Chapter 13 Flashcards
organizational structure
the division of labor as well as
the patterns of coordination,
communication, workflow, and formal power that direct organizational activities
What are the two fundamental aspects of organizational structure?
Division of Labor – Subdividing work into separate tasks assigned to different people, leading to job specialization.
Coordination of Work – Ensuring that departments and groups work in sync to achieve organizational goals.
As companies get larger, horizontal division of labor is almost always accompanied by….
vertical division of labor
What does “division of labor” refer to, and what are its advantages?
It refers to subdividing work into separate jobs assigned to different people.
Advantages:
- Leads to job specialization.
- Increases work efficiency.
- Allows better matching of
- individuals’ skills to tasks.
How is coordination of work achieved in an organization by informal communication?
Management ensures different departments and groups work in sync through informal communication and liaison roles.
Key Roles:
Liaison Roles – Share information between departments. People who act as bridges between teams that don’t usually talk. But today, digital communication makes this less necessary.
Integrator Roles – Coordinate work across departments, encouraging information sharing and informal coordination. These people connect different teams to make sure they are working well together.
Why are liaison roles less common today?
digital communication and decentralized decision making have made it easier and more acceptable for the leaders and staff of work units to informally communicate directly with their counterparts in other work units
What is concurrent engineering and how does it work?
Another mechanism for supporting coordination through informal communication.
It involves organizing employees from multiple departments into temporary teams, where each team simultaneously works on their specific tasks to create a product or service.
Informal communication
Sharing information on mutual tasks; forming common mental models to synchronize work activities.
Strategies:
* Direct communication
* Liaison roles
* Integrator roles
* Temporary teams
Formal hierarchy
Assigning legitimate power to individuals, who then use this power to direct work processes and allocate resources
Strategies:
* Direct supervision
* Formal communication channels
Standardization
Creating routine patterns of behavior or output
Strategies:
* Standardized skills
* Standardized processes
* Standardized output
What is formal hierarchy and what are its limitations?
Formal hierarchy assigns legitimate power to individuals to direct work processes.
Limitations:
- Coordination difficulties in complex situations.
- Managers can only supervise a limited number of employees.
- Micromanagement complaints, as today’s workforce prefers more autonomy.
What is standardization in organizational structure and how is coordination achieved?
Standardization involves creating routine patterns of behavior through rules, procedures, training, etc.
- Standardized Processes – Best for routine tasks. (Flowcharts is an example)
- Standardized Outputs – Individuals have clearly defined goals and output measures. Specifies product/service requirements.
- Standardized Skills – When workactivities are too complex. Ensures employees have necessary knowledge and skills for complex tasks. Training is also a form of standardization through skills
What happens when the division of labor increases?
Coordination becomes more expensive and difficult. Companies specialize jobs up to the point where coordination costs aren’t prohibitive.
span of control
the number of people directly reporting to the next level above in the hierarchy
how does span of control affect organizational structure?
Wide Span = Fewer layers of management (flatter structure). possible when employees perform routine jobs
Narrow Span = More layers of management (taller structure). When employees perform novel or complex tasks
What factors influence the span of control?
- Self-management and coordination through standardized skills.
- Routine vs. Novel Tasks – Novel tasks require a narrow span.
- Interdependence – Highly interdependent jobs need a narrower span.
What are the disadvantages of a tall structure (more layers)?
Lower-quality, delayed information.
Higher overhead costs.
Employees feel less empowered and engaged.
What are the disadvantages of flat structures (fewer layers)?
Managers may struggle to translate strategy into daily operations.
Less time for coaching or resolving conflicts.
Limited opportunities for developing managerial skills.
centralization
the degree to which formal
decision authority is held by
a small group of people, typically those at the top of the organizational hierarchy
What is the difference between centralization and decentralization?
Centralization: Decision authority is concentrated at the top.
Decentralization: Decision authority is spread throughout the organization, allowing lower levels more power.
formalization
the degree to which organizations standardize behavior through rules,
procedures, formal training, and related mechanisms
mechanistic structure
an organizational structure with a narrow span of control and a high degree of formalization and centralization
What is departmentalization and how are employees grouped?
