W&O ch13 Organizational structure

Question 1

Organizational structure

Answer 1

The division of labour as well as the patterns of coordination, communication, workflow, and formal power, that direct the organizational activities

Question 2

Division of labour

Answer 2

Dividing work into separate jobs and activities assigned to different people

Question 3

How can labour be divided?

Answer 3

Horizontally: more narrow tasks (job specialization)
Vertically: more layers (supervisor of employees, supervisor of that supervisor…)
Sometimes both, but not necessarily

Question 4

Benefits of division of labour (job specialization)?

Answer 4

1. Finish tasks more quickly
2. Less waste of time when switching between tasks
3. Training costs lower
4. Easier to match people with the job they are best suited for

Question 5

What is the condition for effectiveness of division of labour?

Answer 5

Only effective if activities are coordinated

Question 6

Processes through which coordination of work activities can be achieved

Answer 6

1. Informal communication
2. Formal hierarchy
3. Standardization

Question 7

Informal communication

Answer 7

• sharing info on mutual tasks
• forming common mental models to synchronize work activities
• vital in non-routine, ambiguous situations

Question 8

What is informal communication aided by?

Answer 8

1. Direct communication
2. Liaison roles (bridging two parties that don’t normally communicate)
3. Integrator roles (similar to liaison but centralized around specific product or goal )
4. Temporary teams (concurrent engeneering) - two-way feedback at all times of the product’s development

Question 9

Formal hierarchy

Answer 9

• direct supervision, ‘‘chain of command’’ (manager)
• formal (legitimate) power over others to direct work processes and allocate resources

Question 10

Problems with formal hierarchy

Answer 10

1. Slow flow of information
2. One manager can supervise only a limited number of people - growing company results in costly bureaucracy
3. Limit employee autonomy and involvement - complaints of being micromanaged

Question 11

Standardization and its three forms

Answer 11

Creating routine patterns of behaviour or output through 3 forms:
1. Standardized processes
2. Standardized outputs (inform employees what they are accountable for, e.g. number of products)
3. Standardized skills (train people)

Question 12

Standardized processes

Answer 12

Works best for simple/routine tasks
- product or service can be improved through providing employees with job descriptions, procedures and safety rules

Question 13

Elements of organizational structure

Answer 13

1. Span of control
2. Centralization
3. Formalization
4. Departmentalization

Question 14

Span of control

Answer 14

Number of people reporting directly to the next hierarchical level, also called ‘direct reports’

Question 15

Different levels of span of control

Answer 15

Wide - flat (fewer layers) vs Narrow - tall structure (few people report directly to a manager)

• Number of hierarchical levels in relation to number of employees
• For best performance, average of 38 employees per supervisor
• In times of growth often more layers are required which can result in problems

Question 16

Problems with taller structure (narrow span of control)

Answer 16

1. Lower quality + timely upward info
2. Cost - more managers per employee
3. Less empowerment and engagement of employees - focus power around managers not employees

Question 17

Problems with wider span of control (flat structure)

Answer 17

1. Managers less time to effectively coach employees, resolve conflicts…
2. Promotions riskier - bigger jump in responsibility and not enough time to develop management talent
3. Managers have less time to perform coherent daily operations

Question 18

What does optimal span of control depend on?

Answer 18

• Coordination mechanism(s) that are used (e.g. standardization - the more standardized, the less need to report to a supervisor)
• Types of tasks (routine tasks: wider span of control - require less direction)
• Interdependence of employees (more interdependent, more narrow because experience more conflitct)

Question 19

Centralization

Answer 19

Degree to which formal decision authority is held by a small group of people
- Formal decision making by a few people, mostly at the top

Question 20

Decentralization

Answer 20

Decision-making authority dispersed throughout the organization
The larger the org, the more decentralized the decision-making authority gets

Question 21

Formalization

Answer 21

The degree to which organizations standardize behaviour through rules, procedures, training + related mechanisms
The more org grows, the more standardization it needs

Question 22

Advantages of formalization

Answer 22

Increase in efficiency, compliance, consistency

Question 23

Disadvantages of formalization

Answer 23

Decrease flexibility, learning, creativity, autonomy, job satisfaction, work stress goes up

Question 24

Organic structure

Answer 24

• Wide span of control
• Low degree of formalization
• Decentralized (complex environment)

Question 25

When should an organization choose organic structure?

Answer 25

in dynamic environments (more flexible and responsive to changes) in hostile environments when tasks are high on variability and low on analyzability for innovation strategies (easier for employees to share knowledge and be creative)

Question 26

Mechanistic structure

Answer 26

- narrow span of control (vertical communication flow) - high degree of formalization - high centralization (simpler environments)

Question 27

When should an organization choose mechanistic structure?

Answer 27

in stable environments (rely on efficiency and routine behaviours) in munificent environments when tasks are low on variability and high on analyzability (routine tasks) for low-cost strategies (maximizes production and service efficiency

Question 28

Departmentalization

Answer 28

How are employees and their activities grouped

Question 29

Three functions of departmentalization

Answer 29

1. Establishes a chain of command and thus interdependence 2. Creates common mental models and focus 3. Encourages coordination by informal communication

Question 30

Functional structure

Answer 30

Organizes employees around specific knowledge or other resources Usually centralized to coordinate their activities effectively

Question 31

Benefits of functional structure

Answer 31

1. Create specialized pools of talent - improves economies of scale 2. Increases employees' identity with the job 3. Direct supervision easier - common issues and expertise

Question 32

Limitations of functional structure

Answer 32

1. Attention focused on related professional needs rather than on the company's products,s ervices or client needs 2. Limited understanding of the bussiness 3. Employees need to work with other departments, but they have different subgoals and mental models = dysfunctional conflict and poorer coordination serving clients or developing products

Question 33

Divisional structure

Answer 33

Organizes employees around 1. end products or services 2. client groups 3. geographical areas (fewer orgs adopt this - freer and worldwide trade) * Which one an org chooses depends on its primary source of environmental diversity or uncertainty

Question 34

Benefits of divisional structure

Answer 34

1. Building-block structure - when new products/services developed = easy to build a new division 2. Outcome-focused

Question 35

Limitations of divisional structure

Answer 35

1. Duplicate resources 2. Resources not used as efficiently 3. Expertise spread across several autonomous units - less motivation and ability to share knowledge 4. If org experiences diversity and uncertainty across all three environmental sources, they try to create complex structures and revise them - creates confusion and complications