1. Organizational Design
Eng. Hafiz Salman Shareef

2. Organizational Design
The manner in which
a management achieves the right
combination of differentiation and integration of
the organization's operations to meet required
goals or tasks.

3. Elements in Organizational Design
Six Key Elements in Elements in
Organizational Design
 Work Specialization
 Departmentalization
 Chain of command
 Span of Control
 Centralization and Decentralization
 Formalization

4. Work Specialization
Describes the degree to which tasks in an
organization are divided into separate jobs. The
main idea of this organizational design is that an
entire job is not done by one individual. It is
broken down into steps, and a different person
completes each step. Individual employees
specialize in doing part of an activity rather than
the entire activity.

5. Departmentalization
It is the basis by which jobs are grouped together.
For instance every organization has its own
specific way of classifying and grouping work
activities.

6. Departmentalization
There are five common forms of
departmentalization
 Functional Departmentalization
 Product Departmentalization
 Geographical Departmentalization
 Process Departmentalization
 Customer Departmentalization

7. Functional Departmentalization
It groups jobs by functions performed. It can be
used in all kinds of organizations; it depends on
the goals each of them wants to achieve.

8. Functional Departmentalization
Different aspects on this type of
departmentalization
Positive Aspects:
 Efficiencies from putting together similar specialties
and people with common skills, knowledge, and
orientations
 Coordination within functional area
 In-depth specialization
Negative Aspects:
 Poor communication across functional areas
 Limited view of organizational goals

9. Product Departmentalization
It groups jobs by product line. Each manager is
responsible of an area within the organization
depending of his/her specialization

10. Product Departmentalization
Different aspects on this type of
departmentalization
Positive Aspects:
 Allows specialization in particular products and
services
 Managers can become experts in their industry
 Closer to customers
Negative Aspects:
 Duplication of functions
 Limited view of organizational goals

11. Geographical Departmentalization
It groups jobs on the basis of territory or
geography.

12. Geographical Departmentalization
Different aspects on this type of
departmentalization
Positive Aspects:
 More effective and efficient handling of specific
regional issues that arise
 Serve needs of unique geographic markets better
Negative Aspects:
 Duplication of functions
 Can feel isolated from other organizational areas

13. Process Departmentalization
It groups on the basis of product or customer
flow.

14. Process Departmentalization
Different aspects on this type of
departmentalization
Positive Aspects:
 More efficient flow of work activities
Negative Aspects:
 Can only be used with certain types of products

15. Customer Departmentalization
It groups jobs on the basis of common
customers

16. Customer Departmentalization
Different aspects on this type of
departmentalization
Positive Aspects:
 Customers' needs and problems can be met by
specialists
Negative Aspects:
 Duplication of functions
 Limited view of organizational goals

17. Chain of Command
It is defined as a continuous line of authority
that extends from upper organizational levels
to the lowest levels and clarifies who reports
to whom.
There are three important concepts attached
to this theory:
 Authority
 Responsibility
 Unity of command

18. Span of Control
It is important to a large degree because it
determines the number of levels and managers
an organization has. Also, determines the number
of employees a manager can efficiently and
effectively manage.

19. Centralization and
Decentralization
Centralization:
It is the process by which the activities of an
organization, particularly those regarding
planning and decision-making, become
concentrated within a particular location or group.

20. Centralization and
Decentralization
Decentralization:
It is the process of dispersing decision-
making governance closer to the people or
citizens. It includes the dispersal of administration
or governance in sectors or areas
like engineering, management science, political
science, political
economy, sociology and economics.

21. More Centralization
 Environment is stable
 Lower-level managers are not as capable or
experienced at making decisions as upper-
level managers.
 Lower-level managers do not want to have
say in decisions
 Decisions are significant.
 Company is large.
 Effective implementation of company
strategies depends on managers retaining
say over what happens.

22. More Decentralization
 Environment is complex, uncertain.
 Lower-level managers are capable and
experienced at making decisions.
 Lower-level managers want a voice in decisions.
 Decisions are relatively minor.
 Corporate culture is open to allowing managers to
have a say in what happens.
 Company is geographically dispersed.
 Effective implementation of company strategies
depends on managers having involvement and
flexibility to make decisions

23. Formalization
It refers to the degree to which jobs within the
organization are standardized and the extent to
which employee behavior is guided by rules and
procedures.

24. Thank You