Departmentalization refers to how employees and their activities are grouped together. This can be done by function, product, geography, or client.
What are the different types of organizational structures?
- Simple Structure: Few hierarchies, flexible roles.
- Functional Structure: Organized by specific skills or knowledge areas.
- Divisional Structure: Organized by product, geography, or client.
- Team-Based Structure: Organized around self-directed teams.
- Matrix Structure: Combines two structures for flexibility.
- Network Structure: Alliance of organizations working together on a product or service.
organic structure
an organizational structure
with a wide span of control, low formalization, and decentralized decision making
What are the advantages and disadvantages of a functional structure?
Advantages:
Economies of scale.
Supports professional identity and career paths.
Easier supervision.
Disadvantages:
Dysfunctional conflict.
Poor coordination and understanding of the overall company.
Machanistic structure has a:
Wide or narrow span of control
Centralized or decentralized decisionmaking authority
High or low formalization
Narrow
Centralized
High
What are the advantages and disadvantages of the divisional structure (M-Form)?
Advantages:
Focus on markets/products/clients.
Supports growth or strategy.
Disadvantages:
Resource duplication.
Reduced ability to share knowledge across divisions
Organic structure has a:
Wide or narrow span of control
Centralized or decentralized decisionmaking authority
High or low formalization
Wide
Decentralized
Low
functional structure
an organizational structure
in which employees are
organized around specific
knowledge or other resources
What are the pros and cons of a team-based structure?
Pros:
Increased collaboration and productivity.
Cons:
Costly to maintain.
Time-consuming coordination.
Increased ambiguity and stress.
What are the advantages and disadvantages of a matrix structure?
Advantages:
Improves communication and flexibility.
Ideal for fluctuating workloads.
Disadvantages:
Conflicts among managers.
Ambiguous accountability.
divisional structure
an organizational structure
in which employees are organized around geographic areas, outputs (products or services), or clients
3 types of divisional structure
Geographic divisional structure
Product divisional structure
Client divisional structure
team-based structure
an organizational structure built around self-directed teams that complete an entire piece of work
What is a network structure and how does it use core competencies?
A network structure is an alliance of organizations working together. Companies focus on their core competencies (skills that give them a competitive edge) and outsource non-critical tasks.
What are the main contingencies that influence organizational design?
- External Environment: Dynamics, complexity, diversity, and hostility.
- Organizational Size: Larger organizations require decentralization.
- Technology: Task variability and analysability guide structure.
- Organizational Strategy: Structure follows strategy.
matrix structure
An organizational structure that overlays two structures (such as a geographic divisional and a product structure) in order to leverage the benefits of both
network structure
an alliance of several organizations for the purpose of creating a product or serving a client
External environment:
Dynamic versus stable
What is the recommendation?
Organic structures are better in dynamic environments; mechanistic structures are usually more effective for stable environments.
External environment:
Complex versus simple
Recommendation:
Organizations should be more decentralized as environments become more complex
External environment:
Diverse versus integrated.
Recommendation:
A divisional structure aligned with the highest form of diversity tends to work well in diverse environments.
External environment:
Hostile versus munificent
Recommendation:
Organic structures are more suitable for hostile environments; mechanistic structures are usually more effective in munificent environments.
Organizational size
Recommendation:
As companies grow, they should make greater use of standardization for coordination and should become more decentralized.
Technology: Task variability
and task analyzability
Recommendation
Organic structures are better where tasks have high variability and low analyzability; mechanistic structures
are better where production involves low variability and high analyzability tasks.
Organizational strategy
Recommendation
Organic structures are better when the company’s strategy is to compete through innovation, a more mechanistic structure is preferred when the organization chooses a low-cost strategy.
How does the external environment influence organizational structure?
Key factors:
- Dynamism: High dynamism = Organic structure, low dynamism = Mechanistic structure.
- Complexity: High complexity = Decentralized, low complexity = Centralized.
- Diversity: High diversity = Divisional structure, low diversity = Centralization.
- Hostility: High hostility = Organic structure and decentralization.
organizational strategy
The way the organization positions itself in its environment in relation to its stakeholders, given the organization’s resources, capabilities, and mission
