What is an organization?

An organization is a group of people who are working together in a deliberate structure to accomplish a specific purpose. We can categorize an organization into for-profit organizations and non-profit organizations.

Key elements of organization structure

Work Specialization

Work specialization is the dividing of an enormous task in an organization into several job tasks. An individual who handles the task will have to do the same activity repeatedly until he or she becomes an expert in that field.

ProsCons
Increase efficiency
Increase effectiveness
The individual will become an expert in the field
Individuals will feel bored
Individuals will feel stress
The task cannot pass to other people

Departmentalization

Departmentalization is the method to divide employees into several positions and job titles in an organization based on their field. Departmentalization is important for employees to have a clear understanding of their responsibilities to achieve goals in the organization.

Types of departmentalization

Functional departmentalization

This is the most common type of departmentalization. It divided the employees into each department based on their expertise, knowledge, and functionality. The employees usually only perform a specific function according to the department and seldom cross into other department’s tasks.

Let’s say you go to a bakery store to buy a cake. Each staff at the bakery store will have different tasks to handle based on their functionality. For example, we have the baker, the cashier, and the promoter. The common departments that we know are the HR department, IT department, and marketing department.

Product departmentalization

We could find this department in a company that provides different products under the same niche. For example, a company that sells electronic products like Apple can have three different departments that handle mobiles, laptops, or tablets.

Geographical departmentalization

Geographical departmentalization is a common departmentalization for large companies that have multiple branches in various countries. In order to manage each branch more effectively, the company will structure a team that is mainly responsible for the branch in that country.

Process departmentalization

Employees are given a specific task for process departmentalization. Let’s say if a bakery shop needs to produce an enormous wedding cake, each worker will perform different tasks through the entire process. Some workers will need to communicate with the customers, some may need to design the cake, while the rest will need to bake, make and decorate the cake.

Customer departmentalization

We can find customer departmentalization in a company that is focusing on providing services for the customers. For instance, the employees who are working in a bank have different tasks according to the customers that they are servicing. The bank will have a department that is for personal banking and a department for business banking.

Chain of Command

The arrangement in an organization in a hierarchy flow that connects each organizational level from top to the structure below or vice versa. The chain of command is important to structure the responsibility of each organizational level. When a non-managerial employee needs to make a report, the employee needs to find the person who is directly in charge of him. The person in charge can only deliver a command to the employees that he is under his supervision.

The span of control

The span of control is the number of employees that a manager can control effectively at the same time.

Centralization

The decisions for activities are made at the top managerial level.

Formalization

Formalization is the strictness of an organization in implementing rules, regulations, policies, and procedures.

Job redesign

Job redesign is a common scenario when the need to adjust the needs of employees is based on the situation. A common scene these days is the most company is redesigning their organization to downsize the size of the company. A company will restructure the tasks, duties, and responsibilities to enhance efficiency and improve overall effectiveness.

Technology

Technology is definitely a key element for every company as the world seems to move forward to the industrial revolution. Every company is relying on the need for technology. This is a must scenario because technology is important to help the company manage its database and network security. Technology nowadays, which is implemented with artificial intelligence has improved business opportunities, efficiency, and effectiveness.

Do you know many marketing departments are using autoresponders to handle customer services? Many applications and services that you are using are highly related to technology. YouTube and Google are using an artificial intelligence algorithm to track your browsing history and give you the information that you are likely to need. Facebook ads are using technology to promote the advertisements based on the users’ database.

People

Another key element in any organization is people. When working with a team in a large organization, there are a lot of things to consider choosing the right person to partner with:

  • Attitudes
  • Expectations
  • Perceptions
  • Behavior

We will deal with of a lot of people with a unique backgrounds, cultures, and educational levels. In order to accomplish the goals of the organization, we need to be considerable.

Organizational Vision

An organizational vision is the goals that an organization wants to achieve within a specific amount of time. The organizational vision is the philosophy and purpose for an organization to stay motivated to achieve its goals. An organizational vision statement is often stated with “Who are we and what we do”

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