Montana,P.andCharnov,B.

Management:AStreamlinedCourseforStudentsand
BusinessPeople.(Hauppauge,NewYork:BarronsBusinessReviewSeries,1993),
pp.155169.

Chapter11:ORGANIZATIONALSTRUCTURES:
CONCEPTSANDF0RMATS
KEYTERMSdepartmentalizationthegroupingofrelated
functionsintomanageableunitstoachievetheobjectivesofthe
enterpriseinthemostefficientandeffectivemanner.
delegationtheprocessthatmakesmanagementpossiblebecause
managementistheprocessofgettingresultsaccomplishedthrough
others.Delegationistheworkamanagerperformstoentrustothers
withresponsibilityandauthorityandtocreateaccountabilityfor
results.Itisanactivityoftheorganizingfunction.
scalarprinciple(chainofcommand)acleardefinitionofauthorityin
theorganization.Thisauthorityflowsdownthechainofcommand
fromthetopleveltothefirstorlowestlevelintheorganization.
centralizationoccursinanorganizationwhenalimitedamountof
authorityisdelegated.
decentralizationoccurswhenasignificantamountofauthorityis
delegatedtolowerlevelsintheorganization.
contingencyapproachanapproachtoorganizationalstructurethat
statesthatthemostappropriateorganizationalstructuredependson
thesituation,consistingoftheparticulartechnology,the
environment,andmanyotherdynamicforces.

Whentwoormorepeopleworktogethertoachieveagroupresult,it
isanorganization.Aftertheobjectivesofanorganizationare

established,thefunctionsthatmustbeperformedaredetermined.
Personnelrequirementsareassessedandthephysicalresources
neededtoaccomplishtheobjectivesdetermined.Theseelements
mustthenbecoordinatedintoastructuraldesignthatwillhelp
achievetheobjectives.Finally,appropriateresponsibilitiesare
assigned.
Determiningthefunctionstobeperformedinvolvesconsiderationof
divisionoflabor;thisisusuallyaccomplishedbyaprocessof
departmentalization.

DEPARTMENTALIZATION
Groupingrelatedfunctionsintomanageableunitstoachievethe
objectivesoftheenterpriseinthemostefficientandeffective
mannerisdepartmentalization.Avarietyofmeanscanbeutilized
forthispurpose.Theprimaryformsofdepartmentalizationareby
function,process,product,market,customer,geographicarea,and
evenmatrix(alsocalledprojectorganization).Inmany
organizations,acombinationoftheseformsisused.
FUNCTION
1

Perhapstheoldestandmostcommonmethodofgroupingrelated
functionsisbyspecializedfunction,suchasmarketing,finance,and
production(oroperations).Sometimesthisformof
departmentalizationmaycreateproblemsifindividualswith
specializedfunctionsbecomemoreconcernedwiththeirown
specializedareathanwiththeoverallbusiness.Anexampleof
departmentalizationbyfunctionappearsinFigure111below.
PROCESS
Departmentalizationcanalsotakeplacebyprocess.Thistypeof

departmentalization,whichoftenexistsinmanufacturingcompanies,
isillustratedinFigure112below.
PRODUCT
Wheneverspecializedknowledgeofcertainproductsorservicesis
needed,departmentalizationbyproductmaybebest.Thisusually
occursinlargediversifiedcompanies.Thisformof
departmentalizationisillustratedinFigure113below.
MARKET
Whenaneedexiststoprovidebetterservicetodifferenttypesof
markets,departmentalizationbymarketmaybetheappropriate
form.Anexampleofabusinessservingnonprofitmarkets,which
usesthemarketformofdepartmentalization,isshowninFigure11
4below.

CUSTOMER
Sometimeskeyormajorcustomerswarrantdepartmentalizationby
customer.Thisisoftenthecaseinbanks.SeeFigure115below.
GEOGRAPHICAREA
Whenorganizationsarespreadthroughouttheworldorhave
territoriesinmanypartsofacountry,departmentalizationby
geographicareamayprovidebetterservicetocustomersandbe
morecosteffective.Atypicalexampleforthisformof
departmentalization.isshowninFigure116below.
MATRIX(PROJECTORGANIZATION)
Departmentalizationbymatrix,orproject,hasreceivedconsiderable
useinrecentyears,particularlyinsuchindustriesasaerospace(e.g.,
NASA).Inthismethod,personnelwithdifferentbackgroundsand
experiencesthatbearontheprojectareassembledandgiventhe
specificprojecttobeaccomplishedwithinacertaintimeperiod.
Whentheprojectiscompleted,thesespecializedpersonnelreturnto
theirregularworkassignments.Anexampleofthisformis
illustratedinFigure117below;itoftentakestheshapeofa
diamond.

