Chapter 14 - Organizational Structure Flashcards
organizational structures
formally dictates how jobs and tasks are divided and coordinated between individuals and groups within the company
organizational chart
is a drawing that represents every job in the organization and the formal reporting relationships between those jobs
It helps organizational members and outsiders understand and comprehend how work is structured within the company
key elements of an organizational structure
work specialization
represents the degree to which tasks in an organization are divided into separate jobs
to some degree, work specialization is a never-ending trade-off among productivity, flexibility, and worker motivation
key element of an organizational structure
chain of command
specifies who reports to whom and signifies formal authority relationships
The chain of command can be seen as the specific flow of authority down through the levels of an organization structure
key element of organizational structures
span of control
represents how many employees each manager in the organization has responsibility for
narrow-less people
wide- more people
key elements of organizational structures
centralization
refers to where decisions are formally made and organizations
If only the top managers within a company have the authority to make final decisions, we would say the organization has a highly “centralized” structure
In contrast, if lower level companies are given authority to make decisions, and organization has a “decentralized” structure
key elements of organizational structures
formalization
is the degree to which rules and procedures are used to standardize behaviors and decisions in an organization
Although it is not something you can necessarily see on an organizational chart, the impact of formalization is felt throughout the organization
mechanistic organization
are efficient, rigid, predictable, and standardized organizations that Thrive and stable environments
High degree of work specialization; employees are given a very narrow view of the tasks they are to perform
Very clear lines of authority; employees know exactly to whom they report
High levels of hierarchy control; employees are not encouraged to make decisions without their managers consent
organic organizations
are flexible, adaptive, outward-focus organizations that thrive in Dynamic environments
Low degree of work specialization; employees are encouraged to take a broad view of the tasks they are to perform
Weak Chain of Command
Knowledge and expertise are decentralized; employees are encouraged to make their own decisions when appropriate
organic structures in regard to transfomrational leadership
organic structures are more likely to allow for transformational leadership to have a positive effect on employees
why is mechanistic not negative?
being mechanistic is the only way for many organizations to survive, and it can be a highly appropriate and fruitful way to structure work functions
organizational design
process of creating, selecting, or changing the structure of an organization
Ideally, organizations don’t just let us structure develop on its own; they proactively designed it to match their circumstances and needs
business environment
is the outside environment, including customers, competitors, suppliers, distributors, and other factors external to the firm, which all affect organizational design
stable environments
don’t change frequently and any changes that do occur happen very slowly. Stable environments allow organizations to focus on efficiency and require little change over time
dynamic environments
change frequently and require organizations to have more adaptive structures
company strategy
is an organization’s objectives and goals and how it tries to capitalize on its assets to make money
technology
is the method by which an organization transforms inputs to outputs
company size
is the number of employees in a company
As organizations become larger, they need to rely on some combination of specialization, formalization, and centralization to control their activities, thereby becoming more mechanistic and nature
common organizational forms
simple structures
is an organizational form that features one person as the central decision-making figure
small accounting and law firms, family owned grocery stores, individually owned retail outlets, independent churches and landscaping services are all likely to use a simple structure
common organizational structures
bureaucratic structure
is an organizational form that exhibits many of the facets of the mechanistic organization
what are bereaucracies for
designed for efficiency and rely on high levels of work specialization, formalization, centralization of authority, rigid and well-defined chains of command, and relatively narrow spans of control
bearaucracy
functional structure
is the most basic bureaucratic structure and it is an organizational form in which employees are grouped by the functions they perform for the organization
As shown in the figure below a functional structure groups employees by the rules they fulfill in the organization
For example, employees with marketing expertise or group together, those with Finance Duties are grouped together, and so on
multi-divisional structure
an organization form in which employees are grouped by product, geography, or client
Each of these divisions operate relatively autonomously from the others and has its own functional group
multi-divisonal structure
product structure
groups business units around different products that the company produces
Each of those divisions become responsible for manufacturing, marketing, doing research and development for the product in its own division
Product structures make sense when firms diversify to the point that the products they sell are so different that managing them becomes overwhelming
multi-divisional structure
geographic structure
generally based on the different locations where the company does business
The functions required to serve a business or place under a manager who is in charge of a specific location
Reasons for developing a geographic structure revolve around the different tastes of customers in different regions, the size of location that need to be covered by different sales people, or the fact that the manufacturing and distribution of a product are better served by a geographic breakdown
multi divisional structure
client-based structure
A client-based structure is an organizational form in which employees are organized around serving customers
When organizations have a number of very large customers or groups of customers that all act in a similar way, they might organize their business around serving those customers
eg small bamks or consulting firms
matrix structure
is a complex form of organizational structure that combines a functional and multi-divisional grouping
things to understand about matrix structure
First, The Matrix allows an organization to put together very flexible teams based on the expertise and skills that their employees
Second, The Matrix gives each employee two chains of command, two groups with which to interact, and two sources of information to consider
effects of organizational structure on performance and commitment
Restructuring has a weak negative effect on job performance
Task performance tends to be somewhat lower in organizations that restructure
Not much is known about the impact of restructuring on citizenship Behavior or counterproductive Behavior
Restructuring has a moderate negative effect on organizational commitment
Effective commitment tends to be lower and organizations that restructure
Not much is known about the impact of restructuring on continuance commitment or normative commitment
