Organizing and Organizational Structure
Organizing arranges resources, activities, and people into a structure that enables efficient goal achievement.
Key Concepts
Division of labour: breaking work into specialised tasks. Chain of command: authority flows top to bottom. Span of control: number of subordinates per manager. Authority: right to make decisions. Delegation: assigning authority and responsibility to subordinates.
Departmentation
Grouping activities: functional (marketing, finance, IT), divisional (product, geographic, customer), matrix (dual reporting — functional + project), and team-based. Each has advantages in coordination, accountability, and flexibility.
Centralization vs Decentralization
Centralization: decisions at top (consistency, control). Decentralization: decisions delegated lower (speed, local responsiveness). Most organizations balance both based on environment stability, size, and philosophy.
Organizational Design
Mechanistic: rigid hierarchy, narrow spans, formal rules (stable environments). Organic: flat hierarchy, wide spans, flexible roles (dynamic environments). IT companies often use organic structures for innovation.
Modern Structures
Network organization, virtual organization, boundaryless organization, agile organization (cross-functional teams, rapid iteration, customer-focused).
Summary
Organizing creates structures enabling goal achievement. Understanding departmentation, authority, centralization, and modern designs helps create effective organizations.