Organizational Structure and Strategy

vertical specialization

an organization’s hierarchical division of labor

organization charts

diagrams that depict the formal structures of organizations

span of control

the number of individuals reporting to a supervisor

line units

conduct the major business of the organization (e.g. production and marketing functions)

staff units

assist the line units by providing specialized expertise and service (accounting and public relations)

control

the set of mechanisms used to keep action or outputs within predetermined limits

output controls

focus on desired targets for each unit

process controls

attempt to specify the manner in which tasks are accomplished

policy

sets forth a broad guideline for action

procedure

sets forth the best method for performing a task

formalization

the written documentation of rules, procedures, and policies to guide behavior and decision making

standardization

the allowable actions in a job or series of jobs

centralization

the degree to which the authority to make decisions is restricted to higher levels of management

decentralization

the degree to which the authority to make decisions is given to lower levels in an organizations hierarchy

horizontal specialization

a division of labor that establishes specific work units or groups within an organization

coordination

the set of mechanisms that an organization uses to link the actions of their units into a consistent pattern

functional departmentation

groups individuals by skill, knowledge, and action

divisional departmention

groups individuals together by products, territories, services, clients, or legal entities

matrix departmentation

uses both the functional and divisional forms simultaneously

organizational design

the process of choosing and implementing a structural configuration

simple design

a configuration involving one or two ways of specializing individuals and units

operations technology

the combination of resources, knowledge, and techniques that creates a product or service output for an organization

adhocracy

characterized by shared decentralized decision making, extreme horizontal specialization, few management levels and minimal formal controls with very few rules, policies, and procedures

information technology

the combination of machines, artifacts, procedures, and systems used to gather, store, analyze, and disseminate info for translating it into knowledge

general environment

the set of cultural, economic, legal-political, and educational conditions found in the areas in which the organization operates

specific environment

the set of owners, suppliers, distributors, government agencies, and competitors with which an organization must interact to grow and survive

environmental complexity

refers to the magnitude of the problems and opportunities in the organization’s environment

interfirm alliances

cooperative agreements or joint ventures between two independent firms

bureaucracies

rely on division of labor, hierarchical control, promotion by merit with career opportunities for employees, and administration by rule

mechanistic (or machine) type of bureaucracy

emphasizes vertical specialization and control

organic (or professional) type of bureaucracy

emphasizes horizontal specialization, use of personal coordination devices, and professional-based controls

conglomerate

a single corporation that contains a number of unrelated businesses