The key elements in organizational design are work specialization, chain of command,
span of control, departmentalization, centralization-decentralization, and formalization.
Traditionally, work specialization was viewed as a way to divide work activities into separate job tasks. Today’s view is that it is an important organizing mechanism but it can lead
to problems. The chain of command and its companion concepts—authority, responsibility, and unity of command—were viewed as important ways of maintaining control in
organizations. The contemporary view is that they are less relevant in today’s organiza-
tions. The traditional view of span of control was that managers should directly supervise
no more than five to six individuals. The contemporary view is that the span of control
depends on the skills and abilities of the manager and the employees and on the charac-
teristics of the situation.
The various forms of departmentalization are as follows: Functional groups jobs by
functions performed; product groups jobs by product lines; geographical groups jobs by
geographical region; process groups jobs on product or customer flow; and customer
groups jobs on specific and unique customer groups.
Authority refers to the rights inherent in a managerial position to tell people what to
do and to expect them to do it. The acceptance view of authority says that authority
comes from the willingness of subordinates to accept it. Line authority entitles a manager
to direct the work of an employee. Staff authority refers to functions that support, assist,
advise, and generally reduce some of managers’ informational burdens. Responsibility is
the obligation or expectation to perform assigned duties. Unity of command states that a
person should report to only one manager. Centralization-decentralization is a structural
decision about who makes decisions—upper-level managers or lower-level employees.
Formalization concerns the organization’s use of standardization and strict rules to
provide consistency and control.