I.A Organizational Structures

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Excerpt From The Certified Manager of Quality/Organizational Excellence Handbook

Perhaps no other factor has a greater impact on an organization than how well it is led on both a strategic and an operational basis. Additionally, leadership is not solely the responsibility of those who reside at the higher levels of the hierarchy, but is instead an activity in which anyone involved in the success of an organization can take part. Strategic leadership includes defining the structures to achieve the overall vision and mission of an organization and its strategies and systems.

Organizational Design

A major role of leadership is to ensure that an organization is designed to carry out its mission, goals, and strategies. Understanding leadership requires a fundamental understanding of organizations and the design factors that must be considered.

The design of an organization is the formal framework for communication and authority, and is determined by three major factors:

  • Complexity. The number of different entities (for example, job titles, reporting levels, functional departments, and physical work locations) that will exist in the organization.
  • Formalization. How much the organization will rely on standard guidelines and procedures to instruct and direct employee activities.
  • Centralization.1 Whether decision-making authority is located primarily at upper management levels or is delegated to lower levels.

These three aspects can be combined to create many different organizational designs. Purposes of organizational design are to:

  • Divide the total work required into logical functional groupings (for example, departments, work units) and the jobs within the functions.
  • Assign specific tasks and responsibilities to each individual job.
  • Allow better coordination of diverse organizational tasks.
  • Establish relationships among individuals, work units, and functions.
  • Establish formal lines of authority and decision making.
  • Allocate and deploy organizational resources.

To create an appropriate design, a decision must be made as to how work activities will be organized both vertically and horizontally. The vertical structure typically categorizes positions as top managers, middle managers, first-line managers, and operations personnel. Creating the vertical structure includes determining these categories and defining the interaction between the levels by deciding who reports to whom, and who has the authority to make what types of decisions.

Quality Management BOK Reference

I Leadership 
I.A Organizational Structures - Define and describe organizational designs (i.e., matrix, flat, and parallel) and the effect that a hierarchical management structure can have on an organization.​ 

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Date Added: Sep 9, 2018
Date Last Modified: Sep 21, 2020
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