Organisational Structure and Design Flashcards
How is organisational structure studied?
Exploring structure in terms of work specialisation, span of control, departmentalisation, decentralisation and formalisation
What are the types of organisational design?
- Bureaucratic approach (Max Weber): meaning, advantages alongside disadvantages and persistence
- Alternative approaches
What is organisational structure?
- Form system of task and reporting relationships that control, coordinate and motivate employees to work together to achieve organisational goals (H and B)
- Formal and explicit indication to members of what is expected of them (Lorsch, 1977)
How is organisational structure visualised?
In organisational charts
Why study organisational structure?
- All businesses have to organise what they do
- A clear structure makes it easier to see which part of the business does what
- Helps understand human behaviour
What is span of control?
The number of subordinates a manager can efficiently and effectively direct
What is work specialisation?
The degree to which tasks in the organisation are subdivided into separate jobs
How does Taylorism/Fordism relate to work specialisation?
Makes efficient use of employee skills. Increases employee skills through repetition
What is departmentalisation?
The basis by which jobs are groups together, grouping activities by function, division (product/service), division (geography), matrix
What is a functional structure?
Organises employees around skills or other resources e.g HR, marketing, manufacturing
What is a divisional structure (product/service)?
Organises employees around products or business segments
What is a divisional structure (region)?
Regional structure groups employees together based on specific geographic location. This is often used by large companies
What is a matrix structure?
It has a two way flow of authority and responsibility.
Vertically - from superior to subordinate (creates stability and certainty for people working in the same unit)
Horizontally - from each employee to project manager who oversees the successful completion of the project
What are examples of matrix structures?
ENGIE - French global energy company, divided by region
BT Group - divided by consumer, business and public sector
General Electrics, IBM and P and G have successful matrix structures
How can there be conflicts within matrix structures?
Conflicts among product, geographic and functional divisions: people do not recognise a boss
How can there be power struggles within matrix structures?
Power struggles due to dual command - needs to be a balance of power and mechanisms for checking for imbalances
How can there be confusion with the decision making process in matrix structures?
Confusion with group decision making process - it isn’t the same as group decision making - decisions might have to be run by several members of the team but not all and others may feel their time is wasted listening to the process
Why does a matrix structure collapse during economic slow down?
Matrix collapse during economic slowdown - too complex
How can excessive overhead be a problem of a matrix structure?
High costs associated with matrix structures. This is because overhead costs rise due to duality of command.
Why can there be uncontrolled layering within a matrix structure?
- Matrices lie within matrices which lie within matrices resulting from the power dynamics rather than the logic of design
- They cascade down the org and filter through several levels and across several decisions, without a logic and rationale behind it
What is naval glazing as a problem of matrix structures?
Managers in a matrix can succumb to excessive internal preoccupation and lose touch with the marketplace
Getting absorbed in internal relations at the expense of paying attention to the clients
More energy spent ironing out disputes
What is decision strangulation as a problem of matrix structures?
Too much democracy, not enough action. Endless delays for debate, for clearing with everyone. Decisions made too late to be of use.
How is effective resource coordination a positive aspect of a matrix organisation?
Functional supervisors focus on hiring, training and managing employees in their field, while project supervisors can focus on achieving the goals of their specific projects or products
How is breadth of skill a positive aspect of a matrix organisation?
When isolated in a functional area, employees may have more difficulty benefiting from the skills and experiences of those in other areas.
In a matrix structure, employees have constant contact with members of other functional areas via their project teams. This helps them to develop a wider skill set
How is communication a positive aspect of a matrix organisation?
Since employees have constant contact with members of different functional areas, the matrix structure allows for information and resources to travel more fluidly between those functional areas, allows for the better handling of complex challenges
How is there more flexibility in a matrix organisation than un other organisational structures?
The matrix structure allows for HR to be shared across different projects or products. Functional areas maintain a stock of talented employees to meet project requirements.
How can managers prevent conflict among functional and product managers in a matrix structure?
- Should not rely too much on an informal or latent matrix to coordinate critical tasks
- Relationships between functional and product managers should be explicit so that people are in agreement about roles
How can managers avoid power struggles in a matrix structure?
- Ensure equal power dimensions and dynamics for decision making
- Have institutional point of view
- Replace weak managers with strong ones
- Monitor and manage to whom duelling manager reports to
How can managers avoid matrix structures being seen as a group decision making process?
- Education on what a matrix is and what it is not
- Top managers need to accompany their strategic choice to move toward a matrix with educational effort to clarify roles
How can managers avoid a matrix collapsing during an economic crisis?
- Employing general managerial excellence, independent of the matrix, long before the crunch arrives
- Good planning, can often forecast downturns in economic cycle
How can managers avoid too many overhead costs in a matrix structure?
- Carefully recruiting employees with correct skill sets
- Setting up a matrix of functional specialists against client or account managers -provides availability for assignments
- Can easily bill the time of consultants to the client, otherwise the time of consultants will be billed against the company
How can uncontrolled layering in a matrix structure be avoided?
- Careful task analyses
- Reduced power struggles
What should managers be aware of to prevent navel glazing?
- Level of complaints from customers
- Level of internal conflict
- Importance of external relationships over internal relationships
How should managers deal with naval glazing?
Find a balance of inward and outward focus
How can decision strangulation in a matrix structure be avoided?
- Learn to delegate before each decision has to be cleared in too many meetings
- Appeal the issue up a level of the managers to whom the focal employe e reports to
- Avoid managers who feel they need to make unilateral decisions
What is centralisation?
Managers at the top of the organisation make decisions
What is decentralisation?
The dispersion of authority, decision making is shared across business units
What is formalisation?
The extent to which there will be rules and regulations to direct employees and managers, a formalised structure defines responsibilities and roles
What is organisational design?
Process of choosing and implementing structural configuration through which the organisation seeks to accomplish their goals (H and B 2013)
What are the disadvantages of a bureaucracy?
- Lack of motivation
- Employees like a cog in a machine
- Low levels of customer service
- Challenges for innovation and change
- Slow decision making
- Goal displacement
- Conflict
- Mock bureaucracy
- Emphasis on efficiency over morality
How does Weber suggest there are three types of authority?
- Traditional authority: established authority of institutions
- Charismatic authority: personal authority of individuals
- Legitimate authority: based on knowledge, written rules, most rational and efficient from
What are new forms of organising as strategic choices?
- Boundaryless organisation (Jack Welch, GE): flexibility, collaborative relational structures, cooperation, strategic alliances
- Virtual organisation structures - use of technologies to transcend physical, geographical, temporal structures
What is the case of Valve; ‘‘Flatland”?
Valve’s handbook detailing its unusual structure; no founder/president, you steer toward opportunities and away from risks with no one to report to
What are flexible working arrangements?
- Teleworking - working at home
- Telecommuting - split between work at home and at work
- Flexitime - arriving late, leaving early
What did Reuters (2016) find about the New Office of 2020?
- By 2025, 75% of all employees will be millennials (Deloitte)
- Employees expected to use their own devices for work
- Spread of mobile devices and rapid uptake of cloud computing
- 63% of those who frequently check emails outside traditional work time say they are thriving
What did Flexjobs find in September 2016?
- 65% of respondants to a survey said remote work would boost their productivity
- 51% of participants prefer to work at home with flexible work hours
- Antidote for commute stress, work life balance issues, meeting overload, workplace distractions, office politics and interrupting colleagues
What did BBC news find in January 2017?
- Flexible work practice to contribute £165m for working parents and £250m for non parents
- Tendency to discriminate flexible work practices against non married couples
