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Elements of Organizational Structure

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Reporting Lines

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Reporting Lines are the formal line of authority, communication, and responsibility within an organization. Example: An employee in the marketing department reports to the marketing manager, who in turn reports to the vice president of marketing.

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Span of Control

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Span of Control describes the number of subordinates a supervisor or manager can effectively manage. Example: A manager overseeing four departments with ten employees each.

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Organizational Culture

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Organizational Culture encompasses values and behaviors that contribute to the unique social and psychological environment of an organization. Example: A tech startup with a casual dress code and a flat hierarchy that encourages innovation.

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Command

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Command refers to the authority to make decisions and the responsibility to oversee organizational resources and activities. Example: A military officer has command over their assigned troops.

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Authority

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Authority is the power or right to give orders, make decisions, and enforce obedience. Example: A department head has the authority to make staffing decisions within their department.

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Responsibility

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Responsibility is the obligation to perform assigned tasks, roles, or duties. Example: A safety officer is responsible for ensuring all employees follow health and safety regulations.

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Functional Structure

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Functional Structure divides the company based on specialization, with different business areas such as marketing, finance, and sales. Example: A corporation where each department focuses exclusively on its specific function.

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Flat Structure

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Flat Structure, also known as horizontal structure, has few or no levels of middle management between staff and executives. Example: A startup company where the CEO works directly with all employees.

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Coordination

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Coordination is the process of organizing people or groups so that they work together properly and well. Example: A project manager ensuring all teams are working towards the same deadlines.

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Unity of Command

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Unity of Command principle states that each employee should receive orders from only one superior and answer to only that person. Example: An accountant in a company reporting solely to the financial manager.

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Hierarchy

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Hierarchy refers to a system where members of an organization are ranked according to the level of their power. Example: A company where the structure flows from CEO to managers to staff.

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Accountability

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Accountability is being held answerable for accomplishing a goal or assignment. Example: A project leader is accountable for the completion of a project on time and within budget.

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Organizational Design

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Organizational Design is the process of structuring an organization's strategy, culture, roles, and systems to achieve its goals. Example: A business redesigns its structure to focus more on customer service.

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Task Specialization

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Task Specialization is the degree to which organizational tasks are separated and assigned to different workers. Example: In a restaurant, chefs specialize in cooking while waiters specialize in serving customers.

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Line-and-Staff Structure

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Line-and-Staff Structure is made up of direct (line) personnel and indirect (staff) support personnel. Example: Line workers handle core business tasks while staff provides specialized, advisory support services.

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Organizational Chart

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An Organizational Chart is a diagram that shows the structure of an organization and the relationships and relative ranks of its parts and positions/jobs. Example: A visual chart displaying the CEO at the top, followed by directors, managers, and then staff.

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Bureaucracy

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Bureaucracy is a system of administration characterized by strict policies, procedures, and a clear hierarchy. Example: Government agencies are often bureaucratic, with many layers of management.

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Adhocracy

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Adhocracy is an organizational structure characterized by flexibility, employee empowerment, and an emphasis on individual initiative. Example: A creative agency that allows teams to form and disband as needed for projects.

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Role

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A Role is a set of expected behavior patterns attributed to someone occupying a given position in a social unit. Example: A sales manager's role might include responsibilities such as supervising the sales team and developing sales strategies.

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Departmentalization

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Departmentalization refers to the process of dividing an organization into different departments, which perform specific tasks or roles. Example: A company split into sales, marketing, finance, and HR departments.

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Standardization

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Standardization is the process of making certain that every task or procedure is performed identically and to set specifications. Example: The ISO 9001 standard ensures that companies follow consistent quality management practices.

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Formalization

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Formalization is the extent to which policies, procedures, job descriptions, and rules are written and explicitly articulated. Example: A company handbook with detailed job descriptions and company policies.

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Decentralization

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Decentralization refers to the distribution of decision-making governance closer to the people or positions affected by the decisions. Example: Each department has the power to make its own purchasing decisions.

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Chain of Command

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Chain of Command is a system where authority passes down from the top through a series of executive positions or military ranks where each person is accountable to the one directly superior. Example: In a company, an employee reports to a supervisor who in turn reports to a manager.

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Centralization

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Centralization is the degree to which decision-making authority is concentrated at higher levels in an organization. Example: A corporation where all major decisions are made by the headquarters.

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Organizational Environment

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Organizational Environment consists of both external and internal factors that influence the functioning and performance of an organization. Example: Economic conditions, competitors, and regulations are part of an organization's external environment.

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Matrix Structure

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Matrix Structure is an organizational structure that shares resources across both functional and product-based divisions. Example: A company where employees have dual reporting relationships - typically to both a functional manager and a product manager.

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Delegation

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Delegation is the assignment of authority and responsibility to another person to carry out specific activities. Example: A manager delegates the task of compiling the weekly sales report to an assistant.

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Complexity

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Complexity in an organizational structure refers to the number of distinct tasks, processes, or roles within the organization. Example: A multinational company with various departments dealing with distinct markets and products.

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Division of Labor

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Division of Labor is the separation of tasks in an organization so that individuals can specialize. Example: In a car factory, one team works on the engine while another works on the body.

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