Foundation of Organization Structure Summary

Overview

A Closer Look: The Gig Economy
➢ Design
➢ Common Designs:
o Simple Structure
o The Bureaucracy
o Matrix Structure
➢ New Options
➢ Rationale for Differences

Foundation of Organization Structure

A Closer Look: The Gig Economy

  • Explores the impact and characteristics of gig jobs within modern organizations.

Design Principles

Work Specialization

  • Historical focus on efficiency in manufacturing (e.g., Ford).

  • Tasks divided into specialized roles.

Departmentalization

  • Groups jobs for coordinated common tasks (e.g., design, manufacturing).

Chain of Command

  • Authority lineage from top to bottom.

  • Clarifies who reports to whom (unity of control).

Span of Control

  • Wider spans can improve organizational efficiency.

  • However, excessive width may reduce effectiveness.

Formalization

  • Indicates the level of job standardization within the organization.

  • Less worker autonomy in decision-making.

Centralization vs. Decentralization

  • Centralization: Concentrated decision-making authority.

  • Decentralization: Quicker problem-solving and more collective input in decisions.

Common Organizational Designs

Simple Structure

  • Flat organization with few levels and centralized decision-making.

Bureaucracy

  • Routine tasks with formalized rules.

  • Functional departments and centralized authority with narrow spans of control.

Matrix Structure

  • Combines functional and product departmentalization.

  • Benefits: coordination; Drawbacks: power struggles.

  • 84% of U.S. employees in matrix structures.

Virtual Organization

  • Small core entity outsourcing major functions.

Boundaryless Organization

  • Seeks to dissolve hierarchy and empower teams.

  • Concept by Jack Welch of General Electric.

Rationale for Differences in Structure

  • Strategy: Structure aligns with organizational strategy.

  • Size: Affects complexity and structure.

  • Technology: Transforms resources into products/services.

  • Environment: Influences by suppliers, customers, competitors, and regulations.