Organizational Structure Flashcards
What is organizational structure
Organizational structure defines how job tasks are formally divided, grouped, and coordinated. Typical parts of the structure include decision making, strategic planning, R&D, accounting etc
How is labour divided in an organization
There is horizonal and vertical divisions of labour in an organization. Horizontal division refers to job design and differentiation, like how many different departments there are in a company. Vertical division can affect autonomy and control as well as communication, it refers to how many levels of employees there are and who reports to who
What are the types of departmentalization discussed in class
Functional, product, and matrix, the types of matrix include geographic, process, and customer
What is functional departmentalization and the advantages/disadvantages
Where you put people with similar skills together in a department, it is the traditional structure we think of with an accounting department, marketing department etc.
Advantages: In-depth specialization, efficiencies from putting people with similar skills and knowledge together
Disadvantages: poor communication across functional areas, limited view of organizational goals
What is product departmentalization and the advantages/disadvantages
Creating departments based on each product the company offers, there will be someone with the same role in each product department
Advantages: allows specialization in particular products and services, and is closer to customers
Disadvantages: duplication of function and limited view of organizational goals
Process departmentalization advantages/disadvantages
Organizing departments by production process, mainly used in manufacturing companies for example a company that makes sweaters has a spinning, weaving, dyeing, and packaging department
Advantages: balances technical demands of the project or product with people who actually do the work, this departmentalization is flexible
Disadvantages: product/project manager may not get along with functional manager, can be role conflict and stress for employees
Geographical departmentalization
Grouping people/departments based on physical location
Advantages: more effective and efficient on handling specific regional issues that arise, and serves the unique needs of the geographical markets better
Disadvantages: duplication of functions, and can feel isolated from other regional segments
Customer departmentalization advantages/disadvantages
This is making departments based on the needs of customers, like having a manager for retail accounts, a manager for wholesale accounts, and a manager for government accounts
Advantages: customer needs and problems can be met by specialists
Disadvantages: duplication of function and limited view or organizational goals
What are the traditional structural characteristics of an organization
Span of control: number of employees under the control of a manager which impacts organizational efficiency and communication
Flat vs tall: refers to hierarchy and the number of management levels
Formalization: extent to which rules and procedures are clearly defined and followed in a company
Centralization: degree to which decision making power is concentrated to high level employees in an organization
Complexity: level of differentiation in an organization such as the variety of tasks and roles
Size and structure: scale of an organization and how it is departmentalized
Organic vs mechanistic: organic structures are flexible and adaptive while mechanistic structures are rigid and highly formalized
