Chapter 6: Fundamentals of Organising Flashcards
When do you organize?
After strategic planning is done
What is organising?
Deployment of organisational resources
To achieve strategic goals
What is departmentalization
Basis for grouping positions
Positions into departments
Departments into total organization
How many traditional approaches are there?
3
What are the traditional approaches?
Functional
Divisional
Matrix
What are the innovative departmentalization approaches?
Team
Network
How to assess advantages or disadvantages?
Use of resources: efficient (economies of scale) or not
Technical Depth: specialization and development
Communication across divisions: barriers
Environment response: flexible and fast
Customer service
Decision concentration: delay, response time
Decision making: direction and control/unplanned decentralization
What does departmentalization create?
Chain of command
Reporting relationships
Organizational structure
How does different departmentalization approaches affect?
Employee goals
Employee motivation
How are activities grouped in a functional structure?
By common function
Or type of organizational resources
What are the advantages of a functional approach?
Efficient use of resources : economies of scale
In depth skill specialization and development
Top manager direction and control
What are the disadvantages of functional approach?
Poor communication across functional department
Slow response to external changes (lagging innovation)
Decisions concentrated at top hierarchy: delay
What are activities grouped based on in the divisional approach
Based on similar organizational outputs
What is the divisional structure also called?
M form
Multi divisional
Decentralized form
What are the types of divisional structure?
Product/services
Geographical region
Customer
What are the advantages of a divisional structure?
Fast response and flexibility to unstable environment
Fosters concern for customer need
Excellent coordination across functional departments
What are the disadvantages of a divisional structure?
Duplication of resources across divisions
Less technical depth and specialization
Poor coordination across divisions
How are activities divided in divisional approach, product and services?
By the type of product/services
When is division by geographical region used?
When operations/markets are
Physically dispersed
Non-interdependent
When is division by customer used?
company provides
Different services to different types of customers
What does the matrix approach involve?
Both functional and divisional structure
What is the matrix structure called?
Dual
Hence it has dual lines of authority
How do horizontal and vertical units work together?
The functional department operate as vertical units
Supporting the horizontal divisions
What are the advantages of a matrix approach
More efficient use of resources
Flexibility, adaptability or changing environment
Expertise available to all divisions: interdisciplinary cooperation
What are the disadvantages of a matrix approach?
Frustration and confusion from dual chain of command
High conflict between two sides of the matrix
Many meetings more discussion than action
When is team approach used?
Delegate authority quickly to lower levels
More flexible and responsive in a complex and competitive environment
How to use team approach?
Through cross functional teams
What are cross functional teams?
Employees from various functional departments meeting as a team to resolve problems
Advantages of a team approach?
Reduced barriers among departments: increased compromise
Shorter response time, quicker decisions
Better morale, enthusiasm from employee involvement
What are the disadvantages of a team approach?
Dual loyalties and conflict
Time and resources spent on meetings
Unplanned decentralization
What is the network approach?
Collaboration beyond the organization
Outsourcing/farming to loosely connected groups of companies