COMBINATIONAPPROACH
Manyorganizations,particularlylarge,physicallydispersedand
diversifiedorganizations,utilizeseveraldifferentformsof
departmentalization.Figure118isanorganizationalchartshowing
theuseofseveralformsofdepartmentalization.

YOUSHOULDREMEMBER
Determiningthefunctionstobeperformedinanorganization
involvesconsiderationofdivisionoflabor;thisisusually
accomplishedbyaprocessofdepartmentalization.Theprimary
formsofdepartmentalizationarebyfunction,process,product,
market,customer,geographicalarea,matrix(project)orsome
combinationoftheseforms.

DELEGATIONTHEARTOFMANAGING
Asshownearlier,theprocessofmanagingbeginswiththe
establishmentofobjectives.Oncetheobjectiveshavebeen
established,thefunctionsthatmustbeaccomplishedareconsidered.
Thentheworktobeperformedortheresponsibilitiestobeassigned
aredetermined.Thismeansitisnecessarytoknowthepersonnel
andphysicalresourcesneededtoaccomplishtheobjectivesofthe
enterprise.Thus,whenthefunctions,personnel,andotherresources
aregroupedtogetherbysomemeansofdepartmentalizationintoa
logicalframeworkororganizationalstructure,theprocessof
delegationbegins.

Delegationistheprocessthatmakesmanagementpossible.Why?
Becausemanagementistheprocessofgettingresultsaccomplished
throughothers.
DELEGATIONPROCESS,AUTHORITY,AND
ACCOUNTABILITY
Atthemomentajobbecomestoocomplex,toodiverse,ortoo
voluminousforoneperson,theneedfordelegationarises.Inits
simplestform,imaginethesoleadministratorwithobjectivesand
withnotimetoaccomplishthem.Meansallowing,themanagercan
createanewjob,hireanemployee,andassigntheaccomplishment
oftheobjectivestothenewemployee.
4

Tomeettheseresponsibilities,thenewemployeemustalsohavethe
authoritytoachievethem.Thus,authorityisdelegatedalongwith
theresponsibility.Themanager,however,isstillultimately
responsible.Byassigningsomeofhisorherresponsibilities,the
managertransfersorcreatesaccountability.Iftheemployeedoesnot
exercisetheresponsibilityproperly,themanagercanalways
withdrawtheauthority.Delegationwithoutcontrolisabdication.
Inpractice,theprocessofmanagementworksinconjunctionwith
theprocessofdelegation.Sincemanagementistheprocessof
gettingresultsthroughothers,delegationfacilitatesthatprocessby
assigningresponsibilities,delegatingauthority,andexacting
accountabilitybyemployees.
Thedelegationprocessworksasfollows.Themanagerhascertain
definedobjectives(i.e.,results)toaccomplishattheendofthe
budgetperiod.Heorsheassignstheresponsibilities(i.e.,dutiesto
beperformed)tokeyemployees,alongwiththecommensurate
authoritytogowiththoseresponsibilities.Thus,theaccomplishment
oftheassignedresponsibilitiesshouldequalthedefinedobjectives.

Themanagerthendevelopsstandardsofperformancewitheachkey
employee(i.e.,theconditionsthatshouldexistwhenajobisdone
well).Thesestandardsshouldbedevelopedmutuallytobeeffective.
Inessence,thesestandardsofperformancebecomethe
accountabilityofeachemployeeforthebudgetperiod.The
successfulaccomplishmentofthestandardsofperformanceshould
equaltheassignedresponsibilities.Theprocesscontinueswiththe
appraisalofkeysubordinatesratedagainsttheagreedupon
standardsofperformanceandcloseswithevaluationandfeedbackto
thebeginningofthenextbudgetcycle,whentheprocessbeginsall
overagain.SeeFigure119below.
RISKSINDELEGATION
Thesheervolumeofmanagementresponsibilitiesnecessitates
delegation.Thereissomewhatofaparadoxinthissituation,
however,becausedelegationinvolvestakingrisks.Amongtherisks
ofdelegationarelossofcontrol,reversedelegation,andevenlossof
ajob.
LOSSOFCONTROL
Ingivingoverauthoritytoanother,themanagerlosessomecontrol
overthepropercompletionofaproject.Themanagerwhohaslived
bytheadage"Ifyouwantitdoneright,doityourself'mayfindit
difficulttodelegatetasksforwhichheorshewillultimatelybeheld
accountable.

