OTD Chapter 4 Flashcards
Differentiation
The process of establishing and controlling the division of labour.
Simple organizations
Differentiation is low, because the division of labour is low.
Complex organizations
Differentiation is high, because the division of labour is high.
Division
Subunit that consists of a collection of functions or departments that share responsibility for producing a particular good or service.
Support functions
Functions that facilitate an organization’s control of its relations with its environment and its stakeholders.
Production functions
Functions that manage and improve the efficiency of an organization’s conversion process.
Maintenance function
Functions that enables an organization to keep its departments operational.
Adaptive functions
Functions that allow an organization to adjust to changes in the environment.
Managerial functions
Functions that facilitate the control and coordination of activities within and among departments.
Vertical differentiation
The way an organization designs its hierarchy of authority and creates reporting relationships to link organizational roles and subunits.
Horizontal differentiation
The way an organization groups organizational tasks into rules and roles into subunits (functions and divisions).
Subunit orientation
A tendency to view one’s role in the organization strictly from the perspective of the time frame, goals, and interpersonal orientations of one’s subunit.
Integration
The process of coordinating various tasks, functions, and divisions so that they work together and not at cross purposes.
Seven integrating mechanisms
- Hierarchy of authority.
- Direct contact
- Liaison role
- Task force
- Team
- Integrating role
- Integrating departments
Hierarchy of authority
A ranking of employees integrated by specifying who reports to whom.
Direct contact
Managers meet face to face to coordinate activities.
Liaision role
A specific manager is given the responsibility of coordinating with managers from other subunits on behalf of his or her subunit.
Liaision role
A specific manager is given the responsibility of coordinating with managers from other subunits on behalf of his or her subunit.
Task force
Managers meet in temporary committees to coordinate cross-functional activities.
Team
Managers meet regularly in permanent committees to coordinate activities.
Integrating role
A full-time position established specifically to improve communication between divisions. A new role is established to coordinate the activities of two or more functions or divisions.
Integrating departments
A new department is created to coordinate the activities of functions or divisions.
Centralization
Organization setup in which the authority to make decisions is retained by managers at the top of the hierarchy.
Advantage centralization
Lets top managers coordinate activities.
Keeps the organization focused on its goals.
Disadvantages centralization
Top managers can become overloaded and immerse in operational decision making about day-to-day resource issues.
Decentralization
An organization setup in which the authority to make important decisions about organizational and initiated new projects is delegated to managers at all levels of the hierarchy.
Advantage decentralization
Promotes flexibility and responsiveness.
Disadvantage decentralization
If too much authority is delegated, managers at all levels can make their own decisions. Planning and coordination become very difficult.
Standardization
Conformity to specific models or examples - defined by sets of rules and norms - that are considered proper in a given situation.
Mutual adjustment
The compromise that emerges when decision making and coordination are evolutionary processes and people use their judgement rather than standardised rules to address a problem.
Formalization
The use of written rules and procedures to standardise operations.
High level of formalization =
Centralization of authority.
Low level of formalization =
Mutual adjustment, and decentralisation of authority.
Socialization
The process by which organizational members learn the norms of an organization and internalize these unwritten rules of conduct.
Mechanistic structure (meaning)
Structures that are designed to induce people to behave in a predictable, accountable way.
Organic structure (meaning)
Structures that promote flexibility, so people initiate change and can adapt quickly to changing conditions.
Mechanistic structure (facts)
- Individual specialization
- Simple integrating mechanisms (hierarchy of authority)
- Centralization (most communication is vertical)
- Standardization (use is made of rules and SOPs)
Organic structure (facts)
- Joint specialization
- Complex integrating mechanisms (task forces and teams)
- Decentralization (most communication is lateral - from side-to-side)
- Mutual adjustment (face-to-face contact to coordinate tasks)
Contingency approach
A management approach in which the design of an organization’s structure is tailored to the sources of uncertainty facing an organization.
According to the contingency theory, an organization should design its structure to fit with the environment in which the organization operates. This is necessary to manage its environment effectively.