Ch 4 - Organisational Structure and Design

Decentralisation

Decentralisation

________: Organisations in which decision- making is pushed down to the managers who are closest to the action.

Centralization

________: The degree to which decision- making is concentrated at a single point in the organisations Top managers make all the decisions and lower level employees carry out these orders.

Geographical

________: grouping based on territory or geography.

Matrix

________ and project structures: Specialists from different functional departments are assigned to work on projects led by project managers Have two managers Employees work continuously on projects.

Disadvantages

________: poor communication, limited view of organisational goals.

Environmental Uncertainty

________ and Structure: Mechanistic organisational structures tend to be the most effective in stable and simple environments The flexibility of organic organisational structures is better suited for dynamic and complex environments.

Organic Organisation

________: highly flexible and adaptable structure (usually for small businesses)

Departmentalisation

________: Grouping different tasks based on different criteria.

Divisional structure

________: composed of separate business units or divisions with limited autonomy under the coordination and control with parent corporation.

Formalisation

________: Degree to which jobs within the organisation are standardised and the extent to which employee behaviour is guided by rules and procedures Highly ________ jobs offer little discretion over what is to be done Low ________= fewer constraints on how employees do their work.

Technology

________ and Structure: organisations adapt their structures to their ________ Organisations adapt their structures to their ________.

Contingency Factors

________: Structural decisions are influenced by: Overall strategy of the organisation: organisational structure follows strategy Size of the organisation: firms change from organic to mechanistic organisation as they grow in size Technology used by the organisation: firms adapt their structure to the technology they use Degree of environmental uncertainty: dynamic environments require organic structures; mechanistic structures need stable environments.

Organisational structure

________: the formal arrangement of jobs within an organisation.

Customer

________: grouping by type of customer and needs.

Organisational Design Decisions

________: Mechanistic Organisation: a rigid and tightly controlled structure (usually for large businesses)

Organisational structure

the formal arrangement of jobs within an organisation

Organisation design

a process involving decision about six key elements

Work Specialisation

When tasks in the organisation are divided into separate jobs with each step completed by a different person

Departmentalisation

Grouping different tasks based on different criteria

Functional

grouping jobs by functions performed

Process

grouping jobs based on the product or customer flow

Product

grouping by product line

Customer

grouping by type of customer and needs

Geographical

grouping based on territory or geography

Chain of Command

Continuous line of authority that extends from upper levels of an organisation to the lowest levels of the organisation to the lowest levels of the organisation and clarifies who reports to who

Centralization

The degree to which decision-making is concentrated at a single point in the organisations Top managers make all the decisions and lower level employees carry out these orders

Decentralisation

Organisations in which decision-making is pushed down to the managers who are closest to the action

Formalisation

Degree to which jobs within the organisation are standardised and the extent to which employee behaviour is guided by rules and procedures Highly formalised jobs offer little discretion over what is to be done Low formalisation = fewer constraints on how employees do their work

Employee Empowerment

Increasing the decision making authority of employees

Organic Organisation

highly flexible and adaptable structure (usually for small businesses)

Strategy and structure

achievement of strategic goals is facilitated by changed in organisational structure that accommodate and support change

Size and structure

as an organisation grows larger, its structure tends to change from organic to mechanistic with increased specialisation, departmentalisation, centralisation, and rules and regulations

Technology and Structure

organisations adapt their structures to their technology Organisations adapt their structures to their technology

Environmental Uncertainty and Structure

Mechanistic organisational structures tend to be the most effective in stable and simple environments The flexibility of organic organisational structures is better suited for dynamic and complex environments

Divisional structure

composed of separate business units or divisions with limited autonomy under the coordination and control with parent corporation

Boundaryless Organisation

A flexible and unstructured organisational design that is intended to break down external barriers between the organisation and its customers and suppliers Removes internal (horizontal) organisation