Elements Of Organizational Structure Business Essay


The organizational structure creates a framework through which activities can be managed to accomplish organizational goals and objectives. Or in other words, a formal system of tasks and reporting relationships that coordinates and motivates organizational members, so that they work together to achieve organizational goals.

According to Peter Ferdinand Drucker, "good organization structure does not by itself produce good performance. But a poor organization structure makes good performance is impossible, no matter how good the individual managers may be"

As for the above statement it is clear that there is no perfect organizational structure. This may vary according to the size, nature of business and other influencing factors.

International Software Company is a multi national software company operating in many parts of the world. Therefore they have adopted a blender of both functional structure and geographical structure styles.

Mean while cyber concepts (pvt) ltd has its operations only limited to Sri Lanka follows a functional organizational structure.

Elements of organizational structure.

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Even though the organizational structures of two different companies belong to the same type of organizational structure there is less possibility that everything being similar in terms of organizational structure, the elements of the structure should be consider.

Work specialization; -

Breaking a total work down into small, simple, separate operations in which each worker could specialize is known as division of work. Allowing one employee to repetitively perform such a simple task for long is known as specialization.

Departmentalization; -

Departmentalization is the process of grouping jobs together so that common tasks can easily be coordinated.

Chain of command; -

Chain of command is the unbroken line of authority that extends from the top of the organization to the lowest level and clarifies who reports to whome.

Span of control:-

Span of management is the number of subordinates reporting directly to a given manager.

Delegation of authority;-

The act of assigning formal authority and responsibility for completion of specific activities to subordinates.

Formalization; -

The degree to which jobs within the organization are standardized.

Coordination; -

Coordination is the process of integrating the different objectives and activities of different departments and people so that the common objective of the organization can be achieved.

These above mentioned elements vary from organization to organization. this make a significant change in their organizational structure.

Structure element.

International software company

Cyber concepts (pvt) ltd

Work specialization

The projects are relatively big therefore the specialization is relatively high

Relative low specialization. But there is a moderate level of specialization.


Departmentalization is done according to geographical base.

Only uses 3 departments.

(Customer service, infrastructure and software support and development) departmentalized according to the functional base.

Chain of command

Authority can be seen at each level and moreover there is a certain degree of power within the regional heads and the director board.

There is no much of authority delegated but there is high responsibility to the workers.

The chairman only has the power to influence others.

Span of control

As this company deals with big software projects. There is a wide span of control.

Relatively narrow span of control depending on the project.


There is a high degree of formalization

There is a high degree of formalization


Lesser coordination between the top level and lower level. This is because the organization size is big.

Good coordination with in the organization.

Organizational culture.

Org culture is "the set of shared, taken-for-granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various elements" - organizational behaviour.

Organizational culture is all about how things are done within a company. culture reflects the values shared among org members. These values tend to persist over time and are more resistant to change.

A useful module for observing and interpreting org culture was developed by a Harvard research. Four general manifestations or evidence of organizational culture in his module are shared things (objects) shared sayings (talk) shared goings (behaviour) and shared feelings (emotions).

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3 prospective have been proposed to explain the types of culture that enhance an organizations economic performance.

The strength perspective predicts a significant relationship between strength of corporate culture and long term financial performance. The idea is that strong culture creates goal alignment, employee motivation and needed structure and controls to improve org performance.

The fit perspective is based on the premise that an organizations culture must align with its business or strategic context. Accordingly there is no one best culture. A culture is predicted to facilitate economic performance on if it "fits" its context.

The adaptive perspective assumes that good culture help org anticipate and adopt to environmental changes. This proactive adaptability is expected to enhance long term financial performance.

Handy's types of organizational culture.

Handy suggests that we can categorize organizations into a broad range of four cultures. The foundation of 'culture' will vary upon the factors including company history, ownership, organisation structure, technology, critical business incidents and environment, etc.

The four cultures he discourses are Power', 'Role', 'Task' and 'People'.

Power culture; -

Power culture is a situation where the power of the organization is centralized in we hands. They are the people who are responsible for all the decision making and directing the work of other members. According to Handy power culture is a web where the power is concentrated highly on the middle.

Role culture; -

The authority of position power is legitimate. Personal power is not. This reflects Weber's pure theory of bureaucracy. The position plays an important role.

According to Handy role culture is considered as a Greek temple. Where the apex of the temple is responsible in decision making.

Task culture: -

This is where information and expertise are the skills that are of value. Hendy describes task culture using a latticework. Where the individual expertise taken into consideration.

