Ch 10 - Organization Structure

Question 1

What changes have been seen lately with general organizational structure? Why might some employees like this? why might some not?

Answer 1

orgs are getting flatter and decentralized

like: more autonomy (oft leads ot more job satisfaction and fulfillment)

not like: some employees like hierarchy because it lessens the stress of uncertainty

Question 2

What is the difference between organizing and strategy? What is the definitnion of organizting?

Answer 2

Strategy defines what to do, organizing defines how to do it **organizing follows strategy

Organizing: the deployment of organizational resources to achieve strategic goals

Question 3

What does an org structure outline?

Answer 3

• the set of formal tasks assigned to individuals and departments
• formal reporting relationships
• systems to ensure effective coordination of employees across department

Question 4

What is division of labour? What happens when division of labour is high?

Answer 4

the degree to which organizational tasks are subdivided into separate jobs

high = jobs bery specialized and leads to employee isolation and boredom

Question 5

What is chain of command? Unity of command? Scalar principle?

Answer 5

chain = unbroken line of authority that links all employees in an organization and shows who reports to whom

unity of command = each employee is held accountable to only one supervisor

scalar principle = a clearly defined line of authority in the organization that includes all employees

Question 6

What is authority? What are 3 main characteristics?

Answer 6

= formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve organizationally desired outcomes

1. Auth vested in organizational positions, not people
2. Auth flows down the vertical hierarchy
3. Auth is accepted by subordinates

Question 7

What are responsibility, accountability, and delegation? How does resp relate to authority?

Answer 7

Responsibility: the duty to perform the task or activity as assigned
– with authority: auth should match resp
—-> with more resp for task but little auth, task becomes v hard
—-> with more auth and less resp, may wield auth to acheive frivolous outcomes (tyranny vibes)

Accountability: people with authority and responsibility are subject to reporting and justifying task outcomes to those above them in the chain of command (auth and resp aligned with accountabliity)

Delegation: process managers use to transfer authority and responsibility down the hierarchy

Question 8

What is line authority vs staff authority?

Answer 8

line = managers have formal authority to direct and control immediate subordinates

staff = narrow authority that includes the right to ADVISE, RECCOMMEND, and COUNSEL in the staff specialists’ area of expertise

difference:
- line is formal auth, staff is only advising
- line depts perform tasks that reflect org goals + mission, staff depts SUPPORT line depts
ex: finance dept, HR dept –> all coordinate with other depts to help em acheive goals

Question 9

What is span of management/control? What is a typical span number for trad org and for new lean org?

Answer 9

number of employees reporting to a supervisor, thus how closely supervisor can monitor each

trad = 7-10 subordinates per mger
lean = 30-40+

Question 10

What factors suggest an org should go with a larger span of control (less supervision)?

Answer 10

• Work performed by subordinates is stable and routine
• Subordinates perform similar work
• Subordinates are in one location
• Subordinates are highly trained
• Rules and procedures are defined
• Support systems and personnel are available
• Few nonsupervisory activities
• Manager prefers a large span

ex: assembly line

Question 11

Tall structure vs wide? What is a common structural problem related to this? What % of mgers surveyed thought their org had too many levels of mgmt?

Answer 11

Tall structure: span of management is narrow and has many hierarchical levels

Flat structure: span of management is wide and has few hierarchical levels

problem: too many levels with a span that is too narrow
72% of mgers thought their org had too many levels!

Question 12

What is a big problem that comes from too many management levels? What is the result of this?

Answer 12

routine decisions are made too high in the organization
= pulls higher-level executives away from important, long-range strategic issues
= limits the creativity, innovativeness, and accountability of lower-level managers
= decisions cant be made quickly

Question 13

What is centralization? Decentralization? What influences cetranlizatoin?

Answer 13

Centralization: decision authority is located near the top of the organization (C suite)
Decentralization: authority pushed downward to lower organization levels (spread, sometimes even to bottom level of employees – Zappos)

influencing factors:
- less centralization when env is uncertain and changing lots
- needs to fit the firm’s strategy (ex: providing local, specialty goods = decentralized + more decision making to each store)
- more centralization when in a crisis

Question 14

What are the benefits of decentralization?

Answer 14

• relieve the burden on top managers
• make greater use of employees’ skills and abilities
• ensure that decisions are made close to the action by well-informed people
• permit more rapid response to external changes

Question 15

Which of the following characteristics is usually associated with organizations that use a decentralized structure?
a) Tight vertical control
b) Mass production
c) Change and uncertainty
d) Large number of hierarchical levels

Answer 15

c) Change and uncertainty

Question 16

What is departmentalization? What are the main approaches?

