Management deals with the process that drives the organization towards its performance. The processes which are to be followed to initiate the organizational structure and to create strategies and the steps to be taken by managers are all about management. This assignment is based on two topics, which are; a) Critically analyze the six key elements in Organizational Design, b) Explain what managers do in Strategic Management Process. With the help of the Organizational Design, a firm can start and to compete into the market and achieve its goal. It has six elements by which this process can be done, which are; Work Specialization; Departmentalization; Chain of Command; Span of Control; Centralization Vs Decentralization; and Formalization. And with the help of the Strategic Management Process, which includes nine steps, these are; Identify the organization’s current mission, objectives, and strategies; Analyze the environment; Analyze the organization’s resources; Identify opportunities and threats; Identify strengths and weaknesses; Reassess the organization’s mission and objectives; Formulate strategies; Implement strategies; and Evaluate results.

Principles of Management: Organizational Design

What are the benefits of organizational design?

Organizational design can inspire employees to take part in the companys management, allowing the business to hire leaders from within. Companies can also use organizational design to express the hierarchy of leadership and daily expectations for each employee. Other benefits of implementing an effective organizational design may include:

What is organizational design?

Organizational design, also called organizational structure, is a step-by-step method that identifies aspects of workflow, production and systems within a company or organization. This method allows businesses to re-evaluate their practices and find better and more effective ways to achieve the companys goals. The organizational design process can help a company in a variety of ways, including:

What are the elements of organizational design?

Management teams consider the unique elements of organizational design in order to craft the best plan for their company. There are six elements of organizational design that can affect how employees and managers interact and divide primary duties. The six elements are:

1. Work specialization

Work specialization is a process that assigns each professional to a specific task. Because the management of the company is clear in what they expect from their employees, each one can focus on their task, gaining special skills and experience that can help them improve.

When using work specialization, management professionals often assign tasks to the employee who is best suited for it. This means the professionals work history, skill set and education align with the task. Work specialization allows an employer to focus less on training and redirect its energy and resources to other company needs.

For example, factory and warehouse companies use work specialization for assembly line workers. In a factory that specializes in making gift baskets, one professional may arrange the decorative paper in the basket while another professional adds fruits to the basket.

2. Departmentalization and compartments

Departments and compartments are teams of professionals within a larger company. This component of organizational design allows each compartment or department to focus on a specific task the professionals in each group work together to achieve.

Compartments refer to teams of professionals who each are from a different career path and specialty. These professionals each use their own talents to help complete the project. For example, when a film company wants to produce a new movie, they hire a director, a casting agent, a costume designer and other professionals to create the film.

Departments refer to groups of professionals of a similar skill set within a company. Each of these professionals usually has the same primary duties and uses similar practices to meet the same goal. For example, a companys accounting department all work to manage the companys finances and taxation records using the same methodologies and practices.

3. Formalization of elements

Formalization specifies the relationships and roles within a company. Larger companies often have a more distinct formalization of primary roles than smaller companies. This is because employees may fill multiple roles in a smaller company. For example, in a neighborhood pizza shop, the manager may be responsible for food preparations besides their leadership responsibilities.

Formalization of elements also can clarify workplace rules, such as how many breaks an employee can take during their shift. Because these elements can shape workplace culture, its important to consider them carefully when crafting a companys organizational design plan.

4. Centralization and decentralization

Centralization and decentralization refer to the senior levels of employees who can influence company decisions. Each company rests somewhere on a scale of centralization.

For example, with centralization, some companies give the senior level of professionals complete influence over the decision-making process, while with decentralization, a company may seek the input of lower-level employees as well. Allowing more employees to influence company practices can give employees a stronger sense of pride and satisfaction in their work. However, allowing only senior staff members to share their input can be more time-effective.

5. Span of control

A leader can be more successful when they manage an appropriate amount of employees. Span of control is an element of organizational design that accounts for the number of people a leader supervises and the tasks they handle. For example, the acquisitions department of a publishing company is likely to have a large volume of incoming book pitches. If the department employs many readers to accommodate this demand, the department may need multiple managers to monitor and guide the readers work.

Clarifying a specific span of control can ensure managers can handle all their tasks while overseeing daily operations and monitoring the progress of their designated team members. The ideal span of control can depend on a variety of factors including:

6. Chain of command

The chain of command of a company describes the business hierarchy and can affect workplace culture and the efficiency of work production. An organizational chart can visually portray each employees place in the company hierarchy, and the company may have a strict or flexible chain of command.

With a strict chain of command, each employee has a direct supervisor with an exception for the chief executive officer. In a more flexible chain of command, the owner may be the highest point of contact, then a manager or two in the middle with the rest of the employees ranking under the managers. In this scenario, the lowest level of employee would report to the managers and the managers report to the business owner.


What are the six elements of organizational design?

The six elements are:
  • Work specialization. Work specialization is a process that assigns each professional to a specific task. …
  • Departmentalization and compartments. …
  • Formalization of elements. …
  • Centralization and decentralization. …
  • Span of control. …
  • Chain of command.

What are the elements of organizational design and structure?

Five elements create an organizational structure: job design, departmentation, delegation, span of control and chain of command. These elements comprise an organizational chart and create the organizational structure itself.

What are the 4 types of organizational design?

The four types of organizational structures are functional, divisional, flatarchy, and matrix structures.

What are the basic elements of an organization?

Basic Elements of Organizational Structure Design
  • Work specialization.
  • Departmentation.
  • Chain of command.
  • Span of control.
  • Centralization/Decentralization.
  • Formalization.

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