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Key elements in Organizational Design

Management deals with the process that drives the organization towards its performance. The processes which are to be followed to initiate the organizational structure and also to create strategies and the steps to be studied by managers are about management. This task is based on two topics, which can be; a) Critically review the six important elements in Organizational Design, b) Make clear what managers do in Strategic Management Process. With the help of the Organizational Design, a firm can start and compete in to the market and achieve its goal. It offers six elements where this process can be done, that happen to be; Work Specialization; Departmentalization; Chain of Command; Course of Control; Centralization Vs Decentralization; and Formalization. And with the help of the Strategic Management Process, which includes nine steps, they are; Identify the organization's current quest, goals, and strategies; Review the environment; Examine the organization's resources; Identify opportunities and hazards; Identify advantages and weaknesses; Reassess the organization's objective and targets; Formulate strategies; Put into action strategies; and Evaluate results.


Organizational design is a process of expanding and changing the organization's framework by its managers. It really is a chart made up of the reporting structure i. e. who accounts to whom.

Organizational framework is thus a framework on which an organization is patterned for coordinating and undertaking organizational tasks. (Kumar, A. and Bhat, A. , 2008).

Organizational design requires decisions about the following six elements:

Work Specialty area:

Work specialization details to which the overall job of the organization is divided and split into smaller component parts. For instance, one individual would color a wall structure and another person fixes a door. So by breaking jobs up into small duties, maybe it's performed over and over every 10 seconds while using employees who got relatively limited skills.

The main thought of this process is the fact the whole job is not done by an individual which is broken down into steps, and a different person completes each step. The task will be done successfully and effectively. It saves time and also the staff skills of doing his job effectively increase through repetition.

It also has some drawbacks as well. When specialization is overdone, jobs may become more simplified. And when employees do one single job, they become bored and fatigued. Also, the opportunity of the employee's expansion will be limited. Specialty area in one task is good but by getting working out for all other tasks too, is way better to cop up with other activities in the business.


Once jobs have been given through work specialization process, now they'll be grouped in common tasks. There will be made departments with common activities for effective coordination of work. You can find five common forms of departmentalization:

Functional Departmentalization:

It is the most frequent kinds of departmentalization in which similar jobs grouped collectively into a section, such as marketing, funding, human resources, etc as shown in fig. 1. 1.

The efficiencies from putting together similar specialities and folks with common skills and knowledge could be beneficial as well as the coordination with useful areas will be better. But cross-department coordination can be difficult and there will be limited views of organizational goals.

Product Departmentalization:

It is grouped based on product line. Each administrator will be responsible for a location within the business depending on his/her specialty area as shown in fig. 1. 2.

As managers are specialized in that particular area, it'll give a broader experience and it will be easier for him to gain access to the work-unit performance. Your choice making here will be quite faster than the useful departmentalization. On the other side, the duplication of functions could improve the cost. It'll be difficult to coordinate across departments and also you will see limited views of organizational goals.

Geographical Departmentalization:

Big organizations find beneficial in organizing this form of departmentalization so that activities performed in a region are managed collectively. It forms sections by the various areas as shown in fig. 1. 3.

It will be more effective and efficient for the professionals in controlling specific regional conditions that arise. It might response and serve easier to the demand of different markets. But there could be duplication of functions and resources that will increase cost.

Matrix Departmentalization:

It is a structure where several varieties of departmentalization are being used together; most common forms combine efficient and product where employee reviews two bosses, i. e. the useful as well as the merchandise. It will increase cross-functional connections as shown in fig. 1. 4.

It will be beneficial to take care of effectively and efficiently large and complex tasks. It will require high levels of management skills and high degrees of coordination as well. It will also increase the degree of conflicts.

Customer Departmentalization:

This form of departmentalization communities organization's activities regarding to its customers. An organization finds it good for organize in line with the types of customers it serves as shown in fig. 1. 5.

It will be helpful to focus and meet up with the customers' needs. But again there will be duplication of resources plus they may find challenges to achieve coordination across departments.

Chain of Control:

Another element within an organizational design is defined an order which expert and power in an organization is employed and delegated from top management to the low management. It also ensures clear assignment of tasks and responsibilities of every employee at every level.

