Organizational Structure: Key Elements & Influencing Factors

Organizational Structure refers to the established relationships and processes of the organization.

Organizational Structure is the formal arrangement of jobs in an organization.

The organizational structure which is the "anatomy" or a framework of an organization focuses on different positions, formulations of rules and procedures, and prescriptions of authority and explains the method of grouping and coordination of the works.

Factors influencing Structure of the organization

• Strategy
• Size
• Technology
• Environment: Internal and external environment

Key Elements of Organizational Structure:

The following are the key elements of organizational structure, i.e. a structure of an organization is incomplete without having these elements:

1. Work specialization: The degree to which tasks in the organization are subdivided into separate jobs
2. Departmentalization: The basis by which jobs are grouped together. Activities are grouped by (a) Function (b) Product (c) Geography (d) Process (e) Customer (f) Authority
3. Chain of command: The unbroken line of authority that extends from the top of the organization to the lowest level and clarifies who reports to whom.
4. Span of control: It is the volume of interpersonal relationships that a single manager can handle.
5. Centralization and decentralization: Centralization is the degree to which decision making is concentrated at a single point in the organization and Decentralization is the degree to which decision making is spread throughout the organization.
6. Formalization: The degree to which jobs within the organization are standardized. It is the extent to which expectations regarding the means and ends of work are specified and written down.