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Organizational Structure and its Components

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What is meant by "organizational structure"? What are the components of organizational structure?

Does Industrial Services of America, Inc.'s organizational structure fit or follow from its strategy? Is it important that an organization's structure follow from its strategy? In the case of Industrial Services of America, Inc. are strategy and structure aligned? Can you think of examples of organizations in which the strategy follows from the structure?

What is the situation in an organization like the military (Army)?

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Solution Summary

Organizational structure and its components are examined. The situation in an organization like the military (Army) is analyzed.

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Organizational structure and its components:

Organizational structure is the manner in which an organization arranges its job roles, functions and workforce so that work can be systematically and efficiently performed and the goals of the organization met. It envisages the rules and policies that enable an organization to arrange its chain of communication and command while allocating various responsibilities and rights. The responsibilities of employees in an organization are often defined by what they do and who they report to (Ferguson, 2010).

The components of an organizational structure are mainly six: centralization and decentralization, formalization, and work specialization, departmentalization, chain of command, and span of control. Centralization in an organization's structure refers to the extent in which various responsibilities, lines of authority and activities are differentiated. A centralized organizational structure are one in which decisions are made by the central authority with little inputs from other subordinates while a decentralized one employees also have the power and right to make decisions thereby not making the decision making process fast. Formalization of the organizational structure refers to the extent to which management and employees in an organization follow the regulations and rules put down by the organization (Ferguson, 2010; Besanko, Dranove Shanley & Schaefer, 2003).

Span of control on the other hand implies to the extent of control that each role or task in the structure can handle. For instance, the number of employees that a manager can effectively and efficiently handle. Chain of command on the other had involves the hierarchy from the top level management of the company to the low levels in the company with respect to who is reported to by each employee. In this it often entails the authority and responsibilities that each individual in an organization has. Departmentalization mainly concerns dividing tasks and jobs in the organization through work specialization where people performing similar tasks functions and jobs are grouped together so that common tasks and ...

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