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The formally defined framework of task and authority relationships. The organization structure is analogous to the biological concept of the skeleton.
Specifies what will be accomplished. Organizational structure specifies who will accomplish what and how it will be accomplished.
The general approaches the organization uses to achieve its organizational objectives. These approaches include market penetration, marked development, product development, and diversification strategies.
Fundamental challenge of organizational design
Grouping jobs for the most effective, efficient use of resource to achieve organizational goals.
Four choices for managers of organizational design
- Degree of Specialization
- Delegation of Authority
- Type of Departmentalization
- Span of Control
Degree of Speicialization
The degree to which individual jobs are specialized.
Division of labor
Dividing tasks into narrow specialities. Also deciding when to use humans or automation to perform a task
The organizationally sanctioned right to make a final decision.
The legitimate right to use assigned resources to accomplish a delegated task or objective; the right to give orders and exact obedience
A form of delegation that combines delegation with training to ensure that the individuals to whom tasks are delegated to have the skills required to make sound decisions.
The management practice of pushing decision-making authority down the chain of command to the individuals or groups responsible for carrying out tasks.
The process of grouping jobs together on the basis of some common characteristic, such as product, client, location, or function.
Three key factors for grouping: Logic, Physical Location, social harmony
Span of Control
The number of subordinates who report to a superior. The span of control is a factor that affect the shape and height of an organization structure.
The delegated right of managers to make decisions without approval by higher management.
The process of pushing downward the appropriate amount of decision-making authority. All organizations practice a certain degree of decentralization.
Art of Delegating
- Determine what to delegate: Identify and list responsibilities that need to be assigned to other. Try to be as specific as possible.
- Match projects to staff members: Determine which assignments would be best suited to each employee. Enjoyment of projects will cause more enthusiasm.
- Communicate your expectations: Don't simply provide a laundry list of tasks. Instead, explain the ultimate objectives of the project and how it helps your department or the company achieve certain goals.
- Follow-up: Check on progress and provide guidance.
- Show Appreciation: Motivating.
Chain of Command
The formal channel that defines authority, responsibility, and communication relationships from top to bottom in an organization
Characterized by semipermeable boundaries between organizational departments and divisions.
Where the formal structure characteristics such as spans of control, departmentalization, and rigid chain of command is minimized or eliminated.
A factor in departmentalization. Managers must be attuned to the social relationships in an organization and be careful not to create a departmental structure that creates disharmonies.
Factors of relative importance in Span of Control decisions
- The competence of both the manager and the subordinates: The more competent they are, the wider the span of control can be.
- The degree of interaction that is required among the units to be supervised: The more the required interaction, the narrower the span of control must be.
- The extent to which the manager must carry out non managerial tasks: The more technical and job-related work the manager has to do, the less time is available to supervise others, and thus the narrower the span of control must be.
- The relative similarity or dissimilarity of the jobs being supervised: The more similar the jobs, the wider the span of control can be and visa versa.
- The extent of standardized procedures: The more routine the jobs of subordinates are, and the greater the degree to which each job is performed by standardized methods, the wider the span of control can be.
- The degree of physical dispersion: If all the people to be assigned to a manager are located in one area, and within eyesight, the manager can supervise relatively more people.
Supply Chain Management (SCM)
A company's efforts to organize and control its global sourcing.
Three dimensions used to describe structure.
The degree to which an organization's expectations as to the means and ends of work are specified and written.
Rules and procedures are available to prescribe what each individual should be doing.
Main descriptors: High Specialization, high delegation of authority, functional departments, and wide spans of control.
Describes the location of decision-making authority in the organization's hierarchy; refers to the delegation of authority among the organization's jobs.
Relationship between centralization and the four design decisions
- The higher the specialization of labor, the greater the centralization.
- The greater the use of functional departments, the greater the centralization.
- The wider the spans of control, the greater the centralization.
- The less authority delegated, the greater the centralization.
Difference among jobs as the direct outgrowth of dividing work and creating departments.
Specifically the concept refers to the number of distinctly different job titles, or occupational groupings, and the number of distinctly different units or departments.
horizontal and vertical differentiation
- Horizontal Differentiation: the number of different units on the same level
- Vertical Differentiation: the number of levels in the organization
Relationship between complexity and the four design decisions
- The greater the specialization of labor, the greater the complexity
- The greater the use of territorial, customer, and product bases, the greater the complexity
- Narrow spans of control are associated with high complexity
- The greater the delegation of authority, the greater the complexity of the organization.
The process by which managers develop and organization's structure.
An organization design in which there is differentiation of job task, rigid rules, and a reliance on top-management objectives.
An organization with a behavioral orientation, participation from all employees, and communication flowing in all directions.
A design in which a project type structure is imposed on a functional structure.
Advantages of Matrix Organization
- Efficient use of resources
- Flexibility in conditions of change and uncertainty
- Technical Excellence
- Freeing top management for long-range planning
- Improving motivation and commitment
- Providing opportunities for personal development
Multidivisional (M-form) organization
A high-performance organization form that allows highly interdependent operation units or divisions.
A flexible, usually temporary set of alliances among disparate companies that have come together for a specific single purpose.