Lecture 3: Fundamentals of Organization Structure 3.1

Question 1

The three elements of organization structure

Answer 1

1. Formal Reporting Relationship
   - Number of levels in the hierarchy
   - Span of control of managers and supervisors
   => Structural framework or vertical hierarchy
2. Grouping of Individuals
   - Creation of departments
   => Structural framework or vertical hierarchy
3. Design of Systems and Processes
   - Effective communication, coordination, and integration of efforts across departments
   => Pattern of interaction among employees

Question 2

Traditional organizations

Answer 2

= designed for efficiency
- Centralized authority focused on top-level decision-making
- Mechanistic design -> Vertical information level
- Specialized tasks, formal reporting systems, few inter-departmental teams

Question 3

Learning organizations

Answer 3

= emphasizes communication and collaboration
- Decentralized authority focused on shared tasks and decisions
- Organic design -> horizontal information flow
- Shared tasks, few rules, face-to-face communication, many inter-departmental teams

Question 4

How to make sure that the organization consistently executes its strategy?

Answer 4

Vertical linkages I
= Coordinate activities between the top and the bottom of the organization

• Hierarchical referrals are the vertical lines that identify the chain of command
• Rules and Plans create vertical links
• Reports, computer systems, and written information are vertical information systems to increase vertical information capacity

Horizontal linkage —-
= Coordinates activities across organizational departments that are not traditionally drawn on the organizational chart

• Information Systems
• Liaison Roles
• Task Forces
• Full-time Integrator
• Teams

Question 5

Example of a Structural innovator

Answer 5

Apple
- collaborative company
- no committees
- start-up liked organized
- high autonomy of teams