Organizational Design – The process whereby managers find the combination of company structure and control devices that they believe will permit the company to produce and sustain a competitive advantage.

Coordinate and motivate personnel

To create valueand

Get yourself a competitive advantage

Koontz and O'Donnell The procedure School of Management



Staffing needs



Building blocks of organizational framework


Straight – simply how much authority to delegate

Horizontally – tips on how to divide people

Into functions and divisions

Incorporation – synchronize people and functions

To accomplish organizational desired goals and tasks

Tall framework (7 – 10 levels)

Flat framework (2 – 4 levels)

Tall Composition Problems


Information bias


Lots of middle managers

McKinsey Consulting Company

Elevated height of company organization structures

Presidents Office Director of each section

Centralization or Decentralization (tending toward)


1 . Assign decision making specialist to central and lower level managers 2 . Adapt to community conditions. Helps bring about flexibility

3. Fewer managers needed


1 . Facilitates coordination and planning

installment payments on your Decisions suit broad organizational objectives

Administration Policy – Guidelines pertaining to decision making are created at top levels

And passed down to lower levels

Horizontally Differentiation – How to group tasks and activities to meet strategies

Functional Structure – Grouping simply by expertise. Most U. S i9000. firms possess a functional structure


Good place to learn

Easy to control

Powerful and effective


Geographical diversion causes duplication of men and women and costs

Communication concerns

Measurement problems

Location problems

Strategic complications

Product Composition – Group by product line.

Product Group structure



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