IOP2602 – Organisational Psychology
LEARNING UNIT 8: Foundations of organisation structure (CHAPTER 9)
2. What is Organisation Structure
Organisational Structure The way in which job tasks are formally divided, grouped and coordinated.
Organisational structure defines how job tasks are formally divided, grouped and coordinated. The way in which
job tasks are formally divided, grouped and coordinated, depends on the degree of complexity, formalisation and
centralisation. Managers need to consider the following six key elements when designing their organisation’s
structure:
1. Work specialisation (To what degree are activities subdivided into separate jobs?)
• Sees the job broken down into a number of steps, each step being completed by a separate individual.
• Therefore, individuals specialise in doing part of an activity rather than the entire activity.
2. Departmentalisation (On what basis will jobs be grouped together?)
• Sees jobs grouped together.
• One of the most popular ways to group activities is by functions performed.
3. Chain of command (To whom do individuals and groups report?)
• An unbroken line of authority that extends from the top of the organisation to the lowest echelon and
clarifies who reports to whom.
• It answers questions for employers such as “to whom do I go if I have a problem” and “to whom am I
responsible?”
4. Span of control (How many individuals can a manager efficiently and effectively direct?)
• It determines the number of levels & managers an organisation has.
• All things being equal, the wider or larger the span, the more efficient the organisation.
5. Centralisation and decentralisation (Where do decision-making authority lie?)
• Centralisation refers to the degree to which decision making is concentrated at a single point in the
organisation.
Lyana Petzer Page 1 of 6
, IOP2602 – Organisational Psychology
• The concept includes only formal authority, that is, like rights inherent in one’s position. It is said that if top
management makes the organisations key decisions with little or no input from lower-level personnel, then
the organisation is centralised.
• Decentralised organisation, action can be taken more quickly to solve problems, more people provide input
into decisions, and employers are likely to feel alienated from those who make decisions that affect their
work lives.
FROM CONCEPT TO SKILLS: Delegating authority
If you are a manager and want to delegate some of your authority to someone else (i.e. a delegatee), how do
you go about it? The following summarises the primary step: you need to take:
1. Clarify the assignment: You need to determine what is to be delegated and to whom. You need to
identify the person most capable of doing the task then, determine if or she
has the time and motivation to do the task. Your responsibility to provide
clear information on what is being delegated, the results you expect and
your time or performance expectations.
2. Specify the delegatee's Every act of delegation comes with constraints. You are delegating authority
range of discretion: to act on certain issues and, on those issues only, within certain parameters.
You need to specify what those parameters are so that the individual
knows, in no uncertain terms, the range of his or her discretion.
3. Allow the delegatee to One of the best sources for determining how much authority will be
participate: necessary to accomplish a task is the person who will be held accountable
for that task. If you allow employees to participate in determining what is
delegated, how much authority is needed to get the job done and the
standards by which they will be judged, you increase employees'
motivation, satisfaction and accountability for performance.
4. Inform others that Delegation should not take place in a vacuum. Not only do you and the
delegation has occurred: delegatee need to know specifically what has been delegated and how
much authority has been granted, but anyone else who may be affected by
the delegation act also needs to be informed.
5. Establish feedback controls: The establishment of controls to monitor the delegatee and the employees
reporting to this person's progress, increase the likelihood that inefficiencies
will be identified early and that the task will be completed on time and to
the desired specifications. For instance, agree on a specific time for
completion of the task, and then set progress dates or milestones when the
employee will report back on how well he or she is doing and any major
problems that have surfaced.
6. Formalisation (To what degree will there be rules and regulations to direct employees and managers?)
• The degree to which jobs within the organisation are standardised if job is highly formalised, then the job
incumbent has a minimum amount of discretion over what is to be done, when it is to be done and how
he/she should do it.
3. Common Organisation Designs
1. The Simple Structure
• This structure is characterised by a low degree of departmentalisation, wide spans of control, authority
centralised in a single person, and little formalisation.
• Strength: Lies in its simplicity. It is fast, flexible and easy to maintain, and accountability is clear.
