Vi) Formalisation

. Formalisation refers to the extent to which jobs within the organisation are standardised. If a job is highly formalised and standardised, staff have little discretion over what is to be done, what it is to be done, and how it is done. There are explicit job descriptions, lots of organizational rules and clearly defined procedures. When formalisation is low, on the other hand, staff have a great deal of freedom to exercise discretion.

Question: to what degree will there be rules and regulations?

Six key questions for designing organisational structure

. To what degree can tasks be subdivided into separate jobs? (work specialization)

. On what basis will jobs be grouped together? (departmentalisation)

. To whom do individuals and groups report? (chain of command)

. How many individuals can a manager efficiently and effectively direct? (span of control)

. Where does decision-making authority lie? (centralization and decentralization)

. To what degree will the rules and regulations be used to direct staff? (formalization)

. Organisational structures can be categorised as 6 basic types

i) simple structure

ii) bureaucracy

iii) matrix structure

iv) team

v) virtual/networked

vi) boundary-less

Two examples of the 6 elements, ie mechanistic and organic

organisational development change management

Six Basic Types of Organisational Structures

. The range of organisational structures includes simple structure, bureaucracy, matrix structure, team, virtual/networked structure and boundary‐less. The first 3 are the traditional and most common forms of organisational structure, while the latter 3 are relatively new.

1. Simple structure

organisational development change management

. This is characterised by a low degree of departmentalisation, wider span of control, authority centralised in a single person and little formalisation. It is a flat organisational structure with two or three vertical lines, a loose body of employees, and one individual in whom the decision-making authority is centralised.

. This structure is most common in small businesses in which the manager and the owner are one and the same.

. The strength of the structure lies in its simplicity, as it is fast, flexible, inexpensive to maintain, and accountability is clear.

. Its major weakness is that the structure becomes increasingly inadequate as an organisation expands, owing to information and responsibility overload at the top. As size increases, decision-making becomes slower and slower. The other weakness is that the risk level is high when everything depends upon one person.


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