Thekeytosuccessfuldelegationisassigningtheright
responsibilitiestotherightperson.Ofcourse,oneneverknowswho
therightpersonsareuntilonemeetsandworkswiththem,butit
mustrealisticallybeassumedthatagivenorganization,department,
orsectionemploysatleastsomecompetent,willing,andresponsible
individuals.Thisassumptiondoesnotaddressitselftothefactthatit
isnearlyimpossibletodayforthemanagertobetechnicallysuperior
toallemployees.Astaffthatisnotutilizedeffectivelybecauseofa
manager'sfailuretodelegateisamajorlosstoanorganization,a
wasteofhumanresources.
REVERSEDELEGATION
Animportantconsiderationforthemanagerwhotriestodo
everybody'sjobisthatheorshedoessoattheexpenseofthejobfor
whichhewashiredmanaging.Aninterestinganalogythat
underscoresthevalueofdelegationformanagement'ssakeisthe
"monkeyontheback"analogy,whichclaimsthatmanagersspend
farmoretimewiththeiremployeesthantheyevenfaintlyrealize.
Thishabitoccursespeciallywhenaproblemisbroughttothe
manager'sattention.Inencounterswithemployees,themanager's
useofsimplephrases,suchas"sendmeamemoonthat,"or"letme
thinkaboutthatandI'llletyouknow,"or"justletmeknowwhatI
cando,"causesthe"monkey"(problem)tojumpontothemanager's

back.
Themanagerassumestheresponsibilityforhandlingthetaskthat
wasdelegatedtotheemployeeinthefirstplace,andwhenthe
employeereachesanimpasse,themanagertakesthenextstep.This
isreversedelegation,andmanyemployeesareadeptatit.Naturally,
therewillbesituationsinwhichthenextstepisjustified,butunless
themanagerwantsendlesslinesattheofficedoor,heorsheshould
avoidthecasualandrepeateduseofthosephrasesthatpermit
employeeproblemstorideonthemanager'sback.infact,this
principleofdelegationisthataccountabilitytoasuperiorcannotbe
delegated.
Asolutiontothisproblemistoencourageinitiativeinemployees.
Employeesshouldnothavetowaituntiltoldtodosomething;nor
shouldtheyhavetoask.Theyshouldpracticethecompletionof
assignedtasks.Bykeepingtheresponsibilitywhereitbelongs,the
managerwillincreasediscretionarytimetomanageandcanstill
handlesystemimposedtasks.Todevelopinitiativeinemployees
earlyisoneofthewaystodevelopanewgenerationofcapable
managers.
LOSSOFJOB
Theforegoingdiscussionbringstomindanotherriskindelegation
frommanagement'sviewpoint.Isitpossibletodelegateone'sself
rightoutofajob?Supposeasubordinatedevelopssomuch
initiativethatheorshebecomessuperiortotheboss.Thisisa
threateningproblemforthemanager.Theemployeewouldbevery
happyifhisorherdevelopmentresultedinpromotion,butwhatif
thepromotionmeansthemanager'sjob?
Consensusamongtheoristssuggeststhattheemployeeshouldbe
giventheopportunitytoperformtoashighalevelofresponsibility
aspossibleifthisimprovesthegroup'sperformance.Themanager

shouldthenendeavortorewardthatpersonaccordingly,evenifit
meanshelpingthatpersontolandabetterloboutsidethe
organization.Toneglectandwastethetalentsofanyindividualisas
criminalasthemisuseofcompanyfundsorequipment.
Inpractice,wehaveallheardstoriesfromindividualswhofeelmore
competentdimtheirmanagers.Thusitwouldseemthatthebest
safeguardamanagerhasinpreservinghisorherpositionistobea
goodmanagerandtoprepareforhisorherownadvancement.
6

