Organizational Structure

Organizational Structure


In the changing environment it is essential to focuses on the effective organizational structure so that businesses may easily engage in managing their activities and work processes. Organizational structure is mainly defined as the hierarchical arrangement that clearly specifies the allocation of tasks and activities along with outlining the roles and responsibilities within the organization. Different principles are also considered by the businesses while managing their global business as it would assist in defining the organizational structure that mainly includes chain of command. It mainly includes correspondence between authority and responsibility so that they can easily define the reporting relationship among their staffs. 
However, organization design is defined as an effective process that mainly focuses on the reshaping of the hierarchy and organizational structure so that they can easily manage their activities in the global environment. Basically there are two generic models of organizational design that need to be followed by the firm or businesses.


In the contemporary scenario, management environments are becoming more diverse and complex. This is especially true for a global manager. As businesses are globalized, there is requirement of more global managers. With the global manager they are likely to perform activities related with managing the structure in global environment along with handling the professional goals (Gomes, Barnes & Mahmood, 2016). Apart from this, it is also stated that global manager also benefit the organization in managing or overcoming the cultural difference and increases the human interaction within the workplace. Therefore, it is required by the organization to focus on effective organizational structure and design so that management can easily perform their activities. However, organizational structure mainly specifies how assistant and employees report to their superiors. This improves coordination among the activities and practices of different individuals that are rendering services within the group.
There are different forms of organizational structure that is focuses by the businesses it mainly include divisional structure, functional structure, matrix organizational structure etc. The keybenefit of an effective organizational structure is that it diminishes conflict among the employees those who renders required services in the organization. Along with this, organizational structure also clearly defines the units through division of work and results in simplifying their control over the resources so that it eliminates unnecessary wastage. 
For the present report selected organization is National Australia Bank (NAB) it is one of the leading financial institution in Australiaheadquarters in Docklands, Melbourne mainly deals in providing banking services as well as insurance services to different customers. Through reviewing the bank structure it has been assessed that National Australia Bank Group is organized into eight divisions that is mainly spread across two geographical regions namely Australia and New Zealand. 
However, the report will focus on insight of organizational structure so that business may easily manage their units and division in effective manner so that it may easily perform their activities related with banking services. The present report also focuses on assessing the key drivers that result in changing the organizational structure so that it may easily manage the existing businesses. Along with this, it also covers certain aspects related with models and theories of organizational design with the different traditional and contemporary organizational designs so that company can easily manage their activities in the global market. 


Organizational structure is mainly defined as the hierarchical arrangement that clearly specifies the allocation of tasks and activities along with outlining the roles and responsibilities within the organization (Johansen, Olsen, Solstad & Torsteinsen, 2015). For the present organization that is National Australia Bank it has been assessed that leading bank mainly focuses on the divisional organizational structure. In this organizational structure leadership team is based on the range of services and products offered by the business. The CEO of NAB mainly focuses on the Executive leadership team structure in which CEO is the one that manages and control the activities of other divisions. 
Six attributes of organizational design
However, there are six different elements or attributes that need to be considered by the manager for developing the hierarchical structure (Waldman & Jensen, 2016). With the help of considering all the six attributes and elements manager may engage in taking effective decision related with organizational structure. The different elements are as follows-
  • Work specialization- The element that need to be considered in the organizational structure include work specialization that clearly define in bifurcating and distributing tasks to different unit in the organization so that it may be completed by different individual effectively. 
  • Departmentalization- After specialization of the work and activities manager must focuses on grouping or collecting the common tasks so that it may be coordinated to attain common objectives. The ground on which activities are grouped together is known as departmentalization (Cummings & Worley, 2014). 
  • Chain of command- Another attribute that need to be considered by manager while designing structure is focusing on chain of command that is establishing line of authority that clearly defines the reporting relationships of the different individuals and managerial position. 
  • Span of control- Another attribute to the organizational structure focuses on span of control that clearly identifies the number of levels and managers in the overall organization so that activities are managed effectively and efficiently. 
  • Centralization and decentralization- While making decision related with the organizational structure manager also considers the attribute related with centralization and decentralization. Under centralized element manager would limits the decision making authority to the top level personnel so that it results in taking effective decision that is beneficial for the overall organization (Wooten & Hoffman, 2016). On the other hand, through decentralization the power of authority is not just limited to the single personnel but it allows all the departments and division to take their decision by own so that it may easily enhance the input of different staffs into the decision making process. 
  • Formalization- The last attribute to organizational structure include formalization that clearly refers to the unit through which job in the organization are mainly standardized with clearly defining process and procedures within the business that covers the work processes.


