Question

Organizational Design is described as being “the foundation” of business organization. Where do Organizational Structure and Organizational Charts fit into this foundation? Explain how Specialization, Departmentalization and Decision-Making Hierarchy help to determine a company’s organizational structure.

Answer 1

Organisation design , organisation structure and organisational chart are interrelated where organizational design is foundation, organizational structure is its by-product and organizational charts are it's representation.
The way a company is designed changes its organisational structure. The organisational structure revolves around various functions or products. Like sales, marketing, production , etc. It defines the purpose , responsibilities and the accountability.
whereas the way a company is structured is presented by an organisation chart. It is built around people and their titles. It should each person's job title and therefore keeps on updating as people may go and come.

Departmentalization refers to grouping of similar tasks together in one department so that duplication of activities are avoided and there is unity of action. On the other hand specialization is being master i one particular task or function so that efficiency is maintained. A good organisation structure is based on departments like department of finance , department of production and so on. A company having multiple functions will opt functional structure whereas a company having multiple products will opt divisional structure. So on what basis the departments are made decides the organisational structure of the organisation.

Accountability refers to the duty to answer your superior for the work done and every person is accountable to his / her superior. The role of organizational structure is to bring clarity in the reporting relationships i.e. to make clear who answers to whom. Thus, a good organizational structure is build on this hierarchy of decision-making and authority.