organization.
 "Where is the organization?"
 Especially appropriate for international
operations.
 Held together with phones, faxes, and other
electronic technology.
Human Relations
Organization Growth
As organizations grow and evolve two things happen:
 New positions and departments are added.
 Senior managers have to find a way to tie all
departments together.
Human Relations
Evolution of Organization Structures