TECHNIQUESOFDELEGATION
Theartofdelegationoftendependsonagivensituation.Plans
changeandpeoplediffer,butthisdoesnotimplythattheemployee
shouldhavetobenotifiedonadailybasisofwhatisneeded.Nor
doesitimplythattherearenotsomegenerallyacceptedtechniques
thatcanfacilitatetheprocessofdelegation,asdiscussedbelow.
Moresuggestionsaredetailedinthelistofdo'sanddon'ts.
DEFINITIONOFRESPONSIBILITIESANDAUTHORITY
Acleardefinitionofresponsibilitiesandtheauthoritytoaccomplish
themconstitutethefoundationoftheartofdelegation.Whenever
possible,theseresponsibilitiesshouldbestatedinwriting.The
employeeshouldalsohaveagoodideaofhowthejobfitsintothe
totalpictureandwhyitisimportant.Themanagershouldalso
encouragequestionsandbecompletelyapproachable.Thispractice,
incombinationwithexhibitingconfidenceandtrustbyallowing
subordinatestopursuegoalswithoutunduereporting,constant
checking,andotherexaggeratedformsofcontrol,willcreatea
supportiveclimateandhelptobuildaneffectiveworking
relationship.
PERFORMANCERATINGOncetheemployeeunderstandsthe

job,thatpersonshouldbemadeawareofhowperformancewillbe
measured.Thisstepinthemanagementprocesshasalreadybeen
mentioned.
Byandlarge,andwithinreason,managersreceivethetypeandlevel
ofjobperformancetheyexpectorinformallyacceptoveraperiodof
time.Infact,lowexpectationstendtobreedlowperformanceand
theoppositeistrueofhighexpectations.Thefailuretoconfront
lowerthandesiredlevelsofperformanceistantamountto
acknowledgingthemasacceptable;highexpectationsmeansetting
challengingbutachievablegoals.Thefocusshouldbeonresultsthat
aremotivatingandattainable.
Themanagershouldestablishasystemforsettingobjectivesandset
upaprocedureforperiodicallyreportingprogresstowardthese
objectives.Considerationoflessexperiencedemployeesdemands
morefrequentconsultationand,possibly,reporting.Themanager
whoiscommittedtodelegatingauthorityshouldavoidswitching
backandforthindelegation,therebycausingonlyconfusionand
stagnationamongemployees
AWARENESSOFLIMITATIONS
Itmayseemselfevident,butdelegationcannotbeusedwhenthe
individualdoesnotwelcomeadditionalresponsibility.Knowing
whowantsgreaterresponsibilityorpromotionisasimportantas
knowingwhoisqualifiedforajob.Itisoftendifficultforsuccessful
executives,whoowetheirsuccesstoadrivingdesireforgreater
responsibilityandrecognition,tounderstandotherswhoseemto
lackthatmotivation.
Inessence,themanageremployeerelationshipisoneof
interdependence.Amajorgoalofdelegationistoreduce
dependenceonthemanager,butthemanagerincursacertain

responsibilitytotheemployeeindelegation.Themanageris
responsibleforhelpingtheassistantdiscoverhowbesttodevelop
hisorherabilitiesinordertomeetfutureresponsibilities.
Managerscandevelopemployeesthroughtheartofdelegationand
shouldpracticethisartjudiciously.Witheffectivedelegation,a
managercanmultiplyhisorhereffectivenessand,throughothers,
achievetheresultsexpected.
PARITYOFAUTHORITYANDRESPONSIBILITY
7

Animportantprincipleoforganizationaswellasmanagementis
thatauthorityshouldequalresponsibility.Thisprincipleisknownas
theparityofauthorityandresponsibilityandensuresthatworkwill
beperformedwithaminimumamountoffrustrationonthepartof
personnel.Bynotdelegatingauthorityequaltoresponsibility,a
managerwillcreateemployeedissatisfactionandgenerallywaste
energiesandresources.
SCALARPRINCIPLE
Thisconceptisgenerallyreferredtoasthechainofcommand.It
meansthatthereshouldbeacleardefinitionofauthorityinthe
organizationandthatthisauthorityflows,onelinkatatime,through
thechainofcommandfromthetoptothebottomofthe
organization.Communicationintheorganizationisthrough
channels.Followingthisprinciplegenerallyresultsinclarification
ofrelationships,lessconfusion,andimproveddecisionmaking.