• Weakness: It is difficult to maintain anywhere other than in small organisations
Lyana Petzer Page 2 of 6
LEARNING UNIT 8: Foundations of organisation structure (CHAPTER 9)
2. What is Organisation Structure
Organisational Structure The way in which job tasks are formally divided, grouped and coordinated.
Organisational structure defines how job tasks are formally divided, grouped and coordinated. The way in which
job tasks are formally divided, grouped and coordinated, depends on the degree of complexity, formalisation and
centralisation. Managers need to consider the following six key elements when designing their organisation’s
structure:
1. Work specialisation (To what degree are activities subdivided into separate jobs?)
• Sees the job broken down into a number of steps, each step being completed by a separate individual.
• Therefore, individuals specialise in doing part of an activity rather than the entire activity.
2. Departmentalisation (On what basis will jobs be grouped together?)
• Sees jobs grouped together.
• One of the most popular ways to group activities is by functions performed.
3. Chain of command (To whom do individuals and groups report?)
• An unbroken line of authority that extends from the top of the organisation to the lowest echelon and
clarifies who reports to whom.
• It answers questions for employers such as “to whom do I go if I have a problem” and “to whom am I
responsible?”
4. Span of control (How many individuals can a manager efficiently and effectively direct?)
• It determines the number of levels & managers an organisation has.
• All things being equal, the wider or larger the span, the more efficient the organisation.
5. Centralisation and decentralisation (Where do decision-making authority lie?)
• Centralisation refers to the degree to which decision making is concentrated at a single point in the
organisation.
Lyana Petzer Page 1 of 6
, IOP2602 – Organisational Psychology
• The concept includes only formal authority, that is, like rights inherent in one’s position. It is said that if top
management makes the organisations key decisions with little or no input from lower-level personnel, then
the organisation is centralised.
• Decentralised organisation, action can be taken more quickly to solve problems, more people provide input
into decisions, and employers are likely to feel alienated from those who make decisions that affect their
work lives.
FROM CONCEPT TO SKILLS: Delegating authority
If you are a manager and want to delegate some of your authority to someone else (i.e. a delegatee), how do
you go about it? The following summarises the primary step: you need to take:
1. Clarify the assignment: You need to determine what is to be delegated and to whom. You need to
identify the person most capable of doing the task then, determine if or she
has the time and motivation to do the task. Your responsibility to provide
clear information on what is being delegated, the results you expect and
your time or performance expectations.
2. Specify the delegatee's Every act of delegation comes with constraints. You are delegating authority
range of discretion: to act on certain issues and, on those issues only, within certain parameters.
You need to specify what those parameters are so that the individual
knows, in no uncertain terms, the range of his or her discretion.
3. Allow the delegatee to One of the best sources for determining how much authority will be
participate: necessary to accomplish a task is the person who will be held accountable
for that task. If you allow employees to participate in determining what is
delegated, how much authority is needed to get the job done and the
standards by which they will be judged, you increase employees'
motivation, satisfaction and accountability for performance.
4. Inform others that Delegation should not take place in a vacuum. Not only do you and the
delegation has occurred: delegatee need to know specifically what has been delegated and how
much authority has been granted, but anyone else who may be affected by
the delegation act also needs to be informed.
5. Establish feedback controls: The establishment of controls to monitor the delegatee and the employees
reporting to this person's progress, increase the likelihood that inefficiencies
will be identified early and that the task will be completed on time and to
the desired specifications. For instance, agree on a specific time for
completion of the task, and then set progress dates or milestones when the
employee will report back on how well he or she is doing and any major
problems that have surfaced.
6. Formalisation (To what degree will there be rules and regulations to direct employees and managers?)
• The degree to which jobs within the organisation are standardised if job is highly formalised, then the job
incumbent has a minimum amount of discretion over what is to be done, when it is to be done and how
he/she should do it.
3. Common Organisation Designs
1. The Simple Structure
• This structure is characterised by a low degree of departmentalisation, wide spans of control, authority
centralised in a single person, and little formalisation.
• Strength: Lies in its simplicity. It is fast, flexible and easy to maintain, and accountability is clear.
• Weakness: It is difficult to maintain anywhere other than in small organisations
Lyana Petzer Page 2 of 6
