Dimensions of Organization Design

OrganizationsOpens in new window shape our lives, and well-informed managers can shape organization. The first step to understand organizations is by examining the features that describe specific organizational design traits.

Figure X-3 illustrates two types of interacting features of organizations: structural dimensions and contingency factors.

Figure X-3. Credit — Slideplayer Opens in new window

1. Structural dimensions provide labels to describe the internal characteristics of an organization. They create a basis for measuring and comparing organizations.
2. Contingency factors encompass larger elements that influence structural dimensions, including the organization’s size, technology, environment, culture, and goals.

Contingency factors describe the organizational setting that influences and shapes the structural dimensions. Contingency factors can be confusing because they represent both the organization and the environment.

These factors can be envisioned as a set of overlapping elements that shape an organization’s structureOpens in new window and work processes, as illustrated in Figure X-3.

To understand and evaluate organizations, one must examine both structural dimensions and contingency factors. These factors of organization design interact with one another and can be adjusted to accomplish the purposes listed earlier in Figure X-2Opens in new window.

Structural Dimensions

Key structural dimensions of organizations include the following:

1. formalization,
2. specialization,
3. hierarchy of authority,
4. complexity, and
5. concentration.

1. Formalization

These written documents describe behavior and activities. Formalization is often measured by simply counting the number of pages of documentation within the organization.

Large universities, for example, tend to be high on formalization because they have several volumes of written rules for such things as registration, dropping and adding classes, student associations, dormitory governance, and financial assistance. A small, family-owned business, in contrast, may have almost no written rules and would be considered informal.

2. Specialization

• If specialization is extensive, each employee performs only a narrow range of tasks.
• If specialization is low, employees perform a wide range of tasks in their jobs.

3. Hierarchy of Authority

The hierarchy is depicted by the vertical lines on an organization chart, as illustrated in Figure X-4. The hierarchy is related to span of control (the number of employees reporting to a supervisor).

Figure X4 | A Sample of Organization Chart

When spans of control are narrow, the hierarchy tends to be tall. When spans of control are wide, the hierarchy of authority will be shorter.

4. Complexity

Complexity can be measured along three dimensions: vertical, horizontal, and spatial.

5. Centralization

Centralization is characterized by the degree of delegation of decision making authority. Whereas low degrees of centralization means that employees have high discretion over decisions; high degrees of centralization means that employees have little discretion over decisions.

A high degree of centralization means that there are few decisions makers in the organization.

For reason of space, we will discuss the contingent factors of organizationsOpens in new window in the next postOpens in new window.