A. Can You Share Some Characteristics of An Effective Organizational Structure

Course: Management Theory and Practice
Internal Assignment Applicable for December 2020 Examination
1. A newly set up start-up company is confused about how to get their organizational structure
correct and would want to take some guidance from you
a. Can you share some characteristics of an effective organizational structure
Answer: Some characteristics of an effective organizational structure are:
Simplicity:
An organisation should have the simplest possible framework which fulfils the purpose. Every person in the
organisation should be clear about with whom he has to consult in a particular matter. Too many levels,
communication channels, and committees often cause more problems than solving them.
Minimum Managerial Levels:
As far as possible, there should be minimum managerial levels. Greater the number of managerial levels,
longer is the line of communication in the chain of command. This will create problems of delay and
distortion and increase cost in the organisation.
Provision for Top Management:

In the company form of organisation, the shareholders are generally indifferent to the day-to-day
affairs of the company. Similarly, the members of the board of directors also do not meet on regular
basis. Therefore, a link should be provided between the regular management team and members of
the board and shareholders.
Flexibility and Continuity:
An organisation should have the flexible structure. Also, continuity must be maintained in the organisation
structure over the period of time. However, since organisation structure is based on circumstances and
these are not fixed but change over the period of time, there is a need for incorporating the changes in the
organisation structure also.
Unity of Command:
The principles of unity of command and direction should be followed. Unity of command suggests that one
person should receive orders and instructions from one superior only. Every work in an organisation having
the same objective must be assigned to a single person. This provides clarity in carrying out the activities.
Clear Line of Authority:
Organizational structure should have clear lines of authority running from top to bottom or in horizontal
directions. It implies that one should be very clear about what he is expected to achieve or contribute and
what relationships should be maintained by him at his official level.
Application of Ultimate Authority:
It suggests that, although a superior manager assigns some of the work to his subordinates, he is ultimately
responsible for the accomplishment of the total work. Thus, he is responsible for his own work as well as
for the work performed by his subordinates. If this concept is applied, it ensures that every person carries
dual responsibility. As a whole, a manager is responsible for the total work assigned to him by his superior.
Delegation of Authority:
The concept of ultimate authority will be effective only when there is proper delegation of authority at
various levels of the organisation. A common problem in the organisational life is that the managers often
fail to delegate adequate authority and suffer from various problems.
Proper Emphasis on Staff:
Line functions should be separated from staff functions and adequate emphasis should be placed on
important staff activities. A line activity is that which serves the organisational objectives directly. On the
other hand, contribution of staff activities is indirect, that is, they help in carrying out the line activities so
as to realise the organisational goals.
b. Can you explain how will the 6 box model help the organization designing their
structure
Answer: The six-box model is used to evaluate the functioning of organisations. It is a framework that
represents the concerns to be addressed by organisations while designing their structures. This model
views organisations from formal and informal perspectives. Six critical areas are:
Purpose: This box is concerned with the overall direction of an organisation. In addition, in this
box, it is considered to what extent people are clear about the organisation’s vision and mission and
provide support to meet the organisation’s purpose. We should ask the question whether
organizational members agree with and support the organization’s mission and goals.
Structure: The box represents that the organisation’s structure should be well fitted with the
organisation’s purpose. We should ask the question whether there is a fit between the purpose and
the internal structure of the organization.
Relationships: There are three most important relationships in an organisation. They are between
individuals; between different departments; and between individuals and their jobs. Quality of these
relationships is important for managing conflicts in the organisation. Effective communication and
coordination are the two main tools to improve the quality of relationships in the organisation. We
should ask the question that what type of relations exist between individuals, between
departments, and between individuals and the nature of their jobs? Is their interdependence? What
is the quality of relations? What are the modes of conflict?
Rewards: This box is concerned with the compensation packages and incentive system of the
organisation. A fair reward mechanism acts as a motivating factor and prompts employees to work
towards organisational goals and objectives. The structure of the organisation should be such that
the performance of employees is rewarded. We should ask the question that what does the
organization formally reward, and for what do organizational members feel they are rewarded and
punished? What does the organization need to do to fit with the environment?
Leadership: This box is central as leaders are responsible for monitoring the performance of the
other five boxes and maintaining a balance among these boxes. Leaders define purposes, embody
these purposes in programs, maintain the organisation’s integrity, and manage conflicts. We should
ask if leaders define purposes. Do they embody purposes in their programs?
Helpful Mechanisms: Helpful mechanisms are the cement that binds an organisation together to
make it more than a collection of individuals with separate needs. The mechanisms are the processes
that help employees to accomplish their jobs and meet organisational objectives. A few examples of such
mechanisms are planning, control, budgeting, information systems, etc. We should ask if these
mechanisms help or hinder the accomplishment of organizational objectives
The framework in which the organization defines how tasks are divided, resources are deployed,
and departments are coordinated.
 A set of formal tasks assigned to individuals and departments.

 Formal reporting relationships, including lines of authority, decision responsibility, number
of hierarchical levels and span of managers control.
 The design of systems to ensure effective coordination of employees across departments.

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Course: Management Theory and Practice

Internal Assignment Applicable for December 2020 Examination

a. Can you share some characteristics of an effective organizational structure

Answer: Some characteristics of an effective organizational structure are:

Minimum Managerial Levels:

Provision for Top Management:

Flexibility and Continuity:

Clear Line of Authority:

Proper Emphasis on Staff:

 A set of formal tasks assigned to individuals and departments.

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