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4. Understand reasons why people resist change, and strategies for
planning and executing change effectively.
5. Build your own organizational design skills.
Figure 7.2 The P-O-L-C Framework

Creating or enhancing the structure of an organization defines managers’
Organizational Design task. Organizational design is one of the three tasks that fall
into the organizing function in the planning-organizing-leading-controlling (P-O-L-
C) framework. As much as individual- and team-level factors influence work
attitudes and behaviors, the organization’s structure can be an even more powerful
influence over employee actions.
7.1 Organizational Structure
LEARNING OBJECTIVES
1. Explain the roles of formalization, centralization, levels in the
hierarchy, and departmentalization in employee attitudes and behaviors.
2. Describe how the elements of organizational structure can be
combined to create mechanistic and organic structures.
3. Understand the advantages and disadvantages of mechanistic and
organic structures for organizations.
Organizational structure refers to how individual and team work within an
organization are coordinated. To achieve organizational goals and objectives,
individual work needs to be coordinated and managed. Structure is a valuable tool in
achieving coordination, as it specifies reporting relationships (who reports to whom),
delineates formal communication channels, and describes how separate actions of
individuals are linked together. Organizations can function within a number of
different structures, each possessing distinct advantages and disadvantages. Although
any structure that is not properly managed will be plagued with issues, some
organizational models are better equipped for particular environments and tasks.
Building Blocks of Structure
What exactly do we mean by organizational structure? Which elements of a
company’s structure make a difference in how we behave and how work is
coordinated? We will review four aspects of structure that have been frequently
studied in the literature: centralization, formalization, hierarchical levels, and
departmentalization. We view these four elements as the building blocks, or
elements, making up a company’s structure. Then we will examine how these
building blocks come together to form two different configurations of structures.

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