Span of Control:

The course of control within an organization is thought as the amount of employees reporting right to one supervisor/director. It is stated, the wider the span, the better the business. It determines the number of employees a supervisor can effectively and effectively manage.

Centralization Vs Decentralization:

Robbins and Coulter express this perfectly, "If top professionals make the organization's key decisions with little or no insight from below, then the company is centralized. "

Decentralization can be explained as "the spread of power away from the centre to local branches or government authorities. "

The environment is stable in centralization and complex, uncertain in decentralization. Also, the lower-level professionals aren't as ready or experienced at making decisions as upper-level professionals in centralization and on the other hand in decentralization, they are incredibly capable and experienced at making decisions. In centralization, the business is large and in decentralization, companies are geographically dispersed.


Formalization is the degree to which worker behaviour is guided by rules and steps. The organizations with high formalization have tight rules and regulations. The reduced formalization organizations have hardly any written guidelines and types of procedures and are less stable.


Strategic management is a particular course of action that is intended to accomplish a corporate goal. The Strategic Management Process defines the goals and targets for a business, it creates the action plan so that a company can reach them and then it comes after the plan. You will discover nine steps in Strategic Management Process which professionals need to follow; which are defined as under:

Identify the Organization's Current Quest, Aims, and Strategies:

It is important to identify the goals and aims of the business. It defines the present purpose of the business as a mission and the strategies becoming followed. The mission statement becomes the recognition of a business so it is very much indeed essential to identify it.

Analyze the surroundings:

It is a process of monitoring the organizational environment to identify competitor's actions also to confirm if it's suitable to allow firm goes to already set guidelines to attain its goals. It could be performed by using Porter's five forces, which evaluates; the bargaining power of suppliers and the potential buyers, the threat of new entrants and substitutes, and the rivalry of competition.

Analyze the Organization's Resources:

By studying the organization's resources, a company can make a pictorial view of the available features and resources outside and inside of the business. It will help to determine the organization's competitive weapons i. e. value creating skills, capabilities and resources.

Identify Opportunities and Dangers:

It identifies the opportunities and hazards outside the company. It could be defined as SWOT analysis which includes its two components i. e. Opportunities and Hazards. Opportunities are the positive exterior environmental factors which have to be analysed for further growth of the organization. The threats will be the negative external environmental factors which need to be identified to prepare the organization to remain competitive and convert those threats into the opportunities.

Identify Talents and Weaknesses:

It recognizes the talents and weaknesses within the organization. It also can be explained as SWOT analysis which has the remaining two components i. e. Advantages and Weaknesses. Talents are inside activities being done well by an organization which helps an organization to accomplish its goal. Plus the weaknesses will be the activities that not being done by an organization which is unfavourable for the business to accomplish its goal.

Reassess the Organization's Objective and Objectives:

Reassessing the organization's mission and objectives helps to review the firm's current performance and to take better actions for the success of the business. It identifies as SMART which means Specific, Measurable, Achievable, Realistic, and Timeframe.

Formulate Strategies:

Formulation Strategy is the procedure of deciding appropriate training of action for reaching organizational goals. It follows your choice making process. It could be further describes by Michael Porter's general strategies, which can be; a) Cost Management, b) Differentiation, and c) Focus.

These common strategies each have qualities that can serve to guard against competitive makes. The following table (fig 1. 2) compares some characteristics of the universal strategies in the context of the Porter's five causes:

Implement Strategies:

It is the procedure of distributing resources and putting strategies into an action to achieve its goal and targets. When the strategies are executed within the organization, it focuses on the process through which strategies are achieved.

Evaluate Results:

It controls the procedure to look for the effectiveness of a technique. An organization can assess results by critiquing the process, changing the quest and objectives and strategies, and by initiating the corrective procedures.


In the nutshell, I'd like to say all these topics clearly see that the organizational design and the strategic management process are the important elements of the management to start out a business also to achieve its goals and aims. All six elements of the organizational design helps in forming a small business and everything nine steps in tactical management process are crucial to achieve a firm's aims.

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