There are different components as well as principles that clearly define the organizational structure of National Australia Bank, Dockland. The key component include departmentalization, it has been assessed that National Australia Bank mainly emphasis on different departments accordant with the range of services and products such as corporate banking, business banking, MLC & NAB Private Wealth etc. so that they may easily manage their activities and services. With the help of departmentalization it can easily benefit the NAB in the specialization that is financial department would mainly review the activities related with finance. 
Herein, different principles also need to be considered by the NAB while managing their global business as it would assist in defining the organizational structure that is chain of command (Bolman & Deal, 2017). It mainly includes correspondence between authority and responsibility so that they can easily define the reporting relationship among their staffs. On the other hand, another principle is Unity of Command that clearly indicates that there is only one boss and employees and staffs performing within the banking industry are liable to one supervisor.


Organization design is defined as an effective process that mainly focuses on the reshaping of the hierarchy and organizational structure so that they can easily manage their activities in the global environment (Scott, W. R., & Davis, 2015). Basically there are two generic models of organizational design that need to be followed by the firm or businesses. The foremost organization design focuses on Mechanistic structure in which the organization focuses on bureaucratic approach that is highly centralized authority.  With the help of this structure rapid change is very challenging as it does not focus on the flexible structure. Good examples of company following this type of structure are the banks as well as Microsoft. The key benefit of engaging in mechanistic structure is that it follows clear chain of command and delegation of responsibilities in the effective manner. 
On the other hands, another model of organizational design is Organic Structure that is characterized as the flexible organization that quickly adopts the change. Along with this, structure also focuses on decentralization that is emphasis on enabling formal and informal participation of staffs in decision making (Srivastava & Rajadhyaksha, 2017). The key example of this structure would be Facebook Corporation as well as Google that engages in effective or collaborative workplace that lead to satisfaction of employees.


The organization structural decisions are mainly influenced by different contingency factors that include environment, strategy, technology as well as organizational size. The key contingency factors include environmental uncertainty as the certain environment lends them to become more mechanistic organizational designs. On the other hand, uncertain environments require being more horizontal and adaptive organizational designs so that they may easily sustain in the global environment. With the change in external environment it directly impacts the overall strategy of the business (St Clair, Neufeld, Jones, Fonagy, Bullmore, Dolan, ... & Goodyer, 2017). Another contingency factor that affects the organizational design of NAB include technological factor. With the help of implementing the technological factor it results in changing the work process as well as methods within the banking sector son that it may results in delivering the quality outcome. However, it has been assessed that organizations requires becoming more mechanistic when they expand in their size. Along with this, change in the organization designs allowed then to impart innovation and creativity in the changing environment so that they may sustain their position.  


Organizational design mainly categories into traditional and contemporary designs that mainly focus on effective setting of the hierarchy and delegating authority and responsibility in effective manner (Human, Bick & Singh, 2016).   
Simple structure 
The key structure in traditional design is simple structure that is commonly used in the businesses that possess fewer employees and staffs with lower departmentalization and centralized authority. Through engaging in this form of design businesses does not follows the standardized policies within the workplace. 
Functional structure 
Another form of traditional designs includes functional structure in which the individuals are combined in groups as they possess related specialties or similar set of roles. For instance, marketing personnel are collectively grouped in the marketing unit as they engage in performing the similar tasks (Fayol, 2016). However, the functional approach related to departmentalization is been applied in the organization. The key example of organization that focuses on functional structure include National Australia Bank that focuses on imparting different services by different managerial personnel but top management or higher authority is responsible for coordinating the efforts of different units performing in the bank. 
Divisional structure 
Another traditional design focuses on divisional structure that is suitable for the organizations that possess different units and division as they deal in different products and services. In the divisional structure each division or unit has their own goals and activities that they need accomplish. Along with this, all the divisions have their manager to whom they would report that overcome the inefficiency within the work. Good example of organization that follows divisional structure is Eagle Boys Australia.


