Strategic Phase of Organizational Design
The strategic phase of the organizational design is actually based structure of the company. The structure of the organization is considered to be the one of the tools which helps the managers of the company to harness the resources for getting things done. The structure of the organization is based on a framework which will help the company with its task and it is also going to help with dividing the tasks and tell them how to carry them out. It also shows that how the resources that are used within the organization process are deployed and how the departments within the organization coordinate those resources. (Miles & Snow, 2003)
Organizational Chart Organizational chart can be defined as the visual representation of the structure of the organization. The chart basically shows that how the organization is into major departments, i. e. it basically shows the chain of command within the organization, shows the tasks that need to be carried and by whom within the organization, it also shows that how the departments of the organization fit in together, its order and logic that is used and lastly it shows that how each and every employee within the organizational chart has an
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(Miles & Snow, 2003) An organizational chart is demonstrated in the following figure; Departmentalization The work within the formal structure of the organization needs to be divided up among different departments, so that the organization is able to achieve its targeted goals and objectives in time and to gain an edge over its competitors. Departmentalization can be defined as the way how the people of the company are grouped together as departments and the departments grouped together as an organization. There are five approaches to departmentalization that come under the strategic phase of the organizational design.
They are as follows:- • Functional Approach: in the functional approach the people are grouped together on the basis of similar skills and activities related to work. In this approach there is excellent coordination within the functions and the resources of the company are used efficiently. • Divisional Approach: in the divisional approach the departments of the organization are actually grouped together as separated division which are self-contained and which are based on a similar product, program or even geographical location.
Under the divisional approach there is development of general management skills and there is great coordination among functional departments. (Daft, 2008) • Matrix Approach: in the matrix approach both functional and divisional approaches are implemented on simultaneous basis and can overlay each other. There are two chains of command rather than one and it so even happens that employees under the matrix approach would even have to report to two bosses at the same time.
Under the matrix approach the tasks of the employees are enlarged and there is flexibility and adaptability to change in the environment. • Team Approach: teams are created under this approach throughout the organization, to achieve the goals and objectives. Teams can exist at any hierarchical level of the organization. Under the team approach the employees feel empowered and there is a decrease in the overhead administration costs. • Network Approach: in the network approach the organization becomes small, i. e. it comes close to each other.
The departments are given more freedom and they can be located anywhere on the globe. Under this approach there is an increase in the organizations global competitiveness and the workforce become more diverse which means that it become more flexible towards change. (Daft, 2008) Mechanistic and Organic Structure • Mechanistic Structure: In mechanistic structure, the structure of the company is vertical, which dominates the entire organization. The work activities are rigidly defined which are then again broken into routine jobs.
There are great deals of rules and regulations which are implemented within the company and the major form of control is the hierarchy of the authority, i. e. from the CEO to the Directors to the managers etc. Decision making over here is centralized and the flow of communication is a downward path. There are practically no teams and the tasks are specialized. • Organic Structure: In organic structure, the structure of the company is horizontal and it dominates the company, i. e. the employees of the company are empowered.
The tasks under the organic structure are redefined on a regular basis so that they are able to meet the needs of the employees and the organization. Decision making over here is de-centralized and informal, i. e. the authority is based on the employee’s expertise instead of the the hierarchy. There are teams and the work tasks are shared. The relationship between the external environment of the organization and both the structures (organic and mechanistic) are shown in the following figure;