Organizational Structure Flashcards
Key elements of organization structure
Consists of 2 or more individuals working together to achieve a group result
Formal layout of the company
Clearly defines reporting relationships, decision-making authority and physical location of employees
Define Tall Structure
Narrow span and more hierachical levels
Provide clear, distinct layers with obvious lines of responsibility and control and a clear promotion structure
Drawbacks to Tall Structure
Too tall and communication begins to take too long to travel through all the levels
Define Flat Structure
Lines of communication are short, making the firm responsive to change
A wide span of control means that tasks must be delegated and managers can feel overstretched
Define departmentalization
Efficient and effective grouping of related functions in manageable units to achieve objectives
Specialized Function
President –> Operation, marketing, finance
Product
PIC –> Parenterals, Prescriptions, durable medical equipment
Market
President –> Healthcare, government, education
Customer
President –> Nursing homes, retail, hospitals
Geographic area structure
CEO –> SW region, E region, W region
Matrix Structure
You have a general manager, then other leaders and then project managers who have to work together
Define Delegation
The process of accomplishing goals through others
Essential the minute a job becomes too complex, too voluminous or too diverse for one employee
Risk of Delegations
Loss of control
Reverse delegation (when a manager assumes a task delegated to an employee)
Loss of job
Define Scalar Principle
“Chain of Command”
Should be a clear definition of authority
Results in explanation of relationships, reduced confusion and enhanced decision making
Define Centralization
Limited amount of authority has been delegated
Measured on a sliding scale from highly centralized to decentralized
Highly centralized organizations
Delegate little authority to lower level
Highly decentralized organizations
Delegate broad ranges of authority to lower levels of employees
Advantages of Centralization
Tightened control of operation
Standardization of policies and procedures
Increased use of specialized experts
Advantages of Decentralization
Faster decision making
Trains leaders at lower levels to transition to higher levels
Activities tailored to meet local conditions
Define Line Structure
Has only direct vertical relationships between different levels in the firm
Advantages of Line Structure
Tends to simplify and clarify authority, responsibility and accountability relationships
Promotes fast decision making
Simple to understand
Disadvantages of Line Structure
Neglects specialist in planning
Overloads key persons
Define Line position
A position in the direct chain of command that is responsible for the achievement of an organization’s goals
Define Staff position
A position intended to provide expertise, advice and support for the line positions
Staff and Functional Authority Organizational Structure
Staff departments have authority over line personnel in narrow areas of specialization is known as functional authority organization
Committee Organizational Structure
Committee is a group of people appointed to consider or make decisions
Can be standing (permanent) or ad hoc (temporary)
Ad hoc (temporary)
Formed to deal with a specific issue, once the task is completed the committee is dissolved
Define Contingency Approach
Dictates that the development of an effective organizational structure is contingent upon the situation the organization is operating
Contingency approach focus upon:
Environment Technology Change Size of the organization Other forces
