Organizational Structure

• Organization: formal term
• Ancient Chinese; thousands of years ago they do civil-servant exam

Classical Theory

• a theory developed in the 20th century that described the form and structure of organizations
• each level of management has subordinates

Neoclassical Theory

• a theory developed in the 1950s (Hawthorne studies) that described psychological or behavioral issues associated with organizations
• new understanding; not really a theory

Systems Theory

• a theory developed in the 1970s that described organizations in terms of interdependent components that form a system
• organization as a system

Principles of the Classical Theory

• Functional Principle

  • the concept that organizations should be divided into units that perform similar functions
  • work is broken down to provide clear areas of specialization
  • work activities are often organized into departments
  • accounts for the grouping of work functions into such units as production, sales, engineering, finance, and so on
  • horizontal growth of the organization

  

• Scalar Principle

  • the concept that organization are structed by a chain of command that grows with increasing levels of authority
  • deals with the organization’s vertical growth
  • each level has its own degree of authority and responsibility for meeting organizational goals, with higher levels having more responsibility
  • Unity of Command: the concept that each subordinate should be accountable to only 1 supervisor

  

• Line/Staff Principle

  • the concept of differentiating organizational work into line and staff functions
  • Line and Staff Functions: life and blood of business
  • Line Functions: have the primary responsibility for meeting the major goals of the organization (e.g. production department)
  • support functions support the line’s activities but are regarded as subsidiary in overall importance to line functions (e.g., personnel and quality control)

• Span of Control Principle

  • the concept that refers to the number of subordinates a manager is responsible for supervising
  • a “small” span of control is 2 subordinates; a “large” span of control might be 15
  • large spans of control produce flat organizations (that is, few levels between the top and bottom of the organization)
  • small spans of control produce tall organizations (that is, many levels)

Objections from the Neoclassical Theory

• primarily based on either psychological research or an examination of real-life organizational problems, that is, it recognized the importance of psychological and behavioral issues
• Division of Labor: depersonalizes work activities so that the individual finds little meaning in them; results to a sense of alienation from highly repetitive work, which ultimately results in dissatisfaction with their work
  • specialization
  • reducing people to machines
• argued for less rigid division of labor and far more “humanistic” work in which people derive a sense of value and meaning from their jobs
• Objection to Scalar Principle: Individuals are influence by interpersonal activities that extend well beyond those prescribed by the formal organizational structure
  • possible to have possible bosses
• Objection to Line/Staff Principle: Black-and-white theoretical distinction between line and staff functions is not always so clear in practice; many staff functions are critical to the success of the organization
• Objection to Span of Control: More complex than picking a number; depends on such issues as the supervisor’s managerial ability and the intensity of the needed supervision
  • What if routine work?

Radical Views from Systems Theory

• With origins in the biological sciences, it views organizations as any other form of living organism with a series of interlocking systems
• All parts affect other parts. Every action has repercussions throughout the organization because all of its elements are linked
• Interdependence: All of the other parts and their interrelatedness make up the “system”
• The purpose of an organization is to reach stability, to grow, and to adapt, as all living organisms must do to survive

5 Parts of an Organizational System

• Individuals bring their own personalities, abilities, and attitudes with them to the organization, which influence what they hope to attain by participating in the system.
  • Individuals are complicated, everyone is different from each other.
• The formal organization is the interrelated pattern of jobs that provides the structure of the system.
• Individuals do not work in isolation but become members of small groups as a way to facilitate their own adaptability within the system
  • Small Groups: idea of interdependence
• Status and role differences exist among jobs within an organization and define the behavior of individuals within the system.
  • higher role = higher status
• This is the external physical environment and the degree of technology that characterizes the organization.

Organizational Structure

• division of labor and patterns of coordination, communication, workflow, and formal power that direct organizational activities
• Structure: the arrangement of work functions within an organization designed to achieve efficiency and control
• Division of Labor
  • subdividing work into separate jobs assigned to different people
  • limited by ability to coordinate work
  • potentially increases work efficiency
  • necessary as company grows and work becomes more complex