Organizational Structure

An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment.  Organizations are a variant of clustered entities  An organization can be structured in many different ways, depending on their objectives. The structure of an organization will determine the modes in which it operates and performs. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup and individual. Organizational structure affects organizational action in two big ways. First, it provides the foundation on which standard operating procedures and routines rest. Second, it determines which individuals get to participate in which decision-making processes, and thus to what extent their views shape the organization’s actions.

Many companies spend huge amount of time and money in changing their organizational structure. Recently Infosys Ltd redesigned its organization structure realigning its services around four verticals - BFSI, ECS, Retail and Manufacturing. It shows that the company wants to present a uniform and consistent deal to its clients and avoid the problems of multiple deals across different offerings, because it had faced such situations in the past. This company was split across Geographies in the late 90's. By 2003, the geographies were merged and company was realigned based on respective delivery units. Gradually the whole company was re jigged across six different verticals. Come 2007 and five horizontal units were embedded within these verticals. Finally just a year back, it was realigned on the lines of four verticals with most of the horizontal business units being merged to respective verticals. It makes sense to the argument that companies spend huge amount of time and money after their organizational structure.  So the reason behind this is that it is important for the success of the firm. While the strategic decisions are taken by the top line management, it is the effectiveness of the organization structure which translates this strategy into successful implementation. 

Let’s have a look on four main blocks of organizational structure with respect to Infosys Ltd.

Division of work: Complex work can be better executed by dividing it among different people. For example, every project has some people working on different technologies. Some people working on high level design, others are doing project management etc.

Departmentalization: This involves grouping people into departments based on some logic. In Infosys Ltd they are categorized into departments like Delivery, Marketing, HR etc. Also verticals like BFSI, ECS etc. 

Hierarchy: Chooses who reports to whom. For example, Engineers reports to lead. Lead reports to PM. PM reports to GPM etc.

Coordination: This involves the integration of departmental activities as a whole and monitoring the effectiveness of this integration.

Few types of organizational structures are shown below:

And these types of structures were compared with the branches of trees brought by the students which I have shown below. So by comparing these structures with branches we got clear idea about the different types of structures.