Organization Structure and Effectiveness

An organization is a cooperative social system of two or more people with a common purpose.

Common Characteristics of Organizations

Coordination of effort: Multiplying individual contributions to achieve results greater than those possible by individuals working alone

Common goal or purpose: Having a focus to strive for something of mutual interest

Division of labor: Dividing tasks into specialized jobs that use human resources efficiently

Hierarchy of authority: Using a chain of command to control and direct the actions of others

Organization Charts

Organization Chart (Table): A visual display of an organization’s positions and lines of authority that is useful as a blueprint for deploying human resources

Vertical and Horizontal Dimensions: Vertical hierarchy establishes the chain of command. Horizontal specialization denotes the division of labor.

Line and Staff Positions: Line managers make decisions and staff personnel provide advice and support. Personal staff are assigned to a specific manager in supporting roles.

A Simplified Sample Organization Chart

Organizations as Open Systems

Characteristics of Open Systems

Interaction with the external environment through permeable boundaries. An open-system model encourages managers to think about the organization’s life-support system

Interacting organizational subsystems:

Technical (production function) subsystems define the organization’s transformation process. Boundary-spanning subsystems provide the organization’s interface with the external environment. Managerial subsystems bridge (control and direct) the technical and boundary-spanning subsystems.

Open-System Model of a Business