Chapter 11 Flashcards
Defining Organizational Structure?
Organizational Structure: How job tasks are formally divided, grouped, and coordinated within an organization.
Organizational chart: The visual representation of an organizations structure.
Exhibit 11.1 Purposes of Organizing?
Divides work to be done into specific jobs and departments.
Assigns tasks and responsibilities associated with individual jobs.
Coordinates diverse organizational tasks.
Clusters jobs into units.
Establishes relationships among individuals, groups, and departments.
Establishes formal lines of authority.
Allocates and deploys organizational resources.
Organizational Design?
Organizational design: The process of developing or changing an organization’s structure.
The process involves decisions about six key elements:
– work specialization
– departmentalization
– chain of command
– span of control
– centralization and decentralization
– formalization
Work Specialization?
Work Specialization: The degree to which activities in an organization are subdivided into separate job tasks; also known as division of labour.
Defining Organizational Structure (1 of 11):
Departmentalization and Chain of Command and Line of Authority
Departmentalization
Departmentalization: the basis on which jobs are grouped together
Chain of Command and Line of Authority
Chain of command: the continuous line of authority that extends from the top of the organization to the lowest level and clarifies who reports to whom.
What is span of control?
Span of Control: The number of employees who can be effectively and efficiently supervised by a manager.
The contemporary view of span of control recognizes there is no magic number.
Many factors influence the number of employees a manager can efficiently and effectively manage.
Skills and abilities of the manager and the employees.
Characteristics of the work being done.
Similarity and complexity of tasks.
The recent trend is toward larger spans of control, which is consistent with managers’ efforts to speed up decision making, increase flexibility, get closer to customers, empower employees, and reduce costs.
Exhibit 11.6 Contrasting Spans of Control Explained: Assumed there is 4096 members
Assuming a span of 4 on the left:
We start at the highest level of 1 and it has 1 member, than we multiply by 4 going down till we hit 4096 so level 7, 1-4-16-64-256-1024-4096
Assuming the span of 8 on the right:
We start at the highest level of 1 and it has 1 member, than we multiply by 8 going down till we hit 4096 so level 5, 1-8-64-512-4096
What is Centralization?
The degree to which decision making is concentrated at upper levels of the organization.
Organizations in which top managers make all the decisions and lower-level employees simply carry out those orders.
What is Decentralization?
The degree to which lower-level employees provide input or actually make decisions.
What is Formalization?
The degree to which jobs within the organization are standardized and the extent to which employee behaviour is guided by rules and procedures.
– Highly formalized jobs offer little discretion over what is to be done.
– Low formalization means fewer constraints on how employees do their work.
Exhibit 11.8 Mechanistic versus Organic Organization Explained:
Mechanistic:
High Specialization
Rigid Departmentalization
Clear Chain of Command
Narrow Spans of Control
Centralization
High Formalization
Organic:
Cross-Functional Teams
Cross-Hierarchical Teams
Free Flow of Information
Wide Spans of Control
Decentralization
Low Formalization
Contingency Factors Affecting Structural Choice (1 of 4)
Structural decisions
Top managers typically put a great deal of thought into designing an appropriate structure, which is dependent upon:
– the organization’s strategy.
– size.
– technology.
– degree of environmental uncertainty.
What are Traditional Organizational Designs? Simple Structure
Traditional Organizational Designs
Simple Structure:
An organizational structure with low departmentalization, wide spans of control, authority centralized in a single person, and little formalization.
What are Traditional Organizational Designs? Functional Structure
Functional Structure:
An organizational structure that groups similar or related occupational specialties together.
Chart explained:
Headquarter: Top Manager
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Branches out to 4 Departments of:
Operations, Marketing, R&D, Sales
What are Traditional Organizational Designs? Divisional structure
Divisional structure:
An organizational structure that consists of separate business units or divisions.
P&G structure prior to 2013 chart explained:
President: Top of the chart
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Breaks into 5 groups:
Baby, Health, Beauty, Food, Admin & Finance Division
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Each of these units covers there own divisions unique to them, they may similar departments (R&D) but that R&D is unique to that division
