Ch. 14 Organizational Structure Flashcards
What is Organizational Structure
How job tasks are formally divided, grouped and coordinated
What are the key elements of Organizational Structure?
Work specialization
departmentalization
Chain of Command
Span of control
Centralization and Decentralization
Formalization
Work Specialization
the degree to which tasks in the organization are subdivided into separate jobs
Departmentalization
The basis by which jobs are grouped together so that common tasks can be coordinated
Departmentalization Grouping
function
Product or service
geography
process
Customer
Hybrid of 2 or more
Chain of Command
Unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom
Span of Control
the number of subordinates a manager can efficiently and effectively direct
tend toward wider or larger spans of control
Wider or Larger span of control (7+)
-Increase organizational efficiency
-If it is too wide, supervisors may not have time to provide the necessary leadership and support
Narrower or Smaller spans of control (2-6)
Managers maintain close control
May encourage overly tight supervision and discourage employee autonomy
Increases complexity of vertical communication
Centralization
The degree to which decision-making is concentrated at a single point in the organization (i.e top managers)
Decentralization
The degree to which decision-making is spread throughout the organization (i.e lower level personnel make more decisions)
Formalization
The degree to which jobs within the organization are standardized
High Formalization
Characterized by explicit job descriptions, organizational rules, clearly defined procedures
Mechanic Model
High Specialization
Rigid Departmentalization
Clear Chian of Command
Narrow Spans of Control
Centrilization
High Formalization
Organic Model
Cross-Functional teams
Cross-hierarchal teams
free flow of information
wide spans of control
Decentralization
Low formalization
Five Organizational Designs
Simple Structure
Bureaucracy
Matrix Structure
Virtual Organization
Boundaryless Organization
What is Simple Structure
A Structure characterized by a low degree of compartmentalization, wide spans of control, authority centralized in a single person, and little formalization
Simple Structure is Characterized by:
Low degree of departmentalization
Wide spans of control
little formalization
Simple Structure Strengths
Flexible
Inexpensive to maintain
accountability is clear
Simple Structure Weaknesses
-difficult to maintain in anything other than small organizations
-Decision-making can be delayed
-information overload if the span of control is too high
Bureaucracy is Characterized by;
-Tasks that are grouped into functional departments
-centralized authority
-Narrow Spans of Control
-Decision-making that follows the chain of command
-Formalized rules and regulations
What is Bureaucracy?
-Enables standardized activities to be performed in a highly efficient manner
-usually used for highly routine operating tasks achieved through specialization
-Closest mechanistic structure
Bureaucracy Potential Strengths:
-Functional Economies of Scale
-Minimum Duplication of equipment
-Standardized operations allow for centralized decision-making
Bureaucracy Potential Weaknesses:
-Subunit conflicts with organizational goals
-Obsessive concern with the rule
-Lack of employee discretion to deal with unfamiliar problems
Matrix Structure
A structure that creates dual lines of authority and combines functional and product compartmentalization
Matrix Structure Key Elements
+Gains the advantages of functional and product compartmentalization while avoiding their weaknesses
+Facilitate coordination of complex and independent activities
–Dual chain of command can cause stress, confusion, and power struggles
Virtual Organization
Small core organization that outsources major business functions
-Highly centralized with little/no departmentalization
Advantages of Virtual Organization
Provides maximum flexibility while concentrating on what the organization does best.
Disadvantages of Virtual Organization
Reduced control over the business
Boundaryless Organization
an organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams
Why do structures differ?
Strategy
Size
Technology
Environmental Uncertainty
Innovation Strategy
A strategy that emphasizes the introduction of major new products and services
Cost-minimization Strategy
A strategy that emphasizes tight cost controls, avoiding unnecessary expenses, and price cutting.
