Lecture 11: Chapter 13: Organizational structure Flashcards
What is organizational structure?
The division of labor and the patterns of coordination, communication, workflow and formal power, that direct the organizational activities
What are the two types of division of labor and what is the difference between them?
- Horizontal: more narrow task, people doing different tasks
- Vertical: more layers within an organization (manager overseeing tasks)
When is division of labor effective?
If the activities are coordinated. Often there’s a mix between horizontal and vertical division of labor
What are the 2 core aspects of organizational structure?
- Division of labor
- Coordinating work activities
What is coordinating of activities in an organization?
The ability to divide work among people who have to be coordinated or coordinate each other
What are 3 types of coordination of activities?
- Informal communication
- Formal hierarchy
- Standardization
What is informal communication in the coordination of work activities? Name 5 aspects
- Sharing info on mutual tasks
- Forming common mental models
- More flexible than formal communication
- Vital in non-routine, ambiguous situations
- Aided by direct communication, liaison/integrator roles, temporary teams
What is the difference between liaison and integrator roles?
Both are informal ways of communicating
Liaison: bridging 2 parties that normally don’t communicate with each other, not a particular common goal
Integrator: facilitate communication to work to common goal
What is formal hierarchy in coordinating activities? What are the 2 strategies?
Direct supervision with some individual having legitimate power over others.
Strategies:
1. Direct supervision
2. Formal communication channels
Why is a formal hierarchy not always suitable for complex situations?
It lacks quick adaptability
What is standardization in coordinating activities? What are the 3 strategies?
Creating routine patterns of behavior and output
Strategies:
1. Standardized processes (flowcharts)
2. Standardized outputs (customer satisfaction)
3. Standardized skills (training)
Why are liaison roles less common today?
Digital communication and decentralized decision making have made it easier and more acceptable for leaders and staff of work units to informally communicate directly with their counterparts in other work units
What is concurrent engineering?
Temporarily organize employees from several departments into cross-functional teams
What is the waterfall effect/over the wall effect?
Traditional product development suffers from inefficient coordination due to the lack of informal two-way communication and feedback
What are the 4 most important elements of organizational structure?
- Span of control
- Centralization
- Formailization
- Departmentalization
What is span of control? What does wide-flat and narrow-tall mean?
The number of people that directly report to the person who is on the next level in the hierarchy
Wide-flat: many direct reports, few levels in hierarchy
Narrow-tall: less direct reports, many levels in hierarchy
What are 3 problems of taller structures?
- Lower quality + timely upward information
- Cost
- Less empowerment and engagement
On what 3 things does the optimal span of control depend?
- Coordination mechanisms that are used (e.g. standardization)
- Type of tasks
- Interdependence of employees
What is centralization?
The degree to which formal decision authority is held by a small group of people
Centralization: decisions made by few people
Decentralization: decision making dispersed throughout the organization
What is formalization? Give some examples
The extent to which there is standardization of behavior
E.g. rules, procedures, training
What are advantages and disadvantages of formalization?
+: efficiency, compliance, consistency
-: less flexibility, learning, creativity, autonomy, job satisfaction, higher work stress
What is a mechanistic structure?
Organizational structure with a narrow span of control and high degree of formalization and centralization
What is an organic structure?
Organizational structure with wide span of control, low formalization and decentralized decision making
What are the differences between mechanistic and organic structures concerning environment, task variability/analyzability and strategies?
Environment:
- Mechanistic: stable and munificent
- Organic: dynamic and hostile
Task variability/analyzability:
- Mechanistic: high var, low anal.
- Organic: low var, high anal.
Strategies:
- Mechanistic: low-cost
- Organic: innovation
Which organizational structure is better for uncertain and dynamic environments?
Organic structures
What is departmentalization? What are the 3 functions?
Determines how the employees are grouped together.
- Establish chain of command and interdependencies
- Creates common mental models
- Encourages coordination by informal communication
What are the 6 structural forms of departmentalization?
- Functional
- Divisional
- Simple
- Team-based
- Matrix
- Network
(only study first 2 for exam)
What is a functional structure of departmentalization? Give a benefit and a downside
Functional = division of employees based on their specific knowledge/skills
–> +: Specialized groups can serve entire organization
–> -: Stronger focus on specific skills of employees rather than the product
What is a divisional structure of departmentalization? On which 3 things is it based? Give an example of each
Employees are grouped based on:
1. Geographical areas: china and VS department
2. End products/services: diabetes, cardiac/vascular, non invasive therapy
3. Client groups: media firms, general public, tax professionals, legal professionals
What is a advantage and a disadvantage of divisional structures?
+: good for growing companies, since new divisions can be added
-: inefficient use of resources and less knowledge is shared between divisions
What type of departmentalization structure does the VSPA have?
Divisional structure
What does it mean when you say there are contingencies to organizational designs? What are the 4 main contingencies?
Ideas or design that work well in a particular situation might not work as well in others
- External environment
- Organizational size
- Technology
- Organizational strategy
What is the contingency for complex and simple environments?
Complex: decentralization
Simple: centralization
What is the contingency for diverse vs. integrated environments?
Diverse: divisional structure and decentralization necessary
Integrated: divisional structure and decentralization less necessary
What is the contingency for dynamic vs. stable environments?
Dynamic: organic structure
Stable: mechanistic structure
What is the contingency for hostile vs. munificent environment?
Hostile: high competition, scarce resources. Organic structure
Munificent: ample resourses, low competition. Mechanistic structure
How does organizational size influence design? Name 4 aspects
In larger organizations:
- More job specialization
- More standardization
- More hierarchy
- More decentralization
What are the 2 contingencies related to technology?
- Task variability: how predictable a job is everyday
–> Low: routine work - Task analyzability: how much the job can be performed using known procedures and rules
–> Low: unique situations, few guidelines
Organic structure: high variability, low analyzability
Mechanistic structure: low variability, high analyzability
What is organizational strategy?
The way the organization positions itself in its environment in relation to its stakeholders, given the organization’s resources, capabilities and mission
It shapes characteristics of contingencies and the organization’s structure
How is technology relevant when designing an organizational structure?
It influences whether it should adopt an organic or mechanistic structure
