Organizational Structure in Business Management

These flashcards cover key concepts related to organizational structure in business management, including types of structures, delegation, centralization vs. decentralization, and other important terminology.

Organizational structure

Organizational structure is the way a business is arranged to carry out its various activities, often represented by an organizational chart.

Main types of organizational structures

The main types of organizational structures include hierarchical, functional, and matrix structures.

Hierarchical structure

A hierarchical structure has clearly defined roles and relationships, with employees typically reporting to a manager.

Functional structure

In a functional structure, employees are organized into specialized functional groups, allowing specialists to focus on their areas of expertise.

Matrix structure

A matrix structure combines functional groups and vertical chain of command with horizontal project teams.

Delegation in a business context

Delegation is the distribution of work to another person, allowing managers to reduce their workload and empower junior employees.

Centralization vs. Decentralization

Centralization occurs when decisions are made by senior managers, while decentralization empowers employees throughout the organization to make decisions.

Advantages of a flat organizational structure

Advantages of a flat structure include less bureaucracy, better communication, faster decision-making, and the potential for increased innovation.

Span of control

Span of control refers to the number of subordinates that report directly to a manager.

Causes of inter-functional tension in a functional structure

Inter-functional tension can arise from functional loyalty and the creation of work silos within specialized groups.

Purpose of an organizational chart

An organizational chart illustrates the chain of command and authority within a business, clarifying roles and communication flow.

Impact of centralization on motivation

Centralization can lower employee motivation, as decision-making is limited to higher management levels.

Delayering

Delayering is the process of reducing the number of layers in an organizational structure, often transitioning from a tall to a flat structure.

Attributes of a formal organizational structure

A formal structure includes clearly defined roles, responsibilities, authority, and communication channels.

Flexible organizational structure operation

A flexible structure evolves to meet changing needs, focuses on customer adaptation, and may utilize outsourced labor.

Structuring organizations by product vs. function

Organizations might structure by product to better meet specific market needs, streamline operations, or enhance specialization.

Conflicts in a hierarchical structure

Conflicts can arise from different priorities between layers, such as the focus on cost-cutting versus the need for operational efficiency.