Organisational Structure and Design- BBA/MBA Note

Posted on Jun 3 2020 - 6:11pm by admin

Organisational Structure and Design

Meaning, Definitions and Types

In a simple term, structure is the pattern in which various parts or compounds are interrelated or interconnected. Thus, organization structure is the pattern of relationships among various components or parts of the organisation. This prescribes the relationships among various activities and positions. Since these positions are held by various persons, the structure is the relationships among people in the organisation.
The organization structure, being abstract, is not visible in the same way as biological or mechanical structure, though it can be inferred from the actual operations and behavior of the organization.

Design of basic structure involves such issues as how the work of the organization will be divided and assigned among various positions, groups, divisions, departments etc. and how the coordination necessary to accomplish total organizational objectives will be achieved.

Organisation design is a plan or blueprint that leads to a specific organisation structure. Thus, design is a basic theme or idea to be observed or incorporated while creating or modifying organization structure. More precisely, organisation design is a basic guideline, theme, or theory that shapes the final structure of the organisation. The organisation design specifies
(1) how work of the organisation is divided and assigned among various positions,
(2) how authority is delegated and how much decentralisation to he practiced,
(3) what degree of formalisation is to be observed,
(4) what level of tall v/s flat structure is to be adopted, and
(5) how efforts of people in the organisation are integrated and coordinated in pursuit of goals.

Organisation design leads to a specific organisation structure (i.e., a specific arrangement of all key components in the organisation). The organisation structure is also called a framework, a mechanism or a set-up. The structure reflects a specific organisation design. Due to close relationship between organisation structure and organisation design, mostly, both terms are taken as synonyms and are used interchangeably.


According to Dalton et al.
Organization structure refers to the differentiation and integration of activities and authority, role and relationship in the organization.

According to R.C. Davis
Organization structure is the sum total of objectives, functions, responsibility, power and obligation of members of the organization.

According to Jeffery A. Oxman
Organization structure is more than boxes on a chart; it is a pattern of interactions and coordination that links the technology, tasks, and human components of organization to ensure that the organisation accomplishes its purpose.

According to Katz and Kahn
Organization structure refers to the differentiation and integration of activities and authority roles, and relationships in the organization. Differentiation is differences in cognitive and emotional orientations among managers in different functional departments, and differences in formal structure among these departments. Integration refers to the quality of the state of collaboration that is required to achieve unity of efforts by the organization.

According to A.K. Wickesberg
The establishment of mutual relation of individuals with the nature, method, process, technology, technology and social environment.

According to W.H. Newman
Organization structure is related with the matters of overall organizational system of the concern.

Types of Organizational Structure
The organizational structure represents the hierarchical arrangement of various positions in the enterprise. It helps in allocating authority and responsibility formally. But there is not best structure of the organizational relationship which may be suitable, for enterprise has to evolve its own organization structure based on the nature of activities and business competence of personnel and the philosophy of management. There are following types of an organization:

1. Traditional Organisational Structure
(a) Line Organisation
(b) Line and Staff Organisation

2. Modern Organisational Structure
(c) Functional Organisation
(d) Divisional Organisation
(e) Project Organisation
(f) Matrix Organization
(g) Team based Organisation
(h) Free- form Organisation

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