Organizational Behavior Chapter 15

Organizational Structure

The way in which job tasks are formally divided, grouped, and coordinated.

Work Specialization

The degree to which tasks in an organization are subdivided into separate jobs

Departmentalization

Basis on which jobs are grouped together. Involves functional, product or customer, geographical and matrix.

Chain of Command

The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom

Authority

The rights inherent in a managerial position to give orders and to expect the orders to be obeyed

Unity of Command

The idea that a subordinate should have only one superior to whom he or she is directly responsible

Span of Control

The number of subordinates a manager can efficiently and effectively direct

Wide Spans of Control

These spans are more cost efficient but can lead to insufficient leadership and support impacting employee performance

Narrow Spans of Control

These spans increase manager control but are expensive, increase communication complexity, and discourage autonomy

Centralization

The degree to which decisions making is concentrated at a single point in an organization

Centralized Organizations

Organizations have top level managers making all the decisions and lower-level managers merely carrying out their directives

Decentralized Organizations

Organizations have decision making pushed down to managers closest to the actions

Formalization

The degree to which jobs within an organization are standardized

Highly Formalized

Indicates minimal discretion over what to do, when to do it, and how to do it

Minimally Formalized

indicates jobs are unprogrammed and a lot of freedom to exercise discretion

6 Key Elements of Organizational Structure

Work Specialization, Departmentalization, Chain of Command, Span of control, Centralization and Decentralization, Formalization

Common Organizational Structures

Simple, Bureaucracy, and Matrix

Simple Structure

An organization structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization

Bureaucracy

An organization structure with highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command

Matrix Structure

An organization structure that creates dual lines of authority and combines functional and product departmentalization

Virtual Organization

A small, core organization that outsources major business functions (aka Network, or modular, organization)

Boundaryless Organization

An organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams

Downsizing

A systematic effort to make an organization leaner by closing locations, reducing staff, or selling off business units that don't add value

Effective Strategies for Downsizing

Investment, Communication, Participation, Assistance

Investment

Companies that downsize to focus on core competencies are more effective when they invest in high-involvement work practices afterward

Communication

When employers make efforts to discuss downsizing with employees early, employees are less worried about outomces and feel the company is taking their perspective into account

Participation

Employees worry less if they can participate in the process in some way. Voluntary early-retirement progams or severence packages can help achieve leanness without layoffs

Assistance

Serverance, extended heathcare benefits, and job search assistance demonstrate a company cares about its employees and honors their contributions

The Mechanistic Model

A structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization

The Organic Model

A structure that is flat, uses cross-hierarchical and cross functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making

Structure

A means to achieve objectives

Objectives

Derived from the organizations overall strategy

Innovation Strategy

A strategy that emphasizes the introduction of major new products and services

Cost-Minimization Strategy

A strategy that emphasizes tight cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting

Imitation Strategy

A strategy that seeks to move into new products or new markets only after their viability has already been proven

Technology

The way in which an organization transfers its inputs into outputs, differentiated by their "degree of routineness"

Routine Activities

Characterized by automated and standardized operations

Environment

Institutions or forces outside an organization that potentially affect the organizations performance

Dimensions of Environment

Capacity, Volatility, Complexity

Capacity

The degree to which the environment can support growth

Volatility

The degree of instability in the environment

Complexity

The degree of heterogeneity and concentration among environment elements