YOUSHOULDREMEMBER
Delegationistheprocessthatmakesmanagementpossiblebecause
managementistheprocessofgettingresultsaccomplishedthrough
others.Understandingtheprocessofdelegationinvolvesemploying

theprinciplesofresponsibility,authority,andaccountability,aswell
asunderstandingtheconceptofthechainofcommand(scalar
principle).

DELEGATIONDO'SANDDONTSDo's

Delegateassimplyanddirectlyaspossible.Giveprecise
instructions.

Illustratehoweachdelegationappliestoorganizationalgoals.

Mutuallydevelopstandardsofperformance.

Clarifyexpectedresults.

Anticipatethequestionsyouremployeesmayhave,andanswer
theminorder.

Discussrecurringproblems.

Seekemployeeideasabouthowtodothejob.

Accentuatethepositiveratherthanthenegative.Besupportive.
Exhibittrust.

Recognizesuperiorperformance.

Keepyourpromises.Don'ts

Donotthreatenyourstaff.Effectivedelegationdependsmoreon
leadershipskillsthanonpositionpower.

Donotassumeacondescendingattitude.

Donotmerelygiveanswers.Showanemployeehowtodo
somethingandwhyitisdonethatway.

Donotoverreacttoproblems.Refrainfromcriticizinganemployee
infrontofothers.

Avoidexcessivechecksonprogress.CENTRALIZATION

VERSUSDECENTRALIZATION
8

Theissuesofcentralizationanddecentralizationinvolvethe
principleofdelegationofauthority.Whenalimitedamountof
authorityisdelegatedinanorganization,itisusuallycharacterized
ascentralized.Whenasignificantamountofauthorityisdelegated
tolowerlevelsintheorganization,thebusinessischaracterizedas
decentralized.Centralizationanddecentralizationareopposites,and
therearedifferentdegreesofeach.Inahighlycentralized
organization,employeesatlowerlevelshavealimitedrangeof
decisionmakingauthority.Thescopeofauthoritytomakedecisions
indecentralizedorganizations,bywayofcontrast,isverybroadfor
lowerlevelemployees(seeFigure1110below).
Onecannotclassifyallformsofcentralizationaseffectiveor
ineffective.Thesameappliestodecentralization.Eachformhasits
advantagesanddisadvantagesandisaffectedbyanumberof
factors.Forexample,thesizeandcomplexityoftheenterprisecan
affectthedelegationofauthority.Ifanorganizationisverylargeand
diversified,thelimitationsofexpertisewillgenerallyleadto
decentralizationofauthoritytotheheadsofthesedifferent
businesses.ifspeedandadaptabilitytochangearecharacteristicof
thebusiness,ittendstowarddecentralization.Geographicdispersion
alsofavorsdecentralizationofauthority.Ontheotherhand,some
organizationshaveexcellentandspeedycommunicationssystems

thattendtofavorthecentralizationofauthority.Insituationsin
whichadequatepersonnelareunavailable,theorganizationtendsto
centralizedauthority.
ADVANTAGESOFCENTRALIZATION
1.

Closercontrolofoperations

2.

Uniformityofpolicies,practices,andprocedures

3.

Betteruseofcentralized,specializedexperts
ADVANTAGESOFDECENTRALIZATION

1.

Fasterdecisionmakingwithoutresorttohigherlevelconsultation

2.

Excellenttrainingexperienceforpromotiontohigherlevel
management

3.

Decisionsbetteradaptedtolocalconditions

YOUSHOULDREMEMBER
Theissuesofcentralizationanddecentralizationinvolvethe
principleofdelegationofauthority.Incentralization,alimited
amountofauthorityisdelegated;indecentralization,asignificant
amountofauthorityisdelegatedtolowerlevels.Eachformhasits
advantagesanddisadvantagesandisaffectedbyanumberof
factors,suchassizeoforganizationandtheamountofgeographic

dispersion.

