SHS

Organization and
Management
Quarter 1 – Module 7
Nature and Types of Organization
Structures

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Organization and Management – SHS

Quarter 1 – Module 7 : Nature and Types of Organization Structures

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Module

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 NATURE AND TYPES OF ORGANIZATION STRUCTURE

Good day learner!

Today’s module discusses and describes the different types of structures that a company can use dep

The following are for you to learn:

identify and discuss the different types of organization structures; and
classify the advantages and disadvantages of each type of organization structures.

For better understanding, the following words will help

Organization – is a group of people who work together for a common good.

Organization Structure – is a framework where management authority is defined,

resources are properly allocated, and channel of communication is observed.

Formal Organization – is an organization where activities are rationally defined,

division of work is unambiguous, and managerial authority is explicitly vested in
individuals according to their skills and responsibilities.

Informal Organization – refers to shadow organizations that evolve through the

personal interactions, sentiments, and social activities of individuals.

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 Line Organization – is the simplest and oldest form of organization structure; the
authority is delegated directly from top to bottom.

Line and Staff Organization – the line authority carries the right to require the
execution of orders while the line staff executive has the authority to suggest on how
such orders could be implemented.

Functional Organization – fully applies the principles of division of labor and

specialization where individuals are expected to be expert in his own field.

Let’s see how far you know by simply answering the questions below.

How much do you know?

Direction: Read the statement carefully then encircle the letter corresponding to the word/s
being described.

1. It is the simplest and oldest form of organization structure.

A. Line-Staff Organization C. Line Organization
B. Functional Organization D. Formal Organization

2. This is known as the backbone of management.

A. Planning C. Directing
B. Organizing D. Controlling

3. It was advocated by Frederick Taylor where a principle of labor and specialization is

applied.
A. Line organization C. Informal organization
B. Formal organization D. Functional organization

4. This is a shadow organization that evolves through the personal interactions,

sentiments, and social activities of individuals.
A. Informal organization C. Formal organization
B. Line Organization D. Functional organization

5. It frees the line executive from performing functions not related to his work.
A. Formal organization C. Line-Staff organization
B. Line organization D. Informal organization

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 Let’s get started by performing the activity
below. Good luck!

Activity

Direction: Arrange the jumbled letters below by considering the given cl

GORINGANIZ 1. It is the second managerial function which is

considered to be the backbone of management is called
.

ROFLAM GANORIZAONTI 2. Managerial authority is explicitly vested to

individuals according to skills and responsibility is
.

TIOFUNALNC ONIRGATIZAON 3. An organizational structure which has a high

degree of specialization is .

INLE NIORZATIGAON 4. The simplest form of organization structure

which facilitates discipline and control to individual is
.

NELI FTASF GAORNITIONZA 5. It is a structure that provides a staff support with

specialized knowledge and capability to line executive
is called .

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 What do I need to know?
Read and understand the discussion below and you will learn the different o

An organization need to be organized to achieve its goal. Functions and authority

must be clear and well defined and resources must be properly allocated. An organization
seems to be ineffective when it is ill-structured or not organized, hence, both human and
material resources should be properly allocated.

A structure of organization varies depending on the size of the firm. The type of
structure adapted by the organization, however, influences how people act and perform
within the organization. Below are the commonly used types of organizational structures.

Line Organization

The line organization is the simplest and oldest form of organization structure where
authority is delegated directly from top to bottom. Both staff and line functions are performed
by line executive. Each exercises line authority over his own subordinates. It is for these
reasons that a small size business uses this structure in their organization. Below is the
structure of a line organization.

CHIEF
EXECUTIVE

LINE LINE
EXECUTIVE EXECUTIVE

SUPERVISOR SUPERVISOR 6 SUPERVISOR SUPERVISOR

WORKERS
 LINE ORGANIZATION
Advantages Disadvantages
 It is simple. It shows the direct lines of  It encourages the development of excessive
responsibility, authority and load of administrative responsibility. It
accountability of each individual in the becomes breeding place of “organizational
organization. dictators”.

