Understanding Organizational Structures: Types and Components
Item No. 3
1. What is an Organizational Structure?
It is the system of positions established to define roles, based on the analysis and study of each profile.
2. Explain Mechanistic and Organic Structures and their Adaptation to the Environment
- Mechanistic Structure: Characterized by high complexity, significant formalism, general relations, and centralism. This hinders creativity and innovation.
- Organic Structure: Collaboration is both vertical and horizontal. Functions are adaptable, with little formalism, and decentralized decision-making.
- Conclusion: Organizational structure is common in private enterprises, while mechanistic structures are often found in government entities.
3. Components of an Organizational Structure
There are three main components:
- Complexity
- Formalization
- Centralization
1. Complexity: The greater the division of labor and the more vertical levels in the structure, the more complex it becomes.
2. Formalization: The extent to which the organization relies on rules and procedures to control employee work.
3. Centralization: Defines the level at which decisions are made.
4. Is Departmentalization Necessary? Justify.
Yes, the division of labor is the basis for departmentalization. As an organization grows, it tends to differentiate and specialize.
5. Are All Types of Departmentalization Suitable for Every Organization?
No. Here are the types:
- Departmentalization by Function
- By Product
- Geographic
- By Customer
- By Process or Equipment
- By Project
True or False
6. Explain the Types of Departmentalization, their Advantages, and Disadvantages
- By Function: Grouping activities and people with a logical relation to the activity.
Benefits:
- Allows grouping of specialists under one head.
- Suitable for companies with few product lines.
Drawbacks:
- Not appropriate when technology and external circumstances are changing.
- Tends to reduce horizontal or interdepartmental cooperation.
By Products: The company features dedicated to the manufacture or sale of various product lines.
Benefits:
- Sets departmental responsibility for the conduct of sales of products.
- Allows the department to assess its continuity or change depending on the success of the product.
Disadvantages:
- Not applicable to companies with a single product line.
- Not applicable for companies with many product lines as the operating cost increases.
- Geographic: Arises when firms operate branches in the same city, country, or different countries.
Benefits:
- Greater adaptability to local and regional conditions.
- Ideal for retailers.
Drawbacks:
- Reduces the coordination of the work entrusted.
- Decreases specialization.
- By Clients: Creating units responsible for meeting the needs of different types of customers.
Benefits:
- Encourages all employees to focus on customer satisfaction.
- Sets the responsibility for customer service.
Drawbacks:
- May sacrifice other objectives of the organization.
- By Processes: Common in factories, breaking down time and motion of man and machine.
Benefits:
- Improves the physical arrangement and the rational allocation of products.
- Ideal when the product technology is permanent.
Disadvantages:
- Contraindicated when technology undergoes changes.
- Lack of flexibility and adaptation.
- By Projects: Grouping according to the initiation or conclusion of a project.
Benefits:
- Easy to measure time and feed production.
Drawbacks:
- Critical since it generally requires hiring and firing staff and suppliers for each project.