MAN 103 CHAPTER 6
ORGANIZATIONAL STRUCTURE AND COMMUNICATION
Organization structure determines who works together, and organizational communication flows
through this structure, affecting behavior, human relations, and performance.
Organizational structure: It refers to the way managers design their firms to achieve the
organization’s mission and goals.
In designing the organization’s structure, there are important questions to answer
Principles of Organization
1-Division of labor and Departmentalization: Division of labor or work specialization refers to the
degree to which the tasks are subdivided into separate jobs.
-Although specialization can lead to efficiency and increased performance, if jobs become too
specialized and boring, performance can decrease.
-Departmentalization is the grouping of related activities into units.
2-Chain of command: It is the line of authority from the top to the bottom of the organization which
is shown in organizational chart.
-The chain of command tells you who your boss is and who go for help.
3-Span of management: It refers to the number of employees reporting to a manager.
-How many employees should report to one manager is an important consideration in structure
because it affects the number of levels of managers.
-With downsizing, the trend has clearly been to increase the span of management. Layers of
management have been cut from some companies creating flatter organizational structures.
4-Centralized and decentralized authority: With centralized authority, top managers make important
decisions.
-With decentralized authority, middle and first line managers make important decisions where the
action is.
-Decentralization allows more input into decision making and greater employee commitment to
carrying out the decisions.
5-Coordination: With the division of labor and departmentalization comes the need to coordinate the
work of all departments.
-Coordination is more difficult with wider spans of management and decentralization.
Departmentalization
There are 6 common types of departmentalization
1-Functional departmentalization: It involves organizing departments around essential input
activities such as production and operations, finance and accounting, marketing and sales and human
resources.
-Most small businesses are functionally organized.
Human
Resources
Production
Marketing
2-Product(service) departmentalization: It involves organizing departments around the goods and
services provided.
Product 1
Product 2
Product 3
3-Customer departmentalization: It involves organizing departments around the needs of different
types of customers.
Retail
Business
Government
4-Divisional departmentalization (M-form): When a firm develops independent lines of business that
operate as separate companies, all contributing to the corporation profitability, the design is called
divisional departmentalization (or M form).
Frozen Food
Canned Soup
Bakery
5-Territory (Geographic) departmentalization: It involves organizing departments in each area in
which the enterprise does business.
Europe
Asia-Pacific
Middle East
and Africa
6-Matrix departmentalization: It combines the functional and product departmentalization
structures. The employee works for a functional department and is also assigned to one or more
products as part of a product team.
-The major advantage of the matrix is its flexibility. It allows the firms to temporary organize for a
project and projects can change fairly.
Owner
Human
Resources
Production
Marketing
X
X
X
Bakery
X
X
X
Frozen Food
X
X
X
Canned Soup
Contemporary Organization
1-Learning organization: As knowledge and continuous improvement is important, organizations are
transferring learning within and between firms. Here the concept is generally used as means of
coordinating the sharing of knowledge for innovation throughout the entire organization.
2-Team organizations and reengineering: Teams are regarded as a tool for coordinating organization
principles.
-For example cross-functional teams have members from different departments to coordinate tasks
between departments.
-Reengineering is the redesign of work to combine fragmented tasks into streamlined processes that
save time and money.
3-Virtual organization: It outsources major functions and focus on core competencies (the functions
an organization does well)
4-E-Organizations: An e-organization uses e-business (a full range of activities using the internet).
Organizational Communication
-OC is the compounded interpersonal communication process across an organization.
-An effective OC helps improve human relations as well as performance and is therefore critical to
meeting the goal of human relations.
A-Vertical Communication
1) Downward communicaton: When top-level managers make decisions, they are often
communicated down the chain of command.
-It is the process of higher-level management telling to those below them what to do.
2) Upward communication: When employees send a message to their manager, they are using
upward communication.
B-Horizontal Communication
HC is the flow of information between colleagues and peers. It is often called informal
communication because it does not follow the chain of command and is often not recognized as
official.
-It is also called as “lateral communication”
C-Grapewine communication
-The grapewine is the informal vehicle through which messages flow throughout the organization
(e.g. rumors)
Message Transmission Channels
-Channels are the forms of transmitted message.
1-Oral communication: The means used for OC are: Face-to-face, telephone, meetings and
presentations.
2-Written communication: Common channels include;
*Memos: They are commonly used and include titles as “date, to, from, and subject”
*Letters: They are also commonly used are more formal than memos.
*Reports: A report means that you are reporting on performance of some type
*Computers/e-mail
*Fax: Memos, letters and reports can be sent via fax
*Bulletin board notices: They are used for more informal often less business oriented communication
Nonverbal communication
-They are the facial expressions, vocal quality, gestures, and posture used while transmitting
messages.
-It is the secondary way of communication and is important because people pay attention on it.
Criticism
-Giving and getting criticism are important.
When criticizing others, following guidelines must be followed;
1) Give more praise then criticism
2) Criticize immediately
3) Keep criticism performance oriented
4) Give specific and accurate criticism
5) Open on a positive note and close by repeating what action is needed