Chapter 5: Organizational Structure and Design

Comprehensive vocabulary flashcards covering the core concepts, structural elements, contingency variables, traditional designs, and contemporary designs from Chapter 5: Organizational Structure and Design.

Organizing

The management function that involves deciding how to set everything up so that the strategic plan can actually happen.

Organizational Structure

How tasks are divided, grouped, and coordinated within an organization.

Organizational Design

The process of developing or changing an organization's structure.

Work Specialization

The degree to which tasks in an organization are divided or subdivided into separate jobs, also known as division of labour.

Departmentalization

The basis on which individual jobs and tasks are grouped together so that work can be coordinated and managed.

Functional Departmentalization

A departmentalization method where jobs are grouped according to the functions or types of work they perform, such as human resources, marketing, finance, and sales.

Geographic Departmentalization

A departmentalization method where jobs are grouped according to location or geographic territory.

Product Departmentalization

A departmentalization method where jobs are grouped according to specific products or product lines offered by the organization.

Customer Departmentalization

A departmentalization method where jobs are grouped according to the specific type of customer being served, such as personal banking or business banking.

Process Departmentalization

A departmentalization method where jobs are grouped according to the stages or steps involved in producing a product or delivering a service.

Cross-Functional Teams

Groups of employees from different functional areas brought together to collaborate, increasing knowledge and coordination across tasks.

Chain of Command

The continuous line of authority that extends from upper organizational levels to the lowest levels and clarifies who reports to whom.

Power

The ability to influence the behaviour of others or get them to do something, which can derive from position, knowledge, expertise, or relationships.

Authority

The formal right a manager has to make decisions, give orders, and direct the work of others, typically accompanying a position in the organization.

Line Authority

The direct authority managers have over employees, carrying responsibility for achieving the primary goals of the organization.

Staff Authority

Positions created to provide advice, expertise, or specialized support to line managers, lacking direct command over core operational employees.

Responsibility

The obligation to perform the specific tasks and duties assigned to an employee or position.

Accountability

The condition of being held answerable for the ultimate results and outcomes of decisions and actions.

Delegation

The process by which a manager assigns responsibility and authority to a subordinate to complete a designated task.

Unity of Command

The management principle stating that an employee should report to only one direct supervisor to prevent conflicting instructions and competing priorities.

Span of Control

The number of employees a manager can efficiently and effectively manage, determining the number of organizational levels and managers required.

Wide Span of Control

A supervisory span where a manager oversees a large number of employees (often $\gt 13\text{ to } 20+$), resulting in flatter structures and lower management costs but less individual coaching.

Narrow Span of Control

A supervisory span where a manager oversees a small number of employees (often $\lt 8$), allowing for closer performance monitoring and individual coaching at the cost of more management levels and higher expenses.

Centralization

The degree to which decision-making authority is concentrated primarily at higher, top levels of management.

Decentralization

The degree to which decision-making authority is distributed to lower levels of the organization closer to day-to-day operations and customers.

Formalization

The degree to which jobs are standardized and the extent to which employee behaviour is guided by written rules, policies, and procedures.

Mechanistic Organization

A rigid, tightly controlled organizational structure characterized by high work specialization, narrow spans of control, high formalization, centralized decision-making, and top-down communication.

Organic Organization

A highly adaptive, flexible organizational structure characterized by lower work specialization, wide spans of control, low formalization, decentralized decision-making, and two-way communication.

Contingency Variable

A situational factor (such as strategy, size, technology, or environment) that dictates the most appropriate organizational design option following an "IF this happens, THEN this" logic.

Innovation Strategy

A strategy focusing on introducing new products, services, or processes that requires the flexibility, creativity, and freedom of an organic structure.

Cost-Minimization Strategy

A strategy focused on controlling expenses and maximizing efficiency that relies on the consistency and tightly defined roles of a mechanistic structure.

Simple Structure

A traditional organizational design characterized by few layers of management, low departmentalization, wide spans of control, and centralized authority concentrated in a single owner or manager.

Functional Structure

A traditional organizational design that groups similar or related occupational specialties and expertise together across the entire organization.

Divisional Structure

A traditional organizational design made up of separate, semi-autonomous business units or divisions, each focused on a specific product, customer, or geography.

Team Structure

A contemporary organizational design in which the entire organization is made up of work groups or teams that work together toward shared goals without rigid departmental barriers.

Matrix-Project Structure

A contemporary organizational design where a matrix assigns specialists from functional departments to specific projects, or a project structure where employees continuously move from one completed project to the next.

Boundaryless Structure

A contemporary organizational design not defined by or limited to artificial horizontal, vertical, or external boundaries, encompassing virtual and network organization types.

Learning Structure

A contemporary organizational design in which employees continually acquire, share, and apply new knowledge throughout the organization as a sustainable competitive advantage.