PROCESS OF STRUCTURING AN ORGANIZATION

Organization structure is the result of organizing process. An organizational structure is the formal framework by which job tasks are divided, grouped, and coordinated. It is an established pattern of relationships among the components of the organization. It shows the vertical flow of responsibility, authority and accountability, and the main line of communication. When managers develop or change an organization's structure, they are engaged in organization design, a process that involves decision about five key elements which are described below.

(1) Work Specialization

Work specialization describes the degree to which tasks in an organization are divided into separate jobs. An entire job is not done by one individual but instead broken down into steps, and a different person completes each step. It creates simplified tasks that can learned and completed relatively quickly.

(2) Departmentalization

Once jobs have been divided through work specialization, they have to be grouped back together so that common tasks can be coordinated. The basic by which jobs are grouped together is called departmentalization. Every organization will have its own specific way of classifying and grouping work activities.

(3) Chain of Command

The chain of command is the formal channel that defines the authority, responsibility, and communication relationship from top to bottom in an organizational. It clarifies who reports to whom.

(4) Span of Control

Since the early days of industrialization, managers worried about the number of people and departments one could effectively handle. Span of control determines the number of levels and managers in an organization. The number of employees who report to a manager determines his span of control.

(5) Authority

Once managers establish a span of control, they must decide how much authority individuals should have to do their jobs. Authority is the right to make decisions. Authority can be centralized or decentralized. Centralization describes the degree to which decision making is concentrated at a single point in the organization.