Shermerhorn Chapter 8 - Organization Structure and Design Flashcards
Definition of organization structure
system of tasks, workflows, reporting relationships and communication channels that link together diverse individuals and groups
Definition of organizing
process of arranging people and other resources to work together to accomplish a goal
Aspects of formal structure (5)
- Division of work
- supervisory relationships
- communication channels
- major subunits
- levels of management
Definition of informal structures
unofficial but often critical working relationships between organization members
Advantages of informal structure
- helping people accomplish their work
- Overcoming limits of formal structure
- gaining access to interpersonal networks
- informal learning
Disadvantages of Informal Structure
- may work against best interests of organization
- Susceptibility to rumour
- may carry inaccurate information
- may breed resistance to change
- diversion of work efforts from important objectives
- feeling of alienation by outsiders
Definition of Functional Structure
people with similar skills and similar tasks are grouped together into formal work units
Advantages of functional structure
- economies of scale
- task assignments consistent with expertise and training
- high quality technical problem solving
- in-depth training and skill development
- clear career paths within functions
Disadvantages of functional structure
- difficulties in pinpointing responsibilities
- functional chimney problem
- lack of cross-functional collaboration
- lack of common purpose
- narrow view of performance objectives
- excessive upward referral of decisions
Definition of Divisional Structures
group together people who work on the same product or process, serve similar customers and are located in same region
Types of divisional structures
product
geographical
customer
process
Advantages of divisional structures
- more flexibility in responding to environmental changes
- improved coordination
- Clear points of responsibility
- expertise focused on specific customers, products and regions
- greater ease in restructuring
Disadvantages of divisional structures
- duplication of resources and efforts across divisions
- competition and poor coordination across divisions
- Emphasis on divisional goals at expense of organizational goals
Definition of Matrix structure
Combines functional and divisional structures
uses of matrix structures
manufacturing service industries professional fields non-profit multi-national corporations
Advantages of Matrix Structure
- Better coordination
- improved decision making
- Increased flexibility
- better customer service
- better performance accountability
- improved strategic management
Disadvantages of Matrix structure
- two boss system
- power struggles
- task confusion and conflict
- time consuming meetings
- groupitis
- increase cost due to adding team leads to structure
Types of Horizontal Structures
Team
Network
Boundary-less
Definition of Team structure
permanent and temporary teams for special projects , sometimes cross-functional
Advantages of Team structure
- no communication and decision making difficulties
- eliminated barriers
- improved morale
- sense of involvement and identification
- enthusiasm
- improved quality and speed of decision making
Disadvantages of Team structure
- Conflicting loyalties Among members
- time consuming meetings
- quality depends on interpersonal relationships, group dynamics, team management
Definition of network structures
central core that is linked through networks of relationships with outside contractors/suppliers
Advantages of network structures
- fewer full-time employees
- less complex internal structure
- reduce overhead costs
- increased operating efficiency
- operations can be across great distances
Disadvantages of Network structures
- control and coordination problems
- potential loss of control over outsourced activities
- lack of loyalty
Definition of Boudaryless organizations
no internal boundaries among subsystem and external boundaries with the external environment, combination of team and network
requirements of boundary-less organizations
- absence of hierarchy
- empowerment of team members
- technology utilization
- acceptance of impermanence
Types of organizational Designs
- Bureaucracy
- Subsystem
Definition of bureaucracy design
based on logic, order and legitimate use of formal authority
Features of Bureaucracy
- clear-cut division of labour
- strict hierarchy
- formal rules and procedures
- promotion based on competency
When does mechanistic design work?
in stable environment
When does organic design work?
in rapidly changing and uncertain environment
Is there always a need for some bureaucracy?
Yes
Definition of subsystem
department/work unit that operates as a smaller part of the larger organization
What are Lawrence’s and Lorsch’s findings? (3)
- totally system structures of successful firms match the challenges of their environments
- subsystem structures match the challenges of their respective sub-environments
- subsystems in successful firms worked well with each other
Definition of differentiation
the degree of difference that exists among the internal components of an organization
4 sources of differentiation
- time orientation
- objectives
- interpersonal orientation
- formal structure
definition of integration
level of coordination achieved among an organization’s internal components
what is the organization design paradox?
- the more differentiation -> the greater need for integration
- integration is more difficult as differentiation increases
How do you achieve integration
- rules and procedures
- hierarchical referral
- planning
- direct contact
- liaison role
- task forces
- teams
- matrix organizations
Name 6 contemporary organizing trends
- shorter chains of command
- less unity of command
- wider spans of control
- more delegation and empowerment
- decentralization with centralization
- reducing staff
Definition of chain of command
line of authority that vertically links all persons with successively higher levels of management
What does less unity of command mean?
each person in an organization should report to only one supervisor
What are trends from shorter chains of command
cutting of unnecessary levels of management, flatter structures
Trends of less unity of command?
more cross-functional teams, horizontal structures, more customer focused, more than one boss
Definition of span of control?
number of people directly reporting to a manager
trend of span of control
levels of management are eliminated, responsibilities for larger numbers of employees
definition of delegation
process of entrusting work to others by giving them the right to make decisions and take actions
Steps of delegating
- assign responsibility
- grant authority
- create accountability
Definition of centralization
concentration of authority for making most decisions at the top levels of the organization
definition of decentralization
dispersion of authority to make decisions throughout all levels of organization
decentralization trend?
delegation, empowerment, horizontal structures
centralization trend?
advances in technology -> more retention of centralized control
definition of specialized staff?
people who perform a technical service or provide special problem solving expertise to other parts of organization