 It facilitates decision making within the  It encourages the development of

organization due to the simplicity of its centralization of line controls of
organization structure. responsibilities.

 It facilitates discipline and control of  It lengthens the chain of command of the

individuals in the organization for its clarity organization, which causes the delays in the
and chain of command. administrative decisions.

 It facilitates flexibility within the  It prevents the development of specialization,

organization as it responds to the changing other than its basic line functions, which is
conditions and demands of its organizational needed to strengthen the capacity of line
environment. executives.

 It discourages the recruitment and training of

qualifies personnel for the organization.

Line-Staff Organization

The line staff is the pattern of most large and complex organizations. The line
authority carries the right to require the execution of orders while the staff executive has the
authority to suggest on how such orders could be implemented. Below is the pattern of a
line-staff organization structure.

CHIEF
EXECUTIVE STAFF
EXECUTIVE

LINE LINE
EXECUTIVE EXECUTIVE WORKERS

SUPERVISOR SUPERVISOR SUPERVISOR SUPERVISOR

WORKERS WORKERS WORKERS WORKERS

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 LINE-STAFF ORGANIZATION
Advantages Disadvantages
 It maintains a single line of responsibility,  It creates a source of conflict between line
authority and accountability and staff executives. Line executives may
consider the staff a threat to their own
 It provides the line executives with staff positions
support of specialized knowledge or
capability  It forces the staff executives to insist on their
advices to line executives to show their
 It frees the line executive from performing importance in the organization and to attain a
functions not directly related to his work certain degree of professional achievement.

 If facilitates the recruitment and training of  It creates administrative problems if the

people needed by the organization staff authority is not carefully defined.

Functional Organization

Functional organization fully applied the principles of division and specialization

advocated by Frederick Taylor. For a functional organization to be effective, well qualified
individuals should be appointed to all positions. Each individual should know exactly what
is expected of him and what he expects others to do. This is done by subdividing them into
departments or division for the purpose of allowing the people work effectively in groups as
to their work alone. Below is an example of a functional organization.

FUNCTIONAL FUNCTIONAL FUNCTIONAL

SUPERVISOR SUPERVISOR SUPERVISOR

WORKERS WORKERS WORKERS WORKERS WORKERS

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 FUNCTIONAL ORGANIZATION
Advantages Disadvantages
 It permits a high degree of specialization.  It suffers from dual authority and violates the
principles of single accountability. No
 It is easier to fill positions in such an organizations can run smoothly when a single
organization since function specialists are individual has more than one boss.
required to have only a limited number of
talents.  Authority and responsibility often overlap. It
is to draw a sharp line between functions.
 It permits each specialist to become an expert
in his own field.
 It is often difficult to get technical experts to
 It provides better technical supervision for work together smoothly. Each is likely to feel
subordinates than would be possible where that his area of specialization is the most
supervisors must perform less similar important.
functions.

Organization may come in all sizes and types. Each structure is unique to some extent.
However, the use of the different types of organizational structures also considers the nature
of an organization which is the formal and Informal organization.

Formal or formalized organization is also labeled as bureaucracies. A

bureaucracy is a form of organization in which activities are rationally defined, division of
work is unambiguous, and managerial authority is explicitly vested in individuals according
to skills and responsibilities prescribed for their organizations and it implies a less rigorous
division of labor in a less formal environment.

A chain of command is the unit broken line authority between the lowest and
highest positions in an organization. It is the description of rank-ordered authority, and in a
bureaucracy, there is a presumption that a subordinate will seek direction, communicate
decisions and take orders directly from an immediate superior. While span of control is
defined by the number of subordinate one manager supervises.

Informal Organization on the other hand, refer to shadow organizations that evolve
through personal interactions, sentiments, and social activities of individuals. Informal
organizational structures are not written down; they do not have job titles or formal
description of authority. Mutual support by the members may also ensure communications,
enhance socialization, and provide a sense of group identification. Informal leader gain status,
although without rank, which can help satisfy employee’s needs for leadership.

