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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