Chapter 6: Organization Structure and Design

Organizational design

The process of creating and arranging an organization’s structure, including jobs and relationships

Organizational structure

The formal system of task division, grouping, and coordination within an organization

Job specialization

Dividing jobs into small, repetitive tasks for efficiency

Job rotation

Moving employees between different jobs to increase variety and reduce boredom

Job enlargement

Expanding a job by adding more tasks at the same level

Job enrichment

Increasing job depth by adding responsibility, autonomy, and control

Job Characteristics Model

A model stating jobs should include skill variety, task identity, task significance, autonomy, and feedback

Skill variety

Part of the job characteristics model, Degree to which a job requires different skills and activities

Task identity

Part of the job characteristics model, Degree to which a job involves completing a whole piece of work

Task significance

Part of the job characteristics model, Degree to which a job impacts others

Autonomy

Part of the job characteristics model, Degree of freedom and independence in a job

Feedback

Part of the job characteristics model, Information about performance effectiveness

Departmentalization

The process of grouping jobs into departments

Functional departmentalization

Grouping jobs by business function (marketing, finance, etc.)

Product departmentalization

Grouping jobs by product line

Customer departmentalization

Grouping jobs based on customer type

Location departmentalization

Grouping jobs by geographic region

Chain of command

The line of authority from top to bottom of the organization

Span of control

The number of employees a manager directly supervises

Tall organization

An organization with many management layers and a narrow span of control

Flat organization

An organization with few management layers and a wide span of control

Authority

The legitimate right to make decisions and give orders

Delegation

The process of assigning tasks and authority to others

Centralization

Keeping decision-making authority at higher levels

Decentralization

Distributing decision-making authority throughout the organization

Pooled interdependence

Work units operate independently but contribute to overall output

Sequential interdependence

One unit’s output becomes another unit’s input

Reciprocal interdependence

Work units depend on each other in a back-and-forth manner

Virtual organization

An organization that uses technology to operate with minimal physical structure

Team organization

An organization structured around teams instead of hierarchy

Learning organization

An organization that continuously adapts and improves through learning