Organization Behavior and
Organization Structure
Organization Behavior
A field of study that investigates the impact that individuals,
groups, and structure have on behavior within organizations,
for the purpose of applying such knowledge toward
improving an organization effectiveness
Stephen P. Robbins & Timothy A. Judge
Organization Structure
The way in which job tasks are formally divided, grouped, and
coordinated
Stephen P. Robbins & Timothy A. Judge
6 elements of Organization’s Structure
Stephen P. Robbins & Timothy A. Judge
1. Work Specialization
Describes the degree to which tasks in an organization are
divided into separate jobs. The main idea of this
organizational design is that an entire job is not done by one
individual. It is broken down into steps, and a different
person completes each step. Individual employees specialize
in doing part of an activity rather than the entire activity.
2. Departmentalization
The basis by which jobs in an organization are grouped
together. For instance every organization has its own specific
way of classifying and grouping work activities.
2. Departmentalization
5 common forms of departmentalization:
1. Functional departmentalization
2. Product departmentalization
3. Geographical departmentalization
4. Process departmentalization
5. Customer departmentalization
Functional Departmentalization
Plant Manager
Manager
engineering
Manager
Accounting
Positive
Manager
manufacturing
Manager HR
Negative
• Efficiencies from putting together similar
specialties and people with common skills,
knowledge and orientations
• Poor communication across functional
areas
• coordination within functional area
• Limited view of organizational goals
• In- depth specialization
Product Departmentalization
Procter &
Gamble
Tide
Pampers
Positive
Charmin
Pringles
Negative
• Allows specialization in particular products • Duplication of function
and services
• Managers can become experts in their
industry
• Closer to customers
• Limited view of organizational goals
Geographical Departmentalization
Vice President
for Sales
Sales Director
Western Region
Sales Director
Southern Region
Positive
Sales Director
Midwestern
Region
Sales Director
Eastern Region
Negative
• More effective and efficient handling of
specific regional issues that arise
• Duplication of function
• Serve needs of unique geographic markets
better
• Can feel isolated from other organizatonal
areas
Process Departmentalization
State motor
vehicle office
Motor vehicles
division
Positive
• More efficient flow of work activities
Licensing
department
Treasury
department
Negative
• can only be used with certain types of
products
Customer Departmentalization
Director of sales
Manager
consumers
account
Manager large
corporation
account
Positive
• Customers need and problems can be met
by specialists
Manager software
developers
account
Manager small
business account
Negative
• Duplication of functions
• Limited view of organizational goals
3. Chain of Command
Unbroken line of authority that extends from the top of the
organization to the lowest echelon and clarifies who reports
to whom
2 important concept:
1. Authority: Refers to the rights inherent in a managerial
position to tell people what to do and to expect them to do
it
2. Unity of Command: The management principle that each
person should report to only one manager
4. Span of Control
The number of subordinates a manager can efficiently and
effectively direct
5. Centralization and Decentralization
 Centralization: the degree to which decision making is
concentrated at a single point in an organization
 Decentralization: decision making is pushed down to the
managers closest to the action
6. Formalization
The degree to which jobs within an organization are
standardized
Organizational Design
Robbins
Simple Structure
 Low degree of departmentalization,
Wide span of control, High authority,
and Low formalization.
 The company usually small and “young”
 Used by big company in crisis, for
example IBM in 1993
Simple Structure
Simple Structure
Positive
The structure is simple
Flexible, fast and
Low cost in
implementation
Negative
Limitless decision
making
Insufficient if the
company expands
High risk in
implementation
Bureaucracy Structure
 Specialization on routine operational task
 Formalized regulation, centralized
authority, narrow span of control and
decision making follow the chain of
command
 Applied on big and mature organization
with active routine and high standarization,
for example U.S Department of Education
Bureaucracy Structure
Bureaucracy Structure
Positive
Carry out standarized task
efficiently
Doesn’t require many
employee training
Negative
Can create conflict between
sub-unit
Overly concern on rule,
hence there is no initiative
from the employees
Increasse communication in Focus on sub-unit’s objective
the organization
Matrix Structure
 A combined structure of functional departmentalization and
product departmentalization
 Two chain of command, so each employee has two superior
 Used by company that require fast response in changing
environment, fast information processing, and dealing with
financial and human resource constrain, for example :
Bussiness Administration school
Matrix Structure
Matrix Structure
Positive
Negative
Simplifying the activity
Confusion in handing the
coordination in the company report to either superior
Easy to communicate
between employees
Employee with specific skill
are spread in the
organization
Competition between
managers
Team Structure
 Using teams as main force in
coordinating each job activities
 Desentralized decision making until
team level
 Require the employee to work in
specialization and generalization
 For Example; Food Market Inc.
Virtual Organization
 Implenting Outsourcing for main
functions and sentralization of the
organization
 Focusing on organization specialization
 For Example: Apex Digital
Virtual Organization
Virtual Organization
Positive
Flexible in the
implementation
Negative
Lack of control in the
organization’s sub-units
Boundaryless Organization
 Chain of command is erased, has unlimited span of control,




and changing department with empowered team
There are cross-hierarchy team, participative decision
making, and 360 degree work valuation
Employees are driven to generalisazing rather than
specialisazing
Organization remove the boundaries with external party
For Example : Oticon A/S
MCS & Organizational Structure
 An effective execution of MCS is possible only when there is
an efficient HR management, excellent work culture as well
as an efficient organization culture -Subhash Chandra Das Organization structure is a principal component in MCS’s
structure. Organizational structure is a tool to distribute
authority needed in using organization’s resource to achieve
organization’s objective. –Mulyadi-
Why do Structure Differ?
 Mechanistic
Model : A structure characterized by extensive
departmentalization, high formalization, a limited information network,
and centralization
 Organic Model: A structure that is flat, uses cross- hierarchical and
cross-functional teams, has low formalization, possesses a
comprehensive information network, and relies on participate decision
making
 Major causes or determinants of an organization’s structure:
 Strategy
 Innovation
 Cost Minimization
 Imitation
 Organization size
 Technology
 Environment