OB- Chapter 15 - Organizational Structure

What are the seven key elements of organizational structure?

Work specialization, departmentalization, chain of command, span of control, centralization and decentralization, formalization, boundary spanning.

What is work specialization?

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

What are the advantages of work specialization?

Increases efficiency, productivity, and expertise.

What are the disadvantages of work specialization?

Leads to boredom, fatigue, stress, and lower motivation.

What is departmentalization?

The basis by which jobs are grouped together in an organization.

What are five common types of departmentalization?

Functional, product, geographical, process, and customer.

What is functional departmentalization?

Grouping jobs by function (e.g., marketing, finance, HR).

What is product departmentalization?

Grouping jobs by product line or service offered.

What is geographical departmentalization?

Grouping jobs based on territory or region.

What is process departmentalization?

Grouping jobs according to production steps or processes.

What is customer departmentalization?

Grouping jobs based on customer type or need.

What is the chain of command?

The continuous line of authority extending from top management to the lowest levels in the organization.

What are the key concepts within the chain of command?

Authority, responsibility, and unity of command.

What is unity of command?

The principle that each employee should have only one direct supervisor.

What is span of control?

The number of subordinates a manager can effectively direct.

What are the pros of a narrow span of control?

Close supervision and control, easier communication with subordinates.

What are the cons of a narrow span of control?

Slower decision-making and higher management costs.

What are the pros of a wide span of control?

More autonomy for employees, faster communication, cost efficiency.

What are the cons of a wide span of control?

Risk of less supervision and managerial overload.

What is centralization?

The degree to which decision-making is concentrated at a single point in the organization.

What is decentralization?

When decision-making authority is pushed down to lower levels of the organization.

What is formalization?

The extent to which jobs are standardized and guided by rules and procedures.

What are the effects of high formalization?

Little discretion for employees; consistent behavior.

What are the effects of low formalization?

More flexibility and discretion in how tasks are performed.

What is boundary spanning?

The extent to which individuals or groups form relationships outside their formally assigned groups or departments.

Give an example of boundary spanning.

A project manager coordinating between the marketing and production teams.

What is the simple structure?

A flat organization with low departmentalization, wide spans of control, and centralized authority.

What are the advantages of the simple structure?

Fast, flexible, and clear accountability.

What are the disadvantages of the simple structure?

Risk of information overload for top management; not scalable as the organization grows.

What is a bureaucracy?

A structure with high specialization, formal rules, clear hierarchy, and narrow spans of control.

What are the advantages of a bureaucracy?

Efficiency, standardization, predictability.

What are the disadvantages of a bureaucracy?

Rigid, impersonal, slow to adapt to change.

What is the matrix structure?

A structure that combines functional and product departmentalization, creating dual lines of authority.

What are the advantages of the matrix structure?

Facilitates coordination, improves communication across departments, and efficient information sharing.

What are the disadvantages of the matrix structure?

Confusion from dual authority, role conflict, and power struggles.

What is the mechanistic model?

A rigid, tightly controlled structure with high formalization and centralization.

What type of environment fits a mechanistic model?

Stable, predictable environments.

What is the organic model?

A flexible, adaptable structure with low formalization and decentralized decision-making.

What type of environment fits an organic model?

Dynamic and changing environments.

What are the key differences between mechanistic and organic structures?

Mechanistic = rigid, centralized, specialized. Organic = flexible, decentralized, cross-functional.

What organizational factors influence structure?

Strategy, size, technology, and environment.

How does strategy influence structure?

Innovation strategies need organic structures; cost-minimization strategies need mechanistic structures.

How does organization size influence structure?

As size increases, structure becomes more specialized, formalized, and hierarchical.

How does technology influence structure?

Routine technology suits mechanistic; non-routine suits organic.

How does environment influence structure?

Stable → mechanistic; dynamic → organic.