Answer 16

basis for grouping positions into departments and departments into the total organization

Approaches:
a) Functional
b) Divisional
c) Matrix
d) Team
e) Virtual network

Question 17

What is the functional approach to departmentalization? Other name for it? What are main org structure factors?

Answer 17

grouping activities by common FUNCTION from the bottom to the top of the organization
= based on similar skills, expertise, work activities, resource use
ex: accounting, manufacturing, HR

otjer name = U Form (unitary structure)

Factors
- vertical
- centralized
- coordinate work within dept
- rules and procedures governduties
- lower empl accept auth of those higher up

Question 18

What are some pros and cons of functional structure?

Answer 18

Pro
- economies of scale and efficient resource use
- help empl develop in-depth skills bc working on variety of things and interact with experts in dept
- centralized = org has unified direction

Con
- separation across depts = poor commuication and coordination across depts = slow response to ecternal changes
- decisions abt more than one dept may pile up at top of org and be delayed

Question 19

What is the divisional approach to departmentalization? Other name for it? What are main org structure factors?

Answer 19

Diverse departments are brought together to produce a single organizational output, whether it is a product, a program, or a service to a single customer
= Focuses company activities on local market conditions
= Competitive advantage: selling a product adapted to a given country

other name: M-form (multidivisional)/decentralized form/product structure/program structure/self-contained unit structure

factors
- division = self-contained unit with functional structure
- chain of command converges lower :. decisions made at divisional rather than top exec level
–> decentralized

Question 20

What are some pros and cons of divisional structure?

Answer 20

Pros
- good when org produces products for diff markets bc each division is autonomous biz (ex: P&G with beauty div, home div, etc)
- good next step for functional org getting too big (bc comminication across whole org becomes big problem)
- more flexible and rsponsive to change bc units are smaller
- better coordination within unit
- empl more concern for cust needs bc focused only on one product/area

cons
- coordination across divisions is poor (divs may go in opposite directions)
- DUPLICATION OF RESOURCES + DEPTS
- smaller depts in each div can mean less technical, specialized knowledge

Question 21

What is the matrix approach to departmentalization? What are main org structure factors? Who manages the whole org?

Answer 21

combines both functional and divisional approaches simultaneously, in the same part of the organization (goal is to improve horizontal coord and info sharing)
–> vertical structure provides traditional control within functional departments, and the horizontal structure provides coordination across departments

factors
- formal chain of command for both functional (vertical) and divisional (horizontal) relationships
- some employees have 2 bosses (violating unity of command concept)
–> empl need to work with both to reach joint decisions

whole org: top leader - oversees both product/geographic and functional chains of command

Question 22

What are some pros and cons of matrix structure?

Answer 22

pros
- effective in rapodly changing env where org need to be flexible
- efficient use of HR bc specialists can be transferred one div to another

cons
- dual chain of command CONFUSION
- high level of conflict bc div and functional goals are fighting against each other
- time lost in meetings etc to resolve conflicts/decisions concerning the two areas

Question 23

What are the types in the team approach to departmentalization?

Answer 23

Cross-functional teams: employees from various functional departments, meet as a team and resolve mutual problems (ex: one mktg, finance, HR, per product line)
– used: for change projects, such as new product or service innovation (still report to orig depts though)

Permanent teams: groups of employees organized similar to formal department, together to complete specific org task

Team-based structure: the entire organization is made up of horizontal teams that coordinate their work and work directly with customers to accomplish the organization’s goals (ex: Zappos)

Question 24

What are some pros and cons of teams structure?

Answer 24

pros
- break down barriers across depts
- improves coordination + cooperation
- team members know each others issues so mor eeunderstanding + helpful
- quick adaptaion + decision making
- morale :) ppl are happy in bigger project teams compared to narrow dept tasks
- can get direct cust feedback

cons
- conflicts within teams
- dual loyalties (team and dept)
- lots of meeting time
- too decentralized sometimes (senior mgmt becomes useless and teams may make decisions good for them but not org bc disconnected from overall org goals)

Question 25

What is the virtual network approach to departmentalization? Why do this?

Answer 25

subcontract most major functions to separate companies, coordinate these activities from a small org at headquarters (ex: outsource mark to Canada, manuf to China, customer service to India)

why: do more with less! company can concentrate on what it does best and contract out other activities to companies with distinctive competence in those specific
areas

Question 26

What are some pros and cons of virtual network structure?

