Organizational Structure v7

Organization Chart: A visual representation of an organization’s structure, indicating the reporting structure and division of labor.
- Each box in the chart represents different work performed.
Vertical Structure:
- Focuses on authority, reporting relationships, and responsibilities within the organization.
Horizontal Structure:
- Relates to the organization’s actual structure and its departmentalization.

Differentiation:
- Organizations consist of various units performing different tasks with unique skills and methods.
- Division of Labor: Dividing work into smaller tasks assigned to different groups, closely related to specialization.
Integration:
- The collaboration and coordination among different work units within the organization to achieve common goals.

Delegation:
- Assigning additional responsibilities to subordinates.
Authority:
- The legitimate right to make decisions and direct others.
Hierarchy:
- Different levels of authority within the organization.
Centralized vs. Decentralized:
- Centralized: Decisions made at higher levels and passed down.
- Decentralized: Decisions made at lower management levels.

Functional Organization:
- Departmentalization around specialized activities (e.g., production, marketing).
Divisional Organization:
- Structure based on divisions such as product lines, customer types, or geographic locations.

A flexible and dynamic structure that centers around networks of independent entities.
- Focuses on collaboration for projects or products rather than traditional organizational forms.
- Also known as modular or virtual corporation.

Strategic Alliance:
- A formal relationship among independent organizations for mutual goals.
Learning Organization:
- Skilled at acquiring and transferring knowledge, modifying behavior accordingly.
High-involvement Organization:
- Ensures consensus on company direction by involving top management.

Standardization:
- Establishing uniform routines and procedures.
Formalization:
- Existence of rules and regulations that guide interactions within the organization.
Mechanistic Organization:
- Maximizes internal efficiency.
Organic Structure:
- Emphasizes flexibility in organizational design.
Boundaryless Organization:
- Lacks information flow barriers.

Control:
- Process guiding individuals towards organizational goals.
Types of Control:
- Bureaucratic Control: Uses formal rules/hierarchy for certain tasks.
- Market Control: Involves prices and competition.
- Clan Control: Relies on culture and shared values.

Steps include:
1. Setting performance standards (quantity, quality, time, cost).
2. Measuring performance (through observation or written reports).
3. Comparing performance against standards and identifying deviations.
4. Correcting problems and reinforcing successes.

Feedforward Control:
- Preventive measures through policies and procedures before operations.
Concurrent Control:
- Monitoring and adjustments made during operations.
Feedback Control:
- Analyzing past results to correct future deviations.

Performance Standards:
- Must be based on accurate, objective criteria (preferably quantitative).
Employee Communication:
- Importance of the control system must be conveyed to employees.
Acceptability:
- Standards should be seen as achievable by employees.
Open Communication:
- Employees should feel safe reporting issues.
Multiple Approaches:
- Using methods like the Balanced Scorecard to combine different measures (finance, customers, processes, learning/growth).