6 Key Elements of Organizational Structure

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6 Key Elements of Organizational Structure Work Specialization This idea explains the level to which assignments in a company are split into separate activities. The principle of work specialization is that a complete task is not performed by one person, but is broken into steps, with each step accomplished by another individual. Departmentalization The basis by which positions are categorized the same is called departmentalization. The five common types of departmentalization involve product, functional, process, geographical, and customer departmentalization. Chain of command This is the line of power that goes from upper managerial levels to lower levels and explains who reports to whom. It assists teams in answering questions for instance “To whom am I responsible?” or “Who do I go to if I have a problem?” Span of control This theory is significant because, to a large extent, it establishes the amount of managers and levels a corporation has, the larger or wider the span of control, the more efficient the corporation. Centralization and decentralization Centralization depicts the extent to which decisions are focused on one point in the corporation. If upper level managers make the corporation’s decisions with little or no involvement from below, then the corporation is centralized. However, the more that lower-level workers are allowed to make decisions, or participate in the decision process the more decentralization there is. Formalization Describes the extent to which tasks within the corporation are standardized and the level to which associate performance is directed by procedures and rules. With a highly formalized position, the individual doing that particular task would have the least amount of judgment over when it’s to be done, what is to be done, and how that individual could do it ((Robbins, S. P., & Coulter, M. (2012).

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