Designing Organizational Structure

 Organizations are economic and social entities in which a number of persons perform multi-farious tasks in order to attain common goals. Organizations are effective instruments in that they help individuals accomplish personnel objectives which they cannot achieve alone. According to Argyus, organizations are usually formed to satisfy objectives “that can best be met collectively”.

Organization is only a means to an end. It takes certain inputs from the environment and converts them into specified outputs desired by the society. Organizations design deals with structure aspects of organizations. It aims at analysing role and relationships so that collective efforts can be explicitly organized to achieve specific ends. The design process leads to development of an organizational structure consisting of units and positions. There are relationships involving exercise of authority and exchange of information between these units and positions. This organization design may lead to the definition and description of a more or less formal structure. Organization design is “the process of systematic and logical grouping of activities, delegation of authority and responsibility and establishing working relationships that will enable both the company and employees to realize their mutual objectives.


Steps in Designing Organizational Structure

 The first step in organization design is analysis of present and future circumstances and environmental factors. The next stage deals with detailed planning and implementation. Organization analysis is the basis for organizational design and it is the process of defining aims, objectives, activities and structure of an enterprise. Organization analysis includes an analysis of the following aspects:

1)                 External Environment – Economic, political, legal, social, etc.

2)                 Overall aims and purpose of the enterprise.


3)                 Objectives, specific aims or targets to be achieved.


4)                 Activities that includes the assessment of work being done and what needs to be done if the company is to achieve its objectives.


5)                 Decisions to be taken across horizontal and vertical dimensions.


6)                 Relationships from the new point of communication.


7)                 Organization structure which includes grouping of activities, span of management levels.


8)                 Job structure which includes job design, job analysis, job description and job specification. 

9)                 Organization climate – Working atmosphere, co-op eration, team work, commitment, communications, creating, conflict resolution, confidence and trust.


10)            Human Resources which includes availability of human resources marked by skill, knowledge, commitment and aptitude.


11)            Management Style – Includes Laissez-Faire, demo cratic, benevolent or autocratic. 

Every manager is responsible for a well – knit team so as to facilitate accomplishment, of department or unit goals. Organization structure can be designed on the basis of departmentalization and relationships. Departmentalization is the process of dividing work for an organization into various units or departments. The important bases of departmentalization are:

 (i)                Functions

(ii)             Product/Service

 (iii)           Territory

 (iv)           Relationships

 Matrix organizations


The other important basis of organizational design is relationship. The responsibility of a Chief Executive in the overall design of total organizational relationship with a view to developing organizational structure on the basis of relationships.

Relationships, Authority, Responsibility

 The process of organization brings relationships among employees at different levels, methods, money and machines. An organization as the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority and establishing relationship, for the purpose of enabling the people to work most effectively together in accomplishing objectives. The relationships that exist in an organization maybe formal or informal.

Formal Organization: – This is a system of well defined jobs each bearing a definite measure of authority, responsibility and accountability. Here the manger describes organizational relationships in a written and graphic manner


Informal Organization :- Informal organizations are known as socialgroups within an organization while the informal group is spontaneous the formal organization is the result of a deliberate and planned effort to pattern activities and relationships in specified way to facilitate the achievement of goals in a smooth manner.


 This is the right to give orders and the power to exact obedience. It is the right to decide what should be done or the right thing to do. Authority is the power to command or to exact action from others in the process of discharging the delegated responsibility. Thus authority is derived from functions. The important principle of authority is that Authority should equate responsibility. In order words required amount of authority should be delegated to discharge responsibility. This principle avoids misuse of authority and at the same time helps in proper discharge of responsibility.


 This is the requirement of answerability for one’s performance. It is the opposite phase of responsibility in the sense that responsibility flows downward while accountability flows from bottom to the top for proper performance. If one has been delegated with co-equal authority and responsibility he can logically be held accountable for results. While authority is delegated from a superior to a subordinate, accountability is created. Accountability is derived from authority. The important principle of accountability is single accountability. This responsibility is functional derivative authority which is derived from responsibility, and accountability is derived from authority.

 Organization Design and Line and Staff Relationships

 Organizations can also be structured on the basis of line and staff. Line and staff are viewed as relationships but not as departments.

 Some functional mangers have line relations with other managers whilst other managers have staff relations with other managers in the same organization. But those functional managers having staff relations may have line relations, in relation to their subordinates. Thus organization structure is designed on the basis of line and staff relationship within departmental structure. It is often regarded that the personnel manager has staff relation with other managers in an organization

Line and Staff Relationship

 The relationship which the managers in an organization deal with one another maybe broadly classified into two categories: Line and Staff

Line and Staff are often used in a way that is loose and unclear. These operating managers are frequently substituted for line and auxiliary and service departments are used for staff. Line and Staff are characteristics by relationships but not by departments. The important category of relationships is the line relationship.

Line relationship is a type of relationship existing between two managers due to delegation of authority and responsibility on giving or receiving instructions or orders. This refers to those positions of an organization which have responsibility authority and are accountable for accomplishment of primary objectives. Managers identified as line are not subject to command by staff position. In case of any disagreement between Line and Staff. The Line manager has right to make final operating decisions.