Answer 26

pros
- flexibility and competitiveness on a global scale (org can continually redefine itself to meet new product + mkt opportunities)
- draw on resources and expertise worldwide
- lean af, little supervision, dont need big teams of staff + admin

cons
- lack of hands-on control (netowrk partners act in self-interest, so mgers have to align those with mutually beneficial partnerships)
- weak and ambiguous boundaries = more uncertainty and harder to define goals, manage relationships, motivate empls, coordinate
- empl loyalty can weaken when realize they can be outsourced
= less cohesive corp culture, more turnover

Question 27

What is coordination? collaboration? Do orgs always need these?

Answer 27

Coordination: the MANAGERIAL TASK of synchronizing the diverse activities across departments (managing collaboration)

Collaboration: joint effort between people from two or more departments to produce outcomes that meet a common goal or shared purpose and that are typically greater than what could be achieved working alone

yes orgs always need them regardless of structure bc need avoid conflucts and ensure all parts working toward main org goals

Question 28

How does coordination and collaboration affet international companies?

Answer 28

makes it more difficult because org units differentiated not only by goals and work activities, but also now by geographic distance, time zone differences, cultural values, and perhaps language

Question 29

how do org structures evolve? what is reengineering?

Answer 29

they get larger and have growing emphasis on horizontal coordination, shift away from strictly functional and divisional st4ructures that dont have good coordination

re-engg = radical redesign of business processes to achieve dramatic improvements

leads to a shift away from a strong vertical structure to stronger horizontal coordination

Question 30

What is a task force? project manager? HOw is a cross-functional te4am different from a task force?

Answer 30

Task force: temporary team or committee designed to solve a problem involving several departments (oft experts in functional groups) (return to main job once problem solved)

Project manager: person responsible for coordinating activities of several departments for the completion of a specific project **not a member of one of the departments being coordinated (ex: general mills has proj manager for each prod line)

team: more permanent, tackling a problem that is ongoing or occurs regularly

Question 31

What is relational coordination? What defines org wit high relational coord?

Answer 31

frequent horizontal coordination and communication carried out through ongoing relationships of shared goals, shared knowledge, and mutual respect
= Highest level of horizontal coordination!

NOT a structural device such as a project manager, INSTEAD part of fabric and culture of org

high rel coord org:
- people share information freely across departmental boundaries
- interact on a continuous basis to share knowledge and solve problems

Question 32

HOw do orgs increase collaboration?

Answer 32

• put ppl in close proxiity to each other
• training for ksills needed to interact and solve problems based on shared goals
• base rewards on team accomplishments

Question 33

How does structure influence strategt and biz performance?

Answer 33

STRUCTURE FOLLOWS STRATEGY
= biz performs better when structure aligns with chosen strategy + needs of env
(ex: differentiation strategy = need innovation = decentralized, flat = teams structure ish)

Question 34

What is mechanistic vs organic organiaation? Related structuress?

Answer 34

Mechanistic organizations: efficiency is the goal, stable environment
–> strucutre: rigid, vert, centralized, dcisions at top, high specialization, lots procedures + rules (often mass production)

Organic organizations: innovation is the goal, rapidly changing environment
–> strcture: horiz, decentralized, lwoer level empl have more auth and responsiblity (small batch or continuous process production)

Question 35

What is workflow technlogy? Who researched it best? What were their categories?

Answer 35

knowledge, tools, techniques, and activities used to transform organizational inputs into outputs

who: Joan Woodward

categories
- Small-batch production: firms produce goods in batches of one or a few products designed to customer specification, or large, one-of-a-kind products (ex: submarines)
- Mass production: standardized production runs of a large volume of identical products, have inventory (ex: clothing)
- Continuous process production: entire workflow is mechanized and runs without stopping (ex: nuclear - big cost and issue if prod stops)

Question 36

WHat is technical complexity? Which of workflow tech categories has high/low technical complexity?

Answer 36

= degree to which machinery is used in production without people

small batch = LOW tech complex.
–> human beings are a large part of the process, similar to traditional skilled-craft work

mass prod = higher tech complex
–> machines do most physical work, complemented by humans (ex: automobile assembly lines)

continuous = HIGH tech complex
–> entire workflow is mechanized in a sophisticated and complex form of production technology, human operators not part of it and simply read dials, fix machines that break down, and manage the production process