Chapter 3: Fundamentals of Organizational Structure
There are three key components in the definition of organizational structure
Designates formal reporting relationships, including number of levels and span of control
Identifies the grouping together of individuals into departments
Design of systems to ensure effective communication, coordination, and integration of efforts
The first two are the structural framework, which is vertical hierarchy.
The third element pertains to the pattern of interactions among organizational employees.
Information-Processing Perspective on Structure
The organization should be designed to provide both vertical and horizontal information flow as necessary to
accomplish the organizations overall goals.
If the structure does not fit the information requirements of the
organization, people will either have little information or will spend time processing information that is not vital
to their tasks.
Vertical linkages are designed primarily for control; horizontal linkages are designed for coordination and
Organizational can choose whether to emphasize vertical communication and control, or toward a contemporary
learning organization, which emphasizes horizontal communication and coordination. An emphasis on
efficiency and control is associated with specialized tasks, a strict hierarchy of authority and rules, vertical
reporting systems, few teams or task forces, and centralized decision making, which means problems and
decisions are funneled to top levels of the hierarchy for resolutions. Emphasis on learning is associated with
shared tasks, a horizontal hierarchy, few rules, face-to-face communication, many teams and task forces, and
informal, decentralized decision making.
Vertical Information Linkages
is defined as the extent of communication and coordination among organizational elements.
are used to coordinate activities between the top and bottom of an organization, and are
designed primarily for control. Employees at the bottom should have consistent goals, by rules, plans, and
formal management information systems.
The lines of organization chart act as communication channels. If there is an unknown problem you go
up a level, and then come back down when solved.
Rules and Plans
A rule or procedure can be established so employees know how to respond without communicating
directly with their managers. The most common plan is a “budget”
Vertical Information Systems
Include periodic reports, written information, and computer based communication
Horizontal Information Linkages
Horizontal linkage refers to the amount of communication and coordination horizontally across