Organizational Structure

Chapter 10: Organizing

Warm-Up Question

  • Consider how you work best:

    • Do you prefer tasks that are highly structured with clear processes?

    • Or do you enjoy a more flexible approach allowing for personal methods of accomplishing tasks?

  • Identify advantages and disadvantages of structured vs. flexible approaches.

Key Elements of Organizational Structure

  • The elements to consider in organizational structure include:

    • Job Design

    • Group Jobs

    • Reporting Relationships

    • Authority

    • Coordinating Activities

    • Differentiation among Positions

Job Design

  • Focuses on employee responsibilities and their specific roles within the organization.

Job Specialization

  • Involves breaking down jobs into specific areas and tasks, allowing individuals to specialize.

Benefits of Job Specialization

  • Workers become proficient in specific tasks or areas.

  • Decreased transfer time between tasks.

  • Low training costs.

Limitations of Job Specialization

  • Workers may become bored and dissatisfied due to repetitive tasks.

  • Boredom can lead to higher absenteeism and lower work quality.

  • Extreme specialization (e.g., one employee spinning one nut) should be avoided to promote employee satisfaction.

Alternatives to Specialization

  1. Job Rotation

    • Systematically move employees between different jobs (e.g., from unit A to B, C, D).

    • Promotes flexibility and helps reduce costs but jobs may still be viewed as boring long-term.

  2. Job Enlargement

    • Increases the number of tasks an employee is responsible for, such as a customer service rep also handling complaints.

    • Positive outcomes include expanded skills and experiences, but training costs increase, leading to the potential for unionization and demands for higher pay.

    • Work often remains boring, with minimal engagement.

  3. Job Enrichment

    • Involves increasing the number of tasks and the control an employee has over their job.

    • Can lead to improved job satisfaction when implemented successfully.

  4. Work Teams

    • Allows groups of individuals to design their workflows for interrelated tasks, promoting a collective approach.

Job Characteristics Approach

  • Focuses on five core dimensions to enhance job satisfaction:

    1. Skill Variety - Engaging in various activities or skills.

    2. Task Identity - Completing whole, identifiable portions of a job.

    3. Task Significance - Recognizing the importance of the task.

    4. Autonomy - Level of control a worker has over their job.

    5. Feedback - Receiving information on job performance.

Departmentalization

  • The process of grouping jobs and workers based on similar activities to enhance efficiency.

Growth and Departmentalization

  • As an organization grows, it becomes necessary to departmentalize managerial responsibilities to ensure efficient governance.

  • Smaller organizations may have fewer managers, while larger ones require more managerial positions to oversee specialization.

Types of Departmentalization

  1. Functional Departmentalization

    • Groups individuals based on similar job activities (e.g., marketing, finance, HR).

    • Advantages include expert staffing and better coordination among departments.

    • Disadvantages can include slower decision-making and loss of holistic organizational insight.

  2. Product Departmentalization

    • Organizes activities based on specific products or product groups.

    • Coordinated activity can enhance speed and effectiveness focused on products.

    • Disadvantages include managers losing sight of the organization as a whole.

  3. Customer Departmentalization

    • Groups activities based specifically on customer bases.

    • Involves skilled specialists to cater to unique customer needs.

  4. Location Departmentalization

    • Organizes employees based on geographical considerations.

    • Advantages include responsiveness to regional customer needs, while disadvantages can include larger administrative staff and potential communication breakdowns.

Chain of Command and Authority

  • Chain of Command outlines authority structure within the organization:

    • Unity of command: ensures each person has a clear reporting path.

    • Example provided with the lecturer's reporting lines (department chair, dean, provost, president).

Scalar Principle

  • Dictates that there should be a clear line of authority from the top levels of management to entry-level employees.

Span of Management

  • Discusses the number of subordinates a manager can effectively supervise, which can be narrow or wide.

Types of Interactions

  1. Direct Interaction: One-on-one between managers and employees.

  2. Cross Interaction: Relationships among peers.

  3. Group Interaction: Interactions within a collective group of employees.

Delegation of Tasks

  • Important for managers to effectively delegate to achieve efficiency in work.

Steps to Effective Delegation

  1. Assign Responsibilities: Identify tasks for employees directly reporting to the manager.

  2. Provide Authority: Equip employees with the necessary tools and authority to complete tasks effectively.

  3. Create Accountability: Foster open communication for meeting deadlines and addressing concerns.

Centralization vs. Decentralization

  • Centralization: Power is concentrated in upper management (CEO, top managers).

  • Decentralization: Delegates power and authority down to lower-level managers allowing autonomy.

Considerations for Centralization vs. Decentralization

  • External environment, organizational complexity, history, risks involved, and abilities of lower-level management.

Coordinating Activities

  • Understanding different forms of interdependence in coordinating activities:

    1. Pooled Interdependence: Units operate with minimal interaction; outputs are integrated at a higher level.

    2. Sequential Interdependence: Output from one unit becomes input for another.

    3. Reciprocal Interdependence: Activities flow back and forth between units.

Structural Coordination

  • Involves the hierarchy, rules and procedures, liaison roles, task forces, integrating departments, and technology.

Final Thoughts

  • Encourage reflection on departmentalization of the university:

    • Assess advantages of different organizational structures and their impact on students, instructors, staff, and prospective students.