Organising Flashcards
What is Organisational Design?
When managers develop or change the organisation’s structure
What are the Six Key Elements in Organisational Design?
Work specialisation Departmentalisation Authority and responsibility Span of control Centralisation versus decentralisation Formalisation
What is Work Specialisation?
Dividing work activities into separate job
Employees specialise in doing of an activity rather than the entire activity in order to increase work output
What is departmentalisation?
How jobs are grouped together
Functional Departmentalisation - Grouping activities by functions performed
Product Departmentalisation - Grouping activities by major product areas
Customer Departmentalisation - Grouping activities by customer
Geographic Departmentalisation - Grouping activities by location served
Process Departmentalisation - Grouping activities on the basis of work flow
What is line authority?
Authority that entitles a manager to direct the work of an employee
What is staff authority?
Positions with some authority that have been created to support, assist, and advise those holding line authority
What are the types of power?
Coercive - based on fear
Reward - based on the ability to distribute something that others value
Legitimate - based on ones position in the formal hierarchy
Expert - based on expertise, special skill or knowledge
Referent - based on identification with a person that has desirable traits or resources
What is span of control?
The number of employees a manager can efficiently and effectively supervise
What is centralisation?
The degree to which decision making takes place at upper levels of the organisation
What is decentralisation?
The degree to which lower-level managers provide input or actually make decisions
What is formalisation?
How standardised an organisation’s jobs are and the extent to which employee behaviour is guided by rules and procedures
What Contingency Variables Affect Structural Choice?
Mechanistic Organisation - A bureaucratic organisation; a structure that’s high in specialisation, formalisation, and centralisation
Organic Organisation - A structure that’s low in specialisation, formalisation, and centralisation
What is the Simple Structure?
An organisational design with low departmentalisation, wide spans of control, authority centralised in a single person, and little formalisation
What is functional structure?
An organisational design that groups similar or related occupational specialties together
What is Divisional Structure?
An organisational structure made up of separate business units or divisions
What is a matrix structure?
A structure in which specialists from different functional departments are assigned to work on projects led by a project manager
What are the strengths and weaknesses of a simple structure?
Strengths - fast, flexible, inexpensive, clear accountability
Weaknesses - not appropriate as organisation grows, reliance on one person is risky
What are the strengths and weaknesses of a functional structure?
Strengths - cost saving, employees are grouped with others with similar tasks
Weaknesses - lose sight of what is best for the organisation, little understanding of other units
What are the strengths and weaknesses of a divisional structure?
Strengths - focuses on results, division managers are responsible
Weaknesses - duplication of activities, increased costs, reduced efficiency
What are the strengths and weaknesses of a matrix structure?
Strengths - provides excellent coordination
Weaknesses - dual lines of reporting can create conflict and confusion
What are the 4 traditional organisational designs?
Simple
Functional
Decisional
Matrix
What are the 3 Contemporary Organisational Structures?
Team
Project
Boundaryless
What is a team structure?
A structure in which the entire organisation is made up of work teams
What is a project structure?
A structure in which employees continuously work on projects