ORGANIZATIONALSTRUCTURES
9

Theprimaryformalrelationshipsfororganizing,asdiscussed
earlier,areresponsibility,authority,andaccountability.Theyenable
ustobringtogetherfunctions,people,andotherresourcesforthe
purposeofachievingobjectives.Theframeworkfororganizing
theseformalrelationshipsisknownastheorganizationalstructure.It
providesthemeansforclarifyingandcommunicatingthelinesof
responsibility,authority,andaccountability.
MAJORTYPESOFORGANIZATIONALSTRUCTURE
Althoughthereareanumberofvariationsoforganizational
structure,weshalldiscusslineandstafforganizationsand
committeeorganizationhere.
LINEORGANIZATION
Thelineorganizationisthesimplestorganizationalstructure.Itis
the"doing"organization,inthattheworkofallorganizationalunits
isdirectlyinvolvedinproducingandmarketingtheorganization's
goodsandservices.Therearedirectverticallinksbetweenthe
differentlevelsofthescalarchain.Sincethereisaclearauthority
structure,thisformoforganizationpromotesgreaterdecisionmaking
andissimpleinformtounderstand.
Ontheotherhand,managersmaybeoverburdenedwhentheyhave
toomanyduties.Figure1111belowillustratesasimpleline
organization.
LINEANDSTAFFORGANIZATION
Whenstaffspecialistsareaddedtoalineorganizationto"advise;

"serve;orsupport"thelineinsomemanner,wehavealineand
stafforganization.Thesespecialistscontributetotheeffectiveness
andefficiencyoftheorganization.Theirauthorityisgenerally
limitedtomakingrecommendationtothelineorganization.
Sometimesthiscreatesconflict.However,suchconflictcanbe
reducedbyhavingstaffspecialistsobtainsomelineexperience,
whichwilltendtomakethembetterunderstandtheproblemsfacing
thelinemanagerstheysupport.Suchfunctionsashumanresources
managementandresearchanddevelopmentaretypicalstaff
functions.Figure1112belowprovidesanexampleofsucha
structure.

10

COMMITTEEORGANIZATION
Whenagroupofpeopleisformallyappointedtoconsiderordecide
certainmatters,thistypeofstructureisacommittee.Committees

canbepermanent(standing)ortemporaryandusuallysupplement
lineandstafffunctions.Sometimesadhocortemporarycommittees
aresetuptodealwithaspecificproblem.Oncethiscommittee
makesitsrecommendations,itisdissolved.Ontheotherhand,
permanentcommitteesusuallyactinanadvisorycapacitytocertain
organizationalunitsormanagers.Forexample,committeesareused
toalargeextentinuniversities.Theymayreporttoadeanor
departmentchair.Certaincommittees,calledpluralcommittees,
havetheauthoritytoorder,notonlytorecommend.These
committeesareusuallyreservedforaveryhighlevel,suchasthe
boardofdirectors.Anexampleisanexecutivecommitteeofthe
boardforcompensationorforsuccessionplanning.
Althoughcommitteeshaveanumberofadvantages,theyalsohavea
numberofdisadvantages,particularlybeingexcessivelytime
consuming.Hencetheyshouldbemanagedeffectively.
ORGANIZATIONALSTRUCTUREANDENVIRONMENTAND
TECHNOLOGY
Moststudiesthathavebeenconductedontherelationshipbetween
organizationalstructureandtheenvironmenthaveconcludedthat
thebestorganizationalstructureiscontingenttosomedegreeonthe
conditionsintheenvironment.Severalstudieshavealsoshowna
relationshipbetweentechnologyandstructure.Infact,these
researchersevensuggestthattechnologyitselfdeterminesstructure.
Thesestudiesandothershaveleadtoacontingencyapproachto
organizationalstructure.
CONTINGENCYAPPROACH
Thisapproachindicatesthatthemostappropriateorganizational
structuredependsnotonlyontheorganizationalobjectivesbutalso
onthesituation,whichincludestheenvironment,thetechnology
employed,therateandpaceofchange,themanagerialstyle,thesize

oftheorganization,andotherdynamicforces.
11

YOUSHOULDREMEMBER
Theframeworkfororganizingtheformalrelationshipsof
responsibility,authority,andaccountabilityisknownasthe
organizationalstructure.Thereareanumberofvariationsof
organizationalstructure,includingline,lineandstaff,and
committee.
Moststudiesoforganizationalstructureindicatearelationshiptothe
environmentaswellastothetechnologyemployed.Consequently,a
contingencyapproachtoorganizationalstructurehasdeveloped,
whichindicatesthatanumberofdynamicforcescananddoaffect
structure.

KNOWTHECONCEPTSDOYOUKNOWTHEBASICS?
1.

