Organizational Structure and Design – BBA/MBA Notes

Organizational Structure and Design

Meaning, Definitions and Types

Meaning of Organizational Structure

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 organization. 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 organization.
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.

Organization design is a plan or blueprint that leads to a specific organization structure. Thus, design is a basic theme or idea to be observed or incorporated while creating or modifying organization structure. More precisely, organization design is a basic guideline, theme, or theory that shapes the final structure of the organization. The organization design specifies
(1) how work of the organization is divided and assigned among various positions,
(2) how authority is delegated and how much decentralization to he practiced,
(3) what degree of formalization 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 organization are integrated and coordinated in pursuit of goals.

Organization design leads to a specific organization structure (i.e., a specific arrangement of all key components in the organization). The organization structure is also called a framework, a mechanism or a set-up. The structure reflects a specific organization design. Due to close relationship between organization structure and organization 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 organization 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.

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