Understanding Organizational Structures by Esam Mohamed Mohamed Helal, Ahmed Hussin, Sameh Adel, MQM, Group Dynamics

Understanding
Organizational Structures
Project submitted to fulfill the requirement of
Master of Quality Management
Subject Name : Group Dynamics
1
Understanding Organizational Structures
• Project presented by:

 Esam Mohamed Mohamed Helal
 Ahmed Hussin Nasr
 Sameh Adel
• Project presented to :
 Dr. Mohamed Wahba
2
In this presentation
1- Background
2- Key Elements of Organizational Structures
3- Types of Organizational Structures
• Vertical structures (functional and
divisional).
• Matrix organizational structures.
• Open boundary structures (hollow, 3
modular, virtual).
Background
• Organizational structure is the
method by which work flows
through an organization.
• It allows groups to work
together within their individual
functions to manage tasks.
4
Background
• Traditional organizational structures tend to be more

formalized—with employees grouped by function (such
as finance or operations), region or product line.
• Less traditional structures are more loosely woven and
flexible, with the ability to respond quickly to changing
business environments.
5
Background
• Organizational structures have evolved since the 1800s.

• In the Industrial Revolution, individuals were organized
to add parts to the manufacture of the product moving
down the assembly line.
6
Background
• Frederick Taylor's scientific management theory
optimized the way tasks were performed, so
workers performed only one task in the most
efficient way.
• In the 20th century, General Motors pioneered a
revolutionary organizational design in which
each major division made its own cars. 7
Background
• Today, organizational structures are changing swiftly—

from virtual organizations to other flexible structures.
• As companies continue to evolve and increase their global
presence, future organizations may embody a fluid, free-
forming organization, member ownership and an
entrepreneurial approach among all members.
8
Background
• A hallmark ‫ السمة المميزة‬of a well-aligned organization is its
ability to adapt and realign as needed.
• To ensure long-term viability, an organization must adjust
its structure to fit new economic realities without
diminishing core capabilities and competitive
differentiation.
• Organizational realignment involves closing the structural
gaps impeding organizational performance. 9
Key Elements of Organizational Structures
Five elements create an organizational
structure:
1. Job Design
2. Departmentation
3. Delegation
4. Span of Control
5. Chain of Command
These elements comprise an organizational
chart and create the organizational structure 10
itself.
Job design
” The process of
organizing work into
the tasks required to
perform a specific job”
An HR manager should have a keen interest in the
design and specification of individual jobs within the
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organization
Job design
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Objectives of Job Designing
The five performance objectives
give us a guide to what is
relevant in job design decisions
Quality
Speed
Dependability
Flexibility
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Cost
Quality
Speed
The ability of staff to produce high-
Dependability quality products and services can be
Flexibility affected by job design
Cost
14
Quality Speed
Sometimes Speed of response is the
Dependability dominant objective to be achieved in
job design
Flexibility
Cost
15
Quality Dependability
Speed Building trust with others by doing
what I say I will do
Flexibility
Cost
16
Quality Flexibility
Speed Job design can affect the ability of the
Dependability operation to change the nature of its
activities.
Cost
17
Quality Cost
Speed All the elements of job design
Dependability described above will have an effect on
the productivity, and therefore, the cost
Flexibility of the job
18
Departmentation
“Grouping of operating
tasks into jobs”
The combining of jobs into efficient work groups and

combining of groups into divisions called as
“Departments” 19
Delegation
“The assignment of
authority to another
person to carry out
specific activities”
Delegation is an important core competency as well as
being as part of a larger strategic plan to develop team
members who are ready for it. 20
Delegation
Why Do Leaders
Fail to Delegate
Effectively?
21
Delegation
•Ego – I can do it better myself.
•Time – Takes too long to explain.
•Accountability – I’m accountable if it
goes wrong.
•Skills Gaps – My staff don’t possess the
technical skills.
•Authority Threat – Delegation reduces
my own authority. 22
Popular
Reasons Why
Managers Fail
to Delegate
23
Span of Control
“The number of
individuals who
report to a
manager”
24
25
Chain of Command
“Refers to a line of
authority”
26
27
The company's strategy of managerial centralization
or decentralization also influences organizational
structures.
Strategy Centralization Decentralization
Decision-making Higher levels of Lower levels of the hierarchy
authority management
Structure of Pyramid structure Leaner, flatter organization
organization
Recommended Conflicting goals Conflicting strategies, uncertainty or
when and strategies complexity require local adaptability
among operating and decision-making.
units create a
need for a 28
uniform policy
Types of Organizational Structures
Today, organizations are usually structured

vertically, vertically and horizontally, or with
open boundaries. Specific types of structures
within each of these categories are the following:
• Vertical—functional and divisional.
• Horizontal—matrix.
• Boundary-less (also referred to as open
boundary, modular, virtual). 29
VERTICAL STRUCTURES
(FUNCTIONAL AND DIVISIONAL)
• The functional structure divides work and employees by
specialization.
• This structure works best for organizations that remain
centralized (i.e., The decision-making occurs at higher
levels of the organization).
• Few shared concerns or objectives between functional
areas (e.g., marketing, production, purchasing, IT) 30
VERTICAL STRUCTURES
(FUNCTIONAL AND DIVISIONAL)
• Divisional structure in one of three ways:

Product — men's wear, women's wear and children's clothing.
Market — retail store, e-commerce and catalog.
Region — Northeast, Southeast and Southwest.
31
VERTICAL STRUCTURES
(FUNCTIONAL)
32
VERTICAL STRUCTURES
(DIVISIONAL)
33
HORIZONTAL STRUCTURES
(MATRIX)
• A matrix structure combines the functional and divisional
structures to create a dual-command situation.
• In a matrix structure, an employee reports to two managers who
are jointly responsible for the employee's performance.
• Typically, one manager works in an administrative function, such
as finance, HR, information technology, sales or marketing, and
the other works in a business unit related to a product, service,
customer or geography. 34
HORIZONTAL STRUCTURES
(MATRIX)
35
BOUNDARY-LESS STRUCTURES
(OPEN BOUNDARY, MODULAR, VIRTUAL)
• Open boundary organizations are defined specifically by a lack

of structures.
• Free flow of information and ideas to drive innovation,
efficiency and growth in a world that’s constantly changing.
36
(OPEN BOUNDARY, MODULAR, VIRTUAL)
• The Modular structure focuses on dividing the business into

small, tightly knit strategic business units (SBUs), which focus
on specific elements of the organizational process.
Interdependence among the units is limited because the focus of
many SBUs is more inward than outward and because loyalty
within SBUs tends to be very strong
37
(MODULAR)
38
(OPEN BOUNDARY, MODULAR, VIRTUAL )
• The term virtual organization is used to describe a network of
independent firms that join together, often temporarily, to produce
a service or product.
• Virtual organization is often associated with such terms as virtual
office, virtual teams, and virtual leadership.
• The ultimate goal of the virtual organization is to provide
innovative, high-quality products or services instantaneously in
response to customer demands. 39
40

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Understanding

• Project presented by:

• Traditional organizational structures tend to be more

• Organizational structures have evolved since the 1800s.

• Today, organizational structures are changing swiftly—

The combining of jobs into efficient work groups and

Today, organizations are usually structured

• Divisional structure in one of three ways:

• Open boundary organizations are defined specifically by a lack

• The Modular structure focuses on dividing the business into

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