Whatisdepartmentalization?

2.

Whataretheprimaryformsofdepartmentalization?

3.

Describeamatrixformofdepartmentalization.

4.

Whyisdelegationtheartofmanaging?

5.

Describehowtheprocessofdelegationworks.

6.

Whatismeantbytheparityofauthorityandresponsibility?

7.

Whatisthescalarprinciple?

8.

Intheorganizationalcontext,whatismeantbycentralizationversus

decentralization?
9.

Howdoyoudifferbetweenlineandstaffinorganizationalterms?

10.

Whatisthecommitteeorganization,andwhatformscanittake?
TERMSFORSTUDY
centralizationcommitteeorganizationcontingencyapproach
decentralizationdelegationdepartmentalizationenvironmentline
organizationmatrixorganization
parityofresponsibilityandauthorityprojectorganization
reversedelegationscalarprinciple(chainofcommand)staff
organizationtechnology
12

ANSWERSKNOWTHEBASICS
1.

Departmentalizationistheprocessinwhichrelatedfunctionsare
groupedintomanageableunitstoachievetheobjectiveofthe
enterpriseinthemostefficientandeffectivemanner.

2.

Theprimaryformsofdepartmentalizationarebyfunction,process,
product,market,customer,geographicarea,andmatrix(alsocalled
projectorganization).Inmanyorganizations,acombinationofthese
formsisused.

3.

Departmentalizationbymatrix(orproject)involvesbringing
togetherpersonnelwithdifferentbackgroundsandexperiencethat
bearonaprojectandgivingthemacertaintimeperiodtocomplete
it.Oncetheprojectiscompleted,thesespecializedpersonnelreturn
totheirregularworkassignments.

4.

Delegationistheartofmanagingbecauseitmakesmanagement
possible,andmanagementistheprocessaswellastheartandskill
ofgettingresultsaccomplishedthroughotherpeople.

5.

Thedelegationprocessworksasfollows.Themanagerhascertain
definedobjectives(i.e.,results)toaccomplishattheendofabudget
period.Heorsheassignstheresponsibilities(i.e.,dutiestobe
performed)tokeyemployees,alongwiththecommensurate
authoritytogowiththoseresponsibilities.Theaccomplishmentof
theassignedresponsibilitiesshouldequalthedefinedobjectives.
Themanagerthendevelopsstandardsofperformancewitheachkey
employee(i.e.,theconditionsthatshouldexistwhenajobisdone
well).Thesestandardsshouldbemutuallydevelopedtobeeffective.
inessence,thesestandardsofperformancebecomethe
accountabilityofeachemployeeforthebudgetperiod.The
successfulaccomplishmentofthestandardsofperformanceshould
equaltheassignedresponsibilities.Theprocesscontinueswiththe
appraisalofthekeysubordinatesagainsttheagreeduponstandards
ofperformanceandcloseswithevaluationandfeedbacktothe
beginningofthenextbudgetcycle,whentheprocessbeginsallover
again.

6.

Itmeansthatauthorityshouldequalresponsibility

7.

Thescalarprinciplemeansthatthereshouldbeacleardefinitionof
authorityintheorganizationandthatthisauthorityflows,onelinkat
atime,throughthechainofcommand.

8.

Theissuesofcentralizationanddecentralizationinvolvethe
principleofdelegationofauthority.Whenalimitedamountof
authorityisdelegatedinanorganization,itisusuallycharacterized
ascentralized.Whenasignificantamountofauthorityisdelegated
tolowerlevelsintheorganization,thebusinessischaracterizedas
decentralized.

9.

Thelineisthesimplestorganizationalstructure.itisthe"doing"
function,inthattheworkofallorganizationalunitsisdirectly
involvedinproducingandmarketingtheorganization'sgoodsand
services.Whenstaffspecialistsareaddedtoalineorganizationto
"advise,""serve,"or"support"thelineinsomemanner,wehavea
lineandstafforganization.Staffauthorityisgenerallylimitedto
makingrecommendationstothelineandcontributingtothe
effectivenessandefficiencyoftheorganization.
13

10.Whenagroupofpeopleisformallyappointedtoconsideror
decidecertainmatters,thistypeofstructureisacommittee.
Committeescanbepermanent(standing)ortemporaryandusually
supplementthelineandstafffunctions.
14