Person culture; -

This is feature of the consensus model of management, where the individuals within the structure control together the path which the organisation follows. If there is a formalized structure, it tends to service the needs of the individuals within the structure.

Handy describes the person culture using a cluster.

How cultures are embedded In organization.

An orgs initial culture is an outgrowth of the founders philosophy. If the founder is an achievement oriented individual driven by success. Overtime, the riginal culture is either embedded as is or modified to fit the current environment situation,

The formal statement of org philosophy, mission, vision, values and materials used for recruiting, selecting

The design of physical space, work environment and building.

Slogans, language, and sayings

Deliberate role modeling, training programs, teaching and coaching by managers and supervisors.

Explicit rewards, status symbols and promotions criteria

Stories, legends and myths about key people and events.

Organizational structure and culture.

Accordingly there is a relationship between organizational structure and culture. When we talk about international software company. It is a large-scale company operating in many different locations. Due to its large nature we can experience a task culture situation. International Software Company highly deals with large-scale projects where the individuals have their own responsibility. This because there is a wide span of control and tall structure nature of the organization. These reasons have paved the way for task culture situation with in the organization. The power and authority is delegated with the organization in order to have smooth functioning.

On the same hand, if we talk about cyber concepts pvt (ltd). It is a medium scale company whose operations are only limited to sri lanka. When we consider about the span of control, there is a narrow span of control. And the organization structure is flatter. These features have enabled a power culture situation. Where the chairman of the company has the sole power over the operations of the organization. He him self takes all the decisions. This is due to the scope of the organization.

Section 2


Through out the history, it has been recognized that the success of an organization or any group within the organization depends largely on the quality of its leadership. Successful leaders envision the future, anticipate change, exploit opportunities, motivate their followers to higher level of productivity, correct poor performance, and lead the organization towards objectives.

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Though it is a fact that leadership tremendously influences the human behaviour it's inner working and specific dimensions cannot be precisely spelt out. However, almost all the established theories of the leadership continue to provide an understanding about process of leading as a foundation for the practice of effective leadership in today's organizations.

According to Mescrn, Albert and Khedoum Leadership is "the ability to influence individual and groups to work toward attaining organizational objective"

James Arthur Finch Stoner, R. Edward Freeman, Daniel R. Gilbert (1995) stated leadership is "the process of directing and influencing the task-related activities of groupmenbers"

A person's leadership style is the pattern of behaviour they exhibit in carrying out a leadership role. Behavioral scientists have taken basic approaches to understand leadership in organization context. The trait approach, the behavioral and the contingency approach of leadership has paved the way for understanding leadership styles.

According to trait approach successful depends on personal characteristics of the person holding leadership position. Due to its limitations behavioral approach was developed. According to behavioral approach leaders functions and styles plays an important role in determining efficient leaders. The difficulty od isolating universally effective leadership traits or behaviors has caused researches to try to determine the situational variables that will cause one leadership style to be more effective than another. The contingency approach to leadership attempts to identify which situational factors are important and predict which leadership style will be more effective in a given situation.

Beside the above discussed theories, a number of have emerged in recent years; charismatic , social learning and transformative leadership approaches

Leadership styles.

All these above discussed approaches of leadership paved the way for development of leadership styles. Styles such as

Task oriented style; -

This type of leaders highly concentrates on the task rather than employee well being. They govern through rules and maintaining standards. The organization can ensure its deadlines are met and their resources are efficiently used.

Employee-oriented style:-

On the other hand there are some leaders who have more concern toward the employee well being. They believe that if the employees are supported it will enhance team building and contributes towards productivity.

Transactional Leadership;-

This is a leadership style, which concentrates on short-term tasks. The transaction usually paying team members in return to their efforts. And more over these type of leaders judge employees through their performance.

Autocratic Leadership; -

This is an extreme form of transactional leadership. Where the leaders have power to exert influence over its people.

Bureaucratic Leadership; -

Bureaucratic leaders works according to the book. They follow rules rigorously, and ensure that their subordinates follow them precisely.

Democratic/Participative Leadership: -

Democratic leaders include their team members in decision-making process. They support creativity, and team members are often highly occupied in projects and decisions.

Laissez-Faire Leadership; -

These leaders give total freedom to their subordinates to work. They guide the team with resources and advice, if needed, but otherwise don't get involved.

Transformational Leadership.

They encouraging because they expect the best from everyone on their team as well as themselves. This enables to high productivity and engagement from everyone in their team.

