Lecture 7: Formal and informal structure

Question 1

Types of Departmentalization

Answer 1

Pooled, sequential, reciprocal

• they differ on the level of interdependence ( from low to high)
• see slide 13

Question 2

Departmentalization by structure

Answer 2

Functional ( division by departments like reserch dep, sales dep…)
Structural division can be by product, customer, geography, process ( for ex: each product will have its own sales, hr..departament)

Question 3

Disadvantages of a matrix structure from OB perspective

Answer 3

Misaligned goals 
Difficult to manage motivation
Lack of role clarity 
Uncertainty, stress
Ambiguous authority 
Power struggles

Question 4

Different coordination mechanisms for different tasks

Answer 4

( decrease in the level of formalization/ increase in task uncertainty, lower it is in a list)
-Rules
Assumption: We can anticipate all situations and know how to best handle them in advance
-Plans
Assumption: We can anticipate most situations but know that something unexpected might happen•
- Hierarchy
Assumption: The manager knows how to best approach the task and can handle unexpected situations
-Mutual agreement
Assumption: No single person knows how to best approach the task and cannot (yet) anticipate the challenges the task will bring

Question 5

What is the importance of social capital

Answer 5

• companies become less hierarchical (more horizontal coordination mechanisms)
• Formal authority is not sufficient, managers have to develop zones of influence, which depend on their social capital.

Question 6

What is the difference between the cohesive structure and blockage?

Answer 6

• Brokerage =Bridging two unconnected groups or individuals
• In a cohesive structure, the individuals are usually interconnected
  ( see slide 33)

Question 7

Benefits and liabilities of cohesive structure

Answer 7

Key benefits:
Facilitates trust development
Reputation as a social control mechanism
Easier information flow and coordination
Liabilities: 
- Groupthink 
- social control works both ways 
- redundant information

Question 8

Benefits and liabilities of open Structure(Brokerage*)

Answer 8

Benefits:
Early information
Diverse information
Higher autonomy
Control over flow of information and resources
Liabilities:
Illegitimacy discount – “not really one of us”
Information overload
Role overload from dealing with multiple audiences

Question 9

How do informal networks emerge?

Answer 9

1. external drivers:
   - Formal structure (work assignments, reporting and peer relationships)
   - Proximity
   - Homophily (similarity in demographics, values, knowledge, skills…)
2. Network-internal drivers:
   - Reciprocity
   - Closure (friends of friends meet)
   - Informal status dynamics (popular individuals become more popular
3. Individual agency:
   - Networking behaviors

Question 10

What are external drivers that form an informal network?

Answer 10

• Formal structure (work assignments, reporting and peer relationships)
• Proximity
• Homophily (similarity in demographics, values, knowledge, skills…)

Question 11

What are internal drivers that form an informal network?

Answer 11

• Reciprocity
• Closure (friends of friends meet)
• Informal status dynamics (popular individuals become more popular)

Question 12

Hierarchy is

Answer 12

Hierarchy: How many layers of management?

Question 13

Centralization/decentralization is

Answer 13

At what layers of the hierarchy are decisions made

Question 14

Research evidence is hierarchy is functional

Answer 14

Hierarchy overall negative for group outcomes
•More negative with increasing task interdependence, membership instability, expertise differentiation, and hierarchy mutability
•Less negative with increasing task ambiguity

Question 15

Increasing task uncertainty & need for innovation should result is what kind of structure?

Answer 15

organic structure

Question 16

Organic structure should be implemented when

Answer 16

The organization has Increasing task uncertainty & need for innovation

Question 17

How does task interdependence affect hierarchy

Answer 17

Higher the interdependence –>more coordination –> closer they should be in the organizational hierarchy

Question 18

How does the size of the organization affect the specialization of members, hirarchy ect.

Answer 18

Larger the size

• -> more specialized members should be
• -> more hierarchical levels it should have
• -> More formalized it should be
• -> more decentralized it should be ( decisions are made at different levels)

Question 19

Grater innovation level more … the structure should be

Answer 19

organic

Less innovation –> more mechanistic it should be

Question 20

Grater task uncertainty more … the structure should be

Answer 20

organic

Question 21

What kind of organization does organic structure fits

Answer 21

• innovative

- high on task uncertanity

Question 22

What should organizations with high, medium and low diversification implement?

Answer 22

High diversification –> more decentralization, reward based on performance if the division (их отдела)
Medium diversification ( where products are independent but related in some way) –> functional structure where cost and control is the main goal, and divisional structure where sales growth is the main goal ( functional product matrix structure)
Hight diversification –>