chp 8 - organizational structure

what is integration?

the concept of coordination which are procedures that link the parts of the organization to achieve the organizations overall mission

a conventional organization chart

what is differentiation?

the organization distinguishes and separates jobs and jobholders from one another through the division of labor and job specialization

what is division of labor?

the work of an organization is subdivided into smaller tasks

what is specialization?

different people or groups perform those smaller parts of the organization’s overall work

example of differentiation in different companies

what is authority? who commonly has it?

the legitimate right to make decisions and tell other people what to do

• board of directors

• chief executive

• top management team

what is hierarchy?

the authority levels of the organizational pyramid

what is corporate governance?

role of a corporation’s executive staff and board of directors in ensuring that the firm’s activities meet the goals of the firm’s stakeholders

what is span of control? (narrow span vs wide span)

number of subordinates who report directly to a supervisor

• narrow span: tall organization with many reporting levels

• wide span: flat organization with fewer reporting levels

a Deloitte study found average span of control at large companies to be about 11 direct reports

what is delegation?

assignment of new or additional responsibilities to a subordinate

what is responsibility?

assignment of a task that an employee is supposed to carry out

what is authority?

authority grants a person the right to make decisions and give orders

what is accountability?

expectation that employees will perform a job, take corrective action when necessary, and report upward on the status and quality of their performance

advantages of delegation

• leverages managers’ energy and talent

• helps train and develop effective subordinates

• promotes a sense of being a contributing member of the organization

the steps in the effective diagram

the high-involvement organization

top leaders ensure consensus about the direction in which the business is heading by seeking input from their team, middle managers, and sometimes from lower levels

participative management

• involving employees in decisions making

• task forces, study groups, and other techniques are used to foster participation in decisions

the horizontal structure (line dept, staff dept)

line departments

• units that deal directly with the org’s primary goods and services

• ex: sales

staff departments

• units that support line dept

• ex: human resources

the functional organization

structured around specialized activities such as production, marketing, and human resources

advantages of functional departmentalization

divisional structure

examples of functional and divisional organization$

matrix organization structure

matrix advantages and disadvantages

matrix organization - product focus

network organization

a collection of independent, mostly single-function firms that collaborate on a good or service 

organizational integration (standardization, formalization)

standardization

• establishing common routines and procedures that apply uniformly to everyone

formalization

• the presence of rules and regulations governing how people in the organization interact

organizational integration (coordination by plan, coordination by mutual adjustment)

coordination by plan

• interdependent units are required to meet deadlines and objectives that contribute to a common goal

coordination by mutual adjustment

• units interact with one another to make accommodations to achieve flexible coordination

managing high information-processing demands

coordination and communication (option1: reducing the need for info)

creating slack resources

• extra resources on which organizations can rely in a pinch so that if they get caught off guard, they can still adjust

creating self-contained tasks

• changing from a functional organization to a product or project organization and giving each unit the resources it needs to perform its task