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Essentials of Organisation Behaviour/Organisation Behaviour

Notes 6. Monitoring the effectiveness of the organization and making adjustments to maintain or
increase effectiveness.

Key Elements of Organization Structure

1. Work Specialization: It deals with division of labor. The whole job is not done by one
person but instead is broken down into steps and each step is completed by a different
persons. Some Key characteristics are:
(i) It increases employees skill and efficiency at performing a task,

(ii) Generates higher employee productivity
(iii) In some jobs employees are likely to get boredom, fatigue, stress, poor quality
work, increased absenteeism, higher turnover due to repetitive nature of work.

2. Departmentalization: It refers to the basis on which jobs are grouped in order to accomplish
organizational goals. Some key characteristics are:
(i) Grouping can be done by the homogeneity of tasks (Functional departmentalization),

(ii) Grouping jobs by product line (Product departmentalization)
(iii) Grouping jobs on the basis of territory or geography (Geographic departmentalization)
(iv) Grouping jobs on the basis of product or customer flow
(v) Facilitates utilization of common skills, knowledge and orientation together into
common units.
3. Chain of Command: This shows the flow of authority directed from the upper levels of the
organization to the lowest levels and delineates who reports to whom. This concept
incorporates three key elements:
(i) Authority (right to issue order and expecting the orders to be obeyed),

(ii) Responsibility (obligation to perform assigned duties)
(iii) Unity of command (reporting authority to whom they are responsible)
4. Span of Control: This deals with how many subordinates one can effectively manage
under his/her control. There are two types of span of control.
(i) Wider span of control which has fewer levels and each level managers are controlling
more people

(ii) Narrow span of control has more levels and in each level managers have limited
number of people to supervise.
(iii) The effectiveness of narrow or wider span of control depends upon task structure,
employee's maturity, environmental uncertainty, technology, work culture, etc.
5. Centralization and Decentralization: The decision making latitude given at the top or
lower level determines whether the organization is centralized or decentralized.
(i) If top management makes key decisions with no input from lower level employees,
then the organization is centralized.

(ii) If lower level employees are provided more input and given more discretion to
make decision, it is decentralized.
(iii) The effectiveness of centralization or decentralization depends upon so many factors
such as environment, technology, employees, size of the company, strategies, etc.

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