Org structure ch 16 Flashcards
Centralisation
Formal decision making authority is held by a few people, usually at the top
Decentralisation
Decision making authority is dispersed throughout the organisation
Departmentalisation specifies
how employees and their activities are grouped together
Division of labor is
- Subdividing work into separate jobs assigned to different people
- limited by ability to coordinate work
- Potentially increases work efficiency
- Necessary as company growth and work becomes more complex
Divisional Structure
Organizes employees around outputs,clients, or geographic areas
Divisional structure Good vs Bad
Benefits:
- Building block structure – accommodates growth
- Focuses on markets/products/clients
Limitations:
- Duplication, inefficient use of resources
- Specializations are dispersed–silos of knowledge
- Politics/conflict when two forms of equal value
Elements of org structure
- Span of control
- Centralization
- Formalization
- Departamentalization
Formalisation is
The degree to which organizations standardize behavior through rules, procedures, formal training, and related mechanisms.
Increases with orgs age size and regulation
Functional org structure
Organizes employees around specific knowledge or other resources (e.g., marketing, production)
Functional structure good vs bad
Benefits:
- Economy of scale
- Supports professional identity and career paths
- Easier supervision
Limitations:
- More emphasis on subunit than organizational goals
- Higher dysfunctional conflict
- Poorer coordination – requires more controls
Matrix structure
Employees are temporarily assigned to a specificproject team and have a permanent functional unit
Matrix structure Good/bad
Benefits:
- Uses resources and expertise effectively
- Improves communication, flexibility, innovation
- Focuses specialists on clients and products
- Supports knowledge sharing within specialty
- Solution when two divisions have equal importance
Limitations:
- Increases goal conflict and ambiguity
- Two bosses dilutes accountability
- More conflict, organizational politics, and stress
Mechanistic Structure
- Narrow span of control
- High fromalization
- high centralization
Network structure
Alliance of firms creating a product or service
Supporting firms beehived around a “hub” or “core” firm
Network structure Good/Bad
Benefits:
- Highly flexible
- Potentially better use of skills and technology
- Not saddled with same resources for all products
Limitations:
- Exposed to market forces
- Less control over subcontractors than in-house
Org structure is:
Division of labor and patterns of coordination, communication, workflow, and formal power that direct organizational activities
Organic structure
- Wide span of control
- little formalization
- decentralised decisions
Problems with flatter hierarchies:
- Undermines management functions
- Increases workload and stress
- restricts management career developement
Problems with formalisation
- Reduces organizational flexibility
- Discourages organizational learning/creativity
- Reduces work efficiency
- Increases job dissatisfaction
Problems with tall hierarchies
- Overhead costs
- Worse upward information
- Focus power around managers, so staff less empowered
Span of control is
- Number of people directly reporting to the next level
(Assumes coordination through direct supervision) - Wider span of control possible when:
1. Other coordinating mechanisms present
2. Routine tasks
3. Low employee interdependence
Team based structure
- Self-directed work teams
- Teams organized around work processes
- Typically organic structure
- Usually found within divisionalized structure
Team based structure Good/bad
Benefits:
- Responsive, flexible
- Lower admin costs
- Quicker, more informed decisions
Limitations:
- Interpersonal training costs
- Slower during team development
- Role ambiguity increases stress
- Problems with supervisor role changes
- Duplication of resources
When companies get bigger
- taller hierarchy
- Widen span
Different forms of divisional structure
- geographic
- product structure
- client structure
Three factors of departamentalization
- establish chain of command
- Creates common mental models, measures of performance etc
- Encourages coordination through informal communication
Why is there a movement away from gerorefical form
- less need for local representation
- reduced geographic variation
- More global clients