For sure you have gained idea from the discussion. You are now ready to pe

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Activity #2 – My Organizational Structure

Direction: Outline and draw below a sample of an organizational structure that you saw or
observed in an office you have already visited. Include name and position in each box of the
outline structure.

Draw the structure here:

Now let’s see what you have learned from the lesson by answering the fo

Practice Task 1

Direction: Underline the correct word/s that correspond to the statement.

1. (Organization, Organization structure) is a framework where management

authority is defined, resources are proper allocated, and channel of communication is
observed.

2. (Informal organization, Formal organization) is formed through interaction,

sentiments, and social activies of the people but do not have a structure.

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3. (Functional organization, Line-staff organization) is a type of structure that
applies the principle of division of labor and specialization.

4.) (Line organization, Line-staff organization) this structure is pattern by large

and complex companies but somehow creates conflicts between line and staff executives.

5.) (Line organization, Functional organization) this is the simplest form of structure
and it facilitate discipline and control of individuals for its clarity and chain of command.

Wow, you’re doing great! You can now proceed to the next task.

Practice Task 2

Direction. Fill in the blank with the correct answer.

An organization to be effective need to have an organized structure where employees

and other resources are properly allocated. There are two nature of organizations namely; 1)
and informal organization. Formal organization is labeled as bureaucracy
where managerial authority is explicitly vested to individuals according to their skills,
responsibility and competency. The 2.) organization on the other hand is said to
be a shadow organization where this organization was been created through personal
interactions, interest, sentiments and social activities of individuals but does have
organizational structure. Formal organization makes use of the organization structure
depending on the size of the organization. The first type is 3.) where it is said to be
the simplest and oldest form of organizational structure which commonly used by any
agencies or companies. The 4.) is used by most large and complex
organizations for it has staff support with specialized knowledge that helps the line
executives. The last structure is advocated by Frederick Taylor it is called 5.) where
principle of division and specialization is fully applied.

Good job! You are now about to complete the module by answering the final test prepared fo
learner!

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Post Test:

Direction: Encircle the letter corresponding to the word/s that matches the given
statement.

1. This is an organization that is formed through the personal interactions, sentiments,

and social activities of individuals.
A. Formal organization C. Formal organization
B. Informal organization D. Functional organization

2. A structure that applies principle of labor and specialization and was advocated by
Frederick Taylor.
A. Functional organization C. Informal organization
B. Line organization D. Formal organization

3. It is the simplest and oldest form of organization structure and is commonly used by
many organizations.
A. Informal Organization C. Line-Staff Organization
B. Functional Organization D. Line Organization

4. It is a structure that has a staff support to frees the line executive from performing
functions not related to his work.
A. Informal organization C. Line organization
B. Line-staff organization D. Functional organization

5. This is known as the backbone of management.

A. Directing C. Organizing
B. Planning D. Controlling

Additional Activity:
Explain the following statements:

A Line organization can become “breeding place of organizational dictators”.

Line-staff organization structure creates a source of conflicts between line and staff executives.

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Pretest:
1. C 4. A
2. B 5. C
3. D

Learning Activity 1

1. Organization 4. Line Organization

2. Formal Organization 5. Line-Staff Organization
3. Functional Organization

Learning Activity 2

Criteria for Rubrics:

5pts - brief with clear and complete thoughts/idea 4pts
- brief with clear thoughts/idea
3pts - with ideas but not direct to its main point
2pts - not concise idea

Practice Task 1

1. Organization structure 4. Line-staff organization

2. Informal organization 5. Line organization
3. Functional organization

Practice Task 2

1. Formal organization 4. Line-staff organization

2. Informal 5. Functional organization
3. Line organization

Post Test
1. B 4. B
2. A 5. C
3. D

Reference:

Samar, Gregorio L. et al. (2016) Introduction to Organization and Management. Hunt

Publishing Center.78-83.