4.1 Organizational Structure Pyramid/Tall/Hierarchical

Organizations can be distinguished on the basis of various criteria. These are as follows.
1. Organizational structure
2. Culture of the Organizations
3. Management Style
4. Decision Making Style
4.1 Organizational Structure Pyramid/Tall/Hierarchical
4.1.1 Hierarchical organization
A hierarchical organization is organization structured in a way such that every entity in the
organization, except one, is subordinate to a single other entity. This is the dominant mode of
organization among large organizations; most corporations and governments are hierarchical
Low number of subordinates per supervisor
Long chain of command
Greater number of levels
4.1.2 Organizational Structure Flat
Flat organization refers to an organizational structure with few or no levels of intervening
management between staff and managers. The idea is that well-trained workers will be more
productive when they are more directly involved in the decision making process, rather than
closely supervised by many layers of management.
This structure is generally possible only in smaller organizations or individual units within
larger organizations. When they reach a critical size, organizations can retain a streamlined
structure but cannot keep a completely flat manager-to-staff relationship without impacting
productivity. Certain financial responsibilities may also require a more traditional structure.
Some theorize that flat organizations become more traditionally hierarchical when they begin
to be geared towards productivity.
Following are the characteristics of a flat organization.
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1. High number of subordinates per supervisor
2. Short of chain of command
3. Less number of levels
4. Eliminates middle level managers
5. Decentralizes authority to low level managers
4.1.3 Culture of the Organization
Organizational culture is the specific collection of values and norms that are shared by people
and groups in an organization and that control the way they interact with each other and with
stakeholders outside the organization. Organizational values are beliefs and ideas about what
kinds of goals members of an organization should pursue and ideas about the appropriate
kinds or standards of behaviour organizational members should use to achieve these goals.
From organizational values develop organizational norms, guidelines or expectations that
prescribe appropriate kinds of behaviour by employees in particular situations and control the
behaviour of organizational members towards one another.
Culture is set of Fundamental Assumptions that exist and grow with the organization. It’s not
publicly announced but spoken about within the organization. It is a combination of implicit
values that keep the organization together. It is essential that the employees understand the
culture-What drives the organization.
4.2 Management Styles
1. Authoritative
2. Participative
3. Mixed
4.2.1 Authoritative
An Autocratic or authoritarian manager makes all the decisions, keeping the information and
Decision making among the senior management. Objectives and tasks are set and the
workforce is expected to do exactly as required.
The communication involved with this method is mainly downward, from the leader to the
sub-ordinate critics such as Elton Mayo have argued that this method can lead to a decrease
in motivation from the employee's point of view.
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The main advantage of this style is that the direction of the business will remain constant, and
the decisions will all be similar, this in turn can project an image of a confident, well
managed business. On the other hand, subordinates may become highly dependent upon the
leaders and supervision may be needed. Decisions are taken centrally by the senior
management themselves and are enforced at all levels.
4.2.2 Participative
In a Democratic style, the manager allows the employees to take part in decision-making:
therefore everything is agreed by the majority. The communication is extensive in both
directions (from subordinates to leaders and vice-versa).
This style can be particularly useful when complex decisions need to be made that require a
range of specialist skills: for example, when a new computerized system needs to be put in
place and the upper management of the business is computer-illiterate.
From the overall business's point of view, job satisfaction and quality of work will improve.
However, the decision-making process is severely slowed down, and the need of a consensus
may avoid taking the 'best' decision for the business.
4.2.3 Mixed
The approach is a combination of both authoritative and participative style. Input from
employees is taken and respected, final decision is taken by the senior management keeping
in view the views given by the employees.
4.3 Decision Making Approach
1. Structured: Procedures are predefined for solving routine repetitive problems
2. Non-structured: When problems require individual judgment, evaluation and insight
varying on case-to-case basis
4.4 Sources of information in Organizations
There can be sources of information both internal and external to the organization. Following
is a list of important sources.
Staff meetings
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Purchasing agreements
Formal reporting systems
Project proposals
Distribution Contracts
Research result
Employee Surveys
Persuasive interviews
4.5 Direction of Information Flow
4.5.1 Ideal Information Network in an Organization
Periodically updated / continuously updated – the information should be updated so
that whenever accessed, the user should be fully informed.
Efficient Processing – data should not be kept unprocessed for long. Timely
processing helps in effective decision making.
Value driven – the information kept in a computerised system should add value to the
user’s knowledge.
Audience Centred – every one should receive that part of information that is relevant
to the user.
4.5.2 Conclusion
Availability of timely and accurate information helps in proper decision making and
meeting the organizational goals.
Information should be tailored in accordance with the organization’s culture and
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