Line authority represents uninterrupted series of authority and responsibility delegating down the management hierarchy.

 The staff concept is probably as old as the organization itself. It is virtually impossible for Line Executives to perform all their functions and concentrate on all organizational activities. This naturally compels them to secure advance and help from specialists. The staff relationships are created thus the relationship between manager A and manager B is said to be a staff relationship.

line authority

Staff authority is advisory, which means that the staff, a supporting unit, recommends action or alternative actions to the Line manager.

Personnel Management as a Line Responsibility

It is unduly felt the “Personnel Management” is a L ine manager’s responsibility but a staff function. The responsibility of Line managers is to attain the goals of their respective departments by striking a harmonious balance between material, machines, money and men.

Thus the management of the four Ms which includes the management of personnel in their respective department is the responsibility of the Line management.

 Since management is getting things done through people, responsibility of managing people rests with the Line managers. Attaining overall organizational goals is the responsibility of the general manager through proper management of personnel and with the help of the different departments. The management of personnel in different departments is the responsibility of the various functional heads concerned. First level managers are also responsible for managing men in their respective sections while achieving their respective sectional goals. This personnel management is the responsibility of all Line managers. It is in this perspective that every manager is a personnel manager.

Personnel Management as Staff Function

Since the top management believes that organizational ability depends on sound management of human resources, it provides specialized assistance to Line managers through the personnel managers. Thus the personnel managers are created for the purpose of providing assistance, advice, information to Line managers in order to relieve them from the burden of management of personnel and to allow them to concentrate on their technical operations.

 Personnel managers perform various functions including; employment, training, development, wage and salary administration, motivation, grievance redressal, workers participation in management, collective bargaining, industrial relation etc.

 However, responsibility for the management of personnel still exists with Line managers. The personnel management is a line management responsibility but a staff functions.

Staff Role in the Personnel Department

 The personnel department in relation to other departments and other managers perform the following roles

Advice The major activity of the personnel department is advising counselling managers operating at various levels regarding problems, issues, clarification concerning policies or people of their departments. Advice should be based on thorough thinking analysis, research regarding pros and cons, implications during and after execution, possible measures to be taken. 

 Service – Personnel department renders all secretarial andexecutive services and performs background work in all personnel activities regarding recruitment, receiving and scrutinizing applications, conducting tests, interviews, placement, induction, training, compensation management and management of industrial relations. 

Monitory and Control – Personnel department monitors performance and controls the line activities to the extent they are related to personnel issues. It compares the actual performance of the Line managers with the established personnel policies, procedures, programmes. It also envisages appropriate corrective action. It advises the Managing Director to modify the policies basing it on the experiences in this regard.

Personnel Department in a Matrix Organization

In a matrix organization structure, employees have two superiors, that is they are under dual authority. One chain of command is functional and the other chain of command is project team. Hence matrix structure is referred to as a multi-command system (both vertical and horizontal dimension). Thus the team of employees of personnel department have two superiors which is the personnel manager (vertical dimension) and project manager (horizontal dimension). Both dimensions of structure are permanent and balanced with power held equally by both functional and a project manager.

   Qualifications and Qualities of Personnel Manager

 The functions of personnel management vary from organization to organization both in nature and degree. So the qualification requirement of a personnel manager differ from organization to organization, depending on its nature, size, location. However the qualification and qualities which will be applicable in general can be summarized as follows:

(1)              Personnel Attributes – The personnel manager as in the caseof any other manager must have initiative, resourcefulness, depth of perception maternal in judgement and analytical ability, freedom from bias would enable the personnel manager to take an objective view of both the management and workers. He must have the intellectual integrity. Moreover, the personnel manager should be thorough with Labour Law. An understanding of human behaviour is essential to the personnel manager. He should be familiar with human needs, wants hopes, desires, values and aspiration without which adequate motivation is impossible. 

Experience and Training




undoubtedly  an  advantage  provided  the  experience  was  in  an

appropriate  environment  and  in  the  same  area.   Training  in

psychological aspects, Labour Legislations and more specifically

in  personnel  management  and  general  management  is  an

additional  benefit.   Experience  is  an  enterprise  in  some  other

executive capacity can also help towards an appreciation of the

general  management  problems  and  a  practical  approach  in

meeting personnel problems.






Professional Attitudes: –  Professional




 necessary especially in the Nigerian context. The personnel managers’ job, as in the case of other managers is getting professionalized. He should have patience and understanding, ability to listen before offering advice. He should have the knowledge of various disciplines like technology, engineering, management, sociology, psychology, philosophy, economics, commerce and law. He must be able to couple social justice with a warm personal interest in people which must be secured by an uncommon degree of common sense.

Qualification: – Academic qualifications prescribed for the post of personnel manager vary from industry to industry. However, the qualification prescribed in general are:

   A degree from a recognized University.

 Post-Graduate degree in Social Sciences or Sociology, Industrial Relations and Personnel Management

Source National Open University of Nigeria




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