Organization Design

Question 1

organization design concepts

Answer 1

• span of control
• “Unity of Command” principle - a structure in which each worker reports to one boss, who in turn reports to one boss
• Line vs. staff positions - positions in the operational side of the business. They workers work in the unit
  EX: Cashier at McDonald’s, retail worker at Victoria Secret
• Hierarchy of authority - a control mechanism for making sure the right people do the right things at the right time
• Division of labor - Who is supposed to be doing what, and how labor is going to get divided up.
  “when common goals are being pursued by individuals performing separate but related tasks
  -To what extent are we supposed to work together on certain tasks
  -To what extent are we solely responsible for certain tasks
• Centralized vs. decentralized decision making- Decisions made at top of organization it would be centralized

If decisions are pushed down they are decentralized

How far down in the organization are decisions made?

• Reporting relationships—solid line
  vs. dotted line -On an organzation chart, if you see a solid line it means this person reports formally to this person

If you see a dotted line on the org chart it means this person reports unformally to this person
Dotted line person usually gives feedback to solid line person just because the report is unformal does not mean its not impactful
* Closed systems vs. open systems - (open: Organizations that require inputs from outside the organization, and they export things, this would be an open system
-depends on constant interaction with the environment for survival
EX: Whole Foods)

Question 2

basic types of org structure

Answer 2

• Function
• Division (e.g., geographies and/or products and/or customers, etc.)
• Matrix (combines vertical and horizontal)
• Horizontal
• Hollow (outsources selected processes)
• Modular (outsources selected components or modules)
• Virtual
• Most organizations use a hybrid of these approaches

Question 3

Other Important Terms/Concepts

Answer 3

• Learning organizations: Orgs that have learning and continuous improvement as part of their culture.
• Mechanistic vs. organic organizations: mechanistic organizations are strcit organizations with strict rules narrowly defined tasks top-down communication , and centralized decision making
  EX: Government, strict corporate cos Jp Morgan Goldman etc

Organic organizations are flexible networks of multi-talented individuals who perform a variety of tasks
EX: Start-Up Molo Suki Sumo

• Different types of organizational effectiveness criteria
• Goal accomplishment: Are we successfully completing the processes that are essential to our success?
• Internal processes
• Strategic constituencies: How do our investors feel do they feel confident in our direction? How do our employees feel?
• Resource acquisition: Do we have constant access to the resources we need?
• Product innovation: a change in appearance or functionality/performance of a product or service or the creation of a new one.
  EX: Microsoft new xbox , from Xbox 360 to xbox one , Apples new Iphone, new Ipad
• Process innovation: is a change in a way a product or service is conceived, manufactured or distributed
  EX: Pizza from calling for delivery to ordering online for delivery , Chipolte from ordering take out on app and getting order from cashier to rapid pick up where you do not interact with anyone in restaurant