Every organization has their unique blender of leadership styles. As such when we consider about international software company. We can assume their top management uses a blend of transactional and laissez-faire leadership style. As it is a big company having other leadership style is not possible. Because the number of employees is big and its operation is spread through out the world. Their top level is only concentrating on a team till they engage in a project and the employees are given freedom to do their work. More over the employees are paid according to their performance and the efforts they put into work.

And when we talk about cyber concepts (pvt) ltd. there is limited number of workers, which is relatively low. The chairman monitors all the employees. Therefore there is more like to be a blend of task oriented culture and Bureaucratic Leadership. The chairman will be highly concentrating on the tasks and deadlines to a great deal. And the organization is driven by rules and norms.

Section 3.

Motivational theories.

We might define motivation in terms of some outward behaviour. People who are motivated exert a greater effort to perform than those who are not motivated how ever such a definition is relative and tells us little. A more descriptive but less substantive definition would say that motivation is the willingness to do something, and is considered by this action's ability to satisfy some need for the individual. A need, means a physiological or psychological deficiency that makes certain outcomes appear attractive

Theories that talk about motivation.

The content theories explains - what motivates people? Greater emphasis is placed on the characteristics of the people.

Maslow's need hierarchy theory.

Alderfer's ERG theory.

Herzberg's Two-factor theory.

McClelland's Three Need theory.

Process theories address how does the individual motivation occurs.

Expectancy theory of victor vroom.

Equity theory of Stacy Adams.

Reinforcement theory of B.F.Skinner.

Goal setting theory- Edwin A.LockeHierarchy of need theory.

It's probably safe to say that the best known theory of motivation is Abraham Maslow's hierarchy of needs. He hypothesized that within every human being there exists a hierarchy of five needs. These are

As each of these needs becomes substantially satisfied, the next need becomes dominant. In terms of hierarchy diagram, the individual moves up the hierarchy. From standpoint of motivation, Maslow's theory would say that although no need is ever fully gratified, a substantially satisfied need no longer motivates.

Maslow separated the five needs into higher and lower order of needs. Physiological and safety needs were described as lower order; social, esteem and self actualization were categorized as higher order needs. The differentiation between two order was made on the premise that higher order needs are satisfied internally, whereas lower order needs are predominantly satisfied externally.

Maslow's need theory has received wide recognition, particularly among practicing managers. This can be attributed to the logic and ease with which the theory is intuitively understood.

Herzberg's Two-factor theory.

McClelland's Three Need theory.

Need for Achievement.

Trying to achieve higher targets and accept any challenge or risk. Trying to be successful in a competitive environment.

Need for Affiliation.

Always trying to have relationships with other people.

Need for power.

Always trying to earn power and influence others

The Expectancy Theory - victor vroom

This theory emphasizes that the effort and motivation is basically determined on expectation of reward or attainable success.

Equity theory of Stacy Adams.

This theory emphasizes that employees examine that equity of their return for the commitment they have done through comparing the return, which has been received to other who are in the same category for the same commitment.

Reinforcement theory of B.F. Skinner.

This theory explains how the consequence of the previous experience affect as a learning process to the actions in future.

Goal Setting theory - Edwin A.Locke.

This theory explains that the employees will be motivated when management gives fair and attainable targets to them.

Motivational theory at cyber concepts pvt (ltd)

cyber concepts pvt (ltd) has much concern towards motivation of their employees. It is because it is a software developing company where the employees' creativity and effort is significant. They believe that if the employees are well paid and benefited to the work they perform the employees will be motivated. And more over they consider employee's performance as the measuring tool.

Therefor cyber concepts pvt (ltd) can use Herzberg two factor theory as the motivational tool, to motivate the employees with in the organization. Herzberg argued that opposition of satisfaction is not dissatisfaction but no satisfaction. The two factors what Herzberg talks about is Hygiene factors and Motivators. To motivate a group of executives through using two-factor theory, the practitioners are able to follow following steps.

Conduct a need survey and identify the level of satisfaction and dissatisfaction.

If the particular employees are dissatisfied about the hygiene factors. First provide them those hygiene factors to remove dissatisfaction.

After that motivate them by providing motivators.


the manager of


Peter Ferdinand Drucker (2001). "The Essential Drucker". -: -. -.

Michael H. Mescon, Michael Albert, Franklin Khedouri (1988). -. 3rd ed. -: Harpercollins College Div; 3 Sub edition. -.

James Arthur Finch Stoner, R. Edward Freeman, Daniel R. Gilbert (1995). Management. -: Prentice-Hall International. -.

- (-). organizational behaviour. 4th ed. uk: -. page 60.