In the changing and global environment company focuses on adopting contemporary organizational design so that they can easily engage in performing their activities and services in effective manner (Gomes, Barnes & Mahmood, 2016). The contemporary design mainly include- 
Team based structure
Team based structure is a design in which different teams are formulated within the organization in order to accomplish the common goals and objectives that benefit the overall organization in enhancing their performance. Along with this, in this type of design there is no specific chain of command as the teams or groups are allowed to perform their activities accordant with their requirement. Therefore, it assists in mentioning effective as well as efficient way in which team can perform their tasks and activities. One of the effective examples of team based structure is the National Australia Bank in which the teams are formulated to perform the different banking services as well as insurance services. 
Project & Matrix structure 
In the contemporary scenario organization also focuses on the project & matrix structure in which the specialist or professionals from the different departments are gathered to work on the project (Mežinska, Lapi?a & Mazais, 2015). Each of the projects is accompanied with the project manager and they need to perform their duty related with assigning the resources to complete the project or project. Under matrix structure with the completion of task or project experts are move back to their department. On the other hand, in the project structure employees or experts are continuously working on the different projects. For example, William Demant Holding A/S in which the work activities are mainly project based. 
Autonomous Internal Units 
Another contemporary design focuses on Autonomous Internal Units that is mainly adopted by the large organization that possess independent decentralized business unit (Wong, Tseng, & Tan, 2014). The organization having decentralized business unit have its own clients and competitors. 
Boundary Less organization 
The contemporary design also include boundary less organization in which the design is not been clearly defined. The horizontal, vertical or external boundaries of the businesses are imposed by the predefined structure. However, the structure is flexible in nature as there is no boundaries as well as chain of command in the organization that lead to proper performance of activities by the employees.  
Learning organization
Another form of contemporary design are learning organization which is mainly designed to impart knowledge or learning within the workplace so that employees may easily perform their activities in effective manner. Along with this, in this form of organization employees are able to share their views as well as knowledge and then apply to the work environment (Stark, 2015). National Australia Bank is consider as a key example of learning organization that support in enhancing the learning among the employees and staffs rendering services in the bank. 


Thus, to manage the organization in the global environment it has been assessed that there are different ways that need to be focused by the businesses it mainly include networks collaboration, boundary less structure, flexibleness, entrepreneurial and innovations etc. 
For managing the organisation in contemporary scenario it is required to focus on boundary-less structure and flexibility so that it may outcome in managing the activities. With the boundary-less structure and practice it supports the business to enhance their area in the different countries and serve their customers. 
Network collaboration
The key method for managing the organizational structure in the globalized environment focuses on networks & collaboration activities. With the help of increasing collaborative activities and increasing network among the different businesses it results in managing the organization as they are likely to support the businesses to sustain in the industry or environment (Johansen, Olsen, Solstad & Torsteinsen, 2015). 
Nimble & Flexible 
Along with this, it has been also assessed that organization need to be flexible in managing their activities so that in case of any change or issues they must easily engage in the adopting the change activities. It is assessed that bank focuses on functional structure that need to become flexible in managing the activities.
Entreprenurial & Innovation
For managing the new business an individual need to be innovative or entrepreneurial so that they may easily manage the business in competitive environment. With the increasing competition individual must engage in some innovative or entrepreneurial activities that support in managing the new business successfully. 
Globalisation is also considered as an effective process that supports the existing business as well as new businesses to manage their activities and operations so that they may easily serve the distinct requirement of customers.  
For instance, to manage the activities of National Australia Bank in the global organization it is required to focus on collaboration activities among the regional banks so that they may easily manage their organizational activities in the new region. 


Organizational structure often changes with the different factors such as work specialization, increasing networking aspects, contingency factors etc. However, there are different views of changing organizational structure that is holacracy as well as hierarchical views. Holacracy view mainly concern with focusing on autonomy perspective rather than defining the tasks or job role (Lalaounis, 2017). This concept mainly views organizational structure as the combination of different teams that act as the circles and by their own with reviewing themselves as the leaders within the organization. Along with this, holacracy view also persists that each circle performs their activity democratically with the opened details on how the activities or tasks are been managed and organized within the organization. Therefore, it is stated that holacracy is consider as the self practice that mainly concerns with empowering the individual to drive the change. 
Another view on changing organizational structure mainly focuses on hierarchy view that enables proper hierarchical structure of management personnel. It mainly views the organizational structure as the layout of pyramid that features different hierarchy and monitors the activity performed by the staff in the lower hierarchy (Helmold & Terry, 2017). Therefore, it is stated that hierarchy view supports in promoting the development of employees as specialists so that they may easily perform their activities in effective and efficient manner. 


Through concluding the report it has been stated that it is essential for the organization to focus on proper management and organizing function so that businesses may easily sustain in the global environment. With the help of above report it has been concluded that with the increasing globalization activities it has clearly demonstrated that organizational structure of banks as well as other organization is constantly been changing to deliver effective services among the customers. Along with this, it has been also assessed that cited bank must focus on different attributes that are related to organizational structure so that they can easily manage the power and authority relationship within the businesses. 
It has been also stated that with the changing environment or globalization of activities organization focuses on recreating their design so that they can easily engaged in decentralization of the authority and relationship within the businesses. It basically engages in adopting the generic models of organizational design that is mechanistic and organic structure so that they may easily benefit the organization in attaining the objectives. Apart from this, with the changing environment and globalized scenario it has been summarized that there are different forms of organizational design that is traditional and contemporary organisation design. The traditional design simply allows the organization to manage their different level employees with delivering centralized or decentralized power to the higher management.


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