Organizational structure decides:
1. Division of labour:
Division of labour is captured in an organization chart, a pictorial representation of an organization' s formal structure. An organization chart is concerned with relationships among tasks and the authority to do the tasks. Division of labour helps in specialization in the production process. Complex jobs can usually be less expensively completed by a large number of people each performing a small number of specialized tasks than by one person attempting to complete the entire job. Division of labour is a form of specialization in which the production of a product or service is divided into several separate tasks, each performed by one person.
2. Delegation of authority:
Authority is legitimized power. Power is the ability to influence others. Delegation means that higher level managers grant some of their power "influence" and responsibilities to lower level managers. Note that delegation of authority does not free the manager from accountability for the actions and decisions of subordinates. The more power managers give to their employees, the more responsibility their employees must take
regarding to actions and decisions. Delegation frees the managers from the tyranny of urgency .Delegation free managers to use their time on high priority activities. Delegation of authority is guided by several concepts: