Week 7 - organisational structures Flashcards
Key Points
- organisational structure (6 divisions)
- common organisational designs (3)
- new design options (2)
- Design and Employee Behaviour
Organisational Structures
how job tasks are formally divided, grouped, and coordinated
Key elements of organisational structures (dogs fuck cats cause stevie walks)
Departmentalisation Formalisation Centralisation Chain of Command Span of control Work Specialisation
Departmentalisation
jobs are grouped together.
Grouping activities by:
o Function – e.g. in hospital; research, patient care, accounting etc.
o Product or Service – e.g. accounting firm split by taxation, auditing and management consulting services. Increased accountability for product performance as each product/service is under the direction of a single manager
o Geography – e.g. North and South Island
o Process – e.g. casting, pressing, tubing, finishing, packing, shipping etc.
o Customer – e.g. consumer, large corporations, software developers, small businesses
Formalisation
the degree to which jobs within the organisation are standardised
o Low = non-programmes and freedom to exercise discretion in work
o High = explicit job descriptions, many organisational rules and defined procedures for processes. Doesn’t work where there is need to be flexible and innovative
Centralisation
o Centralisation – decision making is concentrated at a single point in the organisation better for avoiding bad choices
o Decentralisation – decision making pushed down to the managers closest to the action or even to work groups better for avoiding lost opportunities
o Trend moving towards decentralisation as lower managers have more knowledge of problems e.g. Myers allowing store ownings to choose stock
Chain of Command
the unbroken line of authority that extends from the top of the organisation to the lowest echelon and that clarifies who reports to whom
o Authority – rights inherent in a managerial position to give orders & expect orders to be obeyed
o Unity-of-Command – the idea that subordinate should have only one superior
o Each managerial position is given a place in the chain of command, and each manager is given a degree of authority in order to meet his or her responsibilities
Span of Control
the number or subordinates a manager can efficiently and effectively direct
o Wider spans of management:
1. Reduce costs
2. Speed up decision making
3. Increase flexibility
4. Get closer to customers
5. Empower employees
o Narrow Spans of management:
1. More expenses
2. Increased complexity or vertical communication slows decision making
3. Encourages overly tight supervisions and discourages employee autonomy
Work Specialisation
the degree to which tasks in an organisation are subdivided into separate jobs
o Specialisation in a single task with small repetitive and efficient jobs Fordism
o Present in assembly line and fast food
o Employees can become isolated and bored
Common Organisational Designs
simple structure
the bureaucracy
the matrix
Simple Structure
low degree of departmentalisation, wide spans of control, authority centralised in a single person and little formalisation (2 levels)
o Strengths = simplicity, flexibility, clear accountability
o Weakness = difficult to maintain in larger organisations and everything depends on one person
The Bureaucracy
highly routine operating tasks, high specialisation, very formalised rules and regulations, tasks grouped into functional departments, centralised authority, narrow spans of control and decision making that follows the chain of command (4 levels)
o Strengths = efficient re-standardised activities, economies of scale, minimum duplication of resources
o Weaknesses = obsessive concern with following the rules, conflicts between areas as department goals can override overall goals
The Matrix
combines two forms of departmentalisation; functional and product
o Functional: split by departments e.g. manufacturing manager, sales manager, finance manager, human resources manager. Allows pooling and sharing of specialised resources across products. Difficult to coordinate the tasks of diverse functional specialists on time and within budget.
o Products: facilitates coordination to meet budgets and deadlines & provides clear responsibilities for product.
o Breaks unity-of-command as employees have two bosses; functional department, and product managers. However, can be difficult to know who to report to
New Design Options
- virtual organisation
- boundaryless organisation
Virtual Organisation
a small, core organisation that outsources major business functions
o Highly centralised with little or no departmentalisation only executive group
o Strength = can do more with less money, best talent for demands, less bureaucratic overhead costs, lessens long-term risks as not long term (team assembled for finite period), increased flexibility
o Weakness = flux and constant reorganisation can make roles, goals and responsibilities unclear as little interaction with members e.g. geographically
o E.g. Film Industry; hires other companies for a fixed period to make a film – set designers, camera people, film editors, directors, actors, makeup artists
