10 | Structure and Coordination Flashcards
What is structure?
how job tasks in an org are divided, grouped and coordinate
What does structure-environment fit mean?
an organisation’s structure needs to serve its strategy and match the needs of the environment
What is work specialisation?
Division of labour
- High specialisation: Jobs broken down into smaller, standardised tasks e.g. Adam Smith’s pin factory
- Specialisation => efficiency + higher prod.
- However.. too much specialisation => boredom, fatigue, greater absenteeism, high turnover => lower prod.
- So after 1900s ^ this has been understood and managerial interventions have been adopted to improve prod. —> giving workers larger partition of a job, allowing them to switch between tasks
What is span of control?
- How managers control their team/employees
Narrow span of control: Manager at top, managers and employee, employee underneath
Wide span of control: Manager, then manager with a lot of employees
- Taller triangle - more common in 1900s hierarchical - narrow span of control
- Shorter triangle - now more common - less hierarchical, wide span of control. - in recent years the trend has. Even to move towards wider span of control - reduce costs, make org more faster reacting
What is halocracy?
self-managing organizations - org without bosses/middle management
Potential disadvantages of halocracy?
- ambiguity, lack of clarity around progression, compensation and responsibilties
- informal power structures can arise => lack of checks and balances
–> no one to curb the power of emergent informal leaders
SO: a certain level of hierarchy is needed in orgs
What is centralisation?
The degree to which decision making authority is concentrated at higher levels of the hierarchy
What is decentralisation?
DM authority is given to employees who are closer to the dm context => faster reaction time
What is a positive of centralisation?
centralized operations can be very effiecient, esp in stable environments
What is formalization?
The degree to which job descriptions policies, rules and procedures are explicitly articulated
What does formalization lead to?
Leads to consistent and uniform output
e.g. McDonald’s ‘Operations and Training Manual’ - how long to fry chips etc.
What is departmentalization?
How jobs are grouped within the larger organization
- so by function, product group, geogrpahy, customer group, or a mix of all these arrangement
What is the key idea of a functional structure?
The organization is built around inputs –> usually the (functional) skills of people
Example of functional structure
CEO (at the top)
sales, marketing, production, govt relations, HR, finance (all underneath horizontally)
Pros of a functional structure
- in-depth knowledge sharing and specialisation within functional depts
- economies of scale
Cons of a functional structure
- poor horizontal communication across depts
- no one sees the big picture apart from the CEO - marketing manager sees things from a marketing perspective whereas finance sees from finance perspective - no horizontal coordination
- slow dm (hierarchical overload)
- limited adaptability
What types of orgs would adopt a functional structure? (Applicability)
orgs with little product diversity - so have a few small number of related products/services
organization that is operating a stable environment
What is the key idea of a divisional structure?
based on products
- reduce the need for info and organize around outputs
What are some outputs an org with a divisional structure might organize around? Give examples.
By product:
CEO (top),
* Medical devices –> production, finance, Sales and MArketing;
* Baby care –> prod/ finance/ sales+marketing;
*Nutritional supplements ==> “ “
Customer segment:
CEO
* Consumers –> SW, HW, Sales & Marketing
* Carriers –> “ “
* Corporate clients –> “ “
Geography:
CEO
* Region 1 –> Marketing, finance, prod.
* Region 2 –> “ “
Pros of a divisonal structure
- Maximise interaction within the unit
- Reduce need for info
- Lower dm to the units
- Training ground for execs –> get experience running a small business
Cons of a divisional structure
- Functional economies of scale are lost
- Tendency to duplicate work
- Difficulty communicating across divisional units
Where would a divisional structure be adopted? (Applicability)
- in diversified organisations
- Dynamic markets
- Firms with high info processing needs
What is a matrix structure?
structure is based on BOTH functions and outputs
- people report to 2 bosses
Pros of a matrix structure
- Increase information-processing capacity
- Improve dm
- Retain specialisation as well as economies of scale
- high adapatability to environment
