chapter 15: foundations of organization structure Flashcards
organizational structure
An organizational structure defines how job tasks are formally divided, grouped, and coordinated.
Seven key elements should be considered when designing an organization’s structure:
- work specialization
- departmentalization
- chain of command
- span of control
- centralization and decentralization
- formalization
- boundary spanning
Seven key elements should be considered when designing an organization’s structure: 1. work specialization (microspecialization and high work specialization)
Work specialization, or division of labor, describes the degree to which activities in the organization are divided into separate jobs and steps, each completed by a separate individual. Individuals specialize in doing part of an activity rather than completing the entire process themselves.
- Making the most of efficient use of employee’s skills and improving them through repetition
***microspecialization in which extremely small pieces of programming, data processing, or evaluation tasks are delegated to a global network of individuals by a program manager who then assembles the results
***High work specialization helps fast-food restaurants make and sell hamburgers and fries efficiently and aids medical specialists in most health maintenance organizations.”
Once jobs have been divided through work specialization, they must be grouped so common tasks can be coordinated and complexity can be reduced. The basis by which jobs are grouped is called departmentalization
Seven key elements should be considered when designing an organization’s structure: 2. departmentalization
Once jobs have been divided through work specialization, they must be grouped so common tasks can be coordinated and complexity can be reduced. The basis by which jobs are grouped is called departmentalization
- functional departmentalization
- product or service departmentalization
- geographical departmentalization
- process departmentalization
- information security firms may have
(1) a policy management department that works with HR, legal, and project management functions to set information security policies;
(2) a network security department that oversees network security, intrusion prevention, and event management
divisional structures
These more divisional structures (e.g., product, geographical, process, and customer departmentalization) have the opposite benefits and disadvantages of the simple structure. They facilitate coordination in units to achieve on-time completion, budget targets, and development and introduction of new products to market while addressing the specific concerns of each unit
Seven key elements should be considered when designing an organization’s structure: 3. chain of command
the chain of command is an unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom
authority, essentially formal power as discussed in the earlier chapter on power and politics, refers to the rights inherent in a managerial position to give orders and expect them to be obeyed. To facilitate coordination, each managerial position is given a place in the chain of command, and each person is given a degree of authority to meet their responsibilities.
unity of command states that a person should have one and only one superior to whom they are directly responsible. If the unity of command is broken, an employee might have to cope with conflicting demands or priorities from several supervisors
Seven key elements should be considered when designing an organization’s structure: 4. span of control
How many employees can a manager direct efficiently and effectively? The span of control describes the number of levels (or layers) and managers in an organization.41 All things being equal, the wider or larger the span, the fewer the levels, and the more employees at each level, the more efficient the organization.
- Narrow or small spans have their advocates
- But narrow spans have three major drawbacks
First, they are expensive because they add levels of management.
Second, narrow spans make vertical communication in the organization more complex.
Third, narrow spans encourage overly tight supervision and discourage employee autonomy.
Seven key elements should be considered when designing an organization’s structure: 5. centralization and decentralization
Centralization refers to the degree to which decision making is concentrated at a single point in the organization.
- In centralized organizations, top managers make all the decisions, and lower-level managers merely carry out their directives
- decentralized decision making is pushed down to the managers closest to the action or to workgroups.
Seven key elements should be considered when designing an organization’s structure: 6. formalization
“refers to the degree to which jobs within the organization are standardized. If a job is highly formalized, the employee has a minimal amount of discretion over what to do”
Cons: “formalization can hurt team flexibility in decentralized organization structures, suggesting that formalization does not work as well where duties are inherently interactive or where there is a need to be flexible and innovative”
Benefits: “For instance, formalizing pay determinations for jobs reduces gender inequality in most circumstances.61 Furthermore, issues of fairness and ethics matter. If the formalization is fair and legitimate turnover can be prevented as employees worry less about making sense of their positions and are not as overburdened with coordination and clarification demands”
Seven key elements should be considered when designing an organization’s structure: 7. boundary spanning
Boundary spanning occurs when individuals form relationships with people outside their formally assigned groups.
- these activities help prevent formal structures from becoming too rigid and, not surprisingly, enhance organization and team creativity, decision making, knowledge sharing, and performance.
- boundary spanning can be an excellent tool for expatriates and local workers to collaborate:”
simple structure
A simple structure is common in many startups, such as those found in Silicon Valley.
“The modern tech startup is driven by an entrepreneurial founder, supported by a core set of loyal employees who work long hours, who enacts a unifying vision.The simple structure has a low degree of departmentalization, wide spans of control (e.g., a flat organization), authority centralized in a single person, and little formalization. It usually has only two or three vertical levels, a loose body of employees, and one individual with decision-making authority
One major weakness is that such a structure becomes increasingly inadequate as an organization grows because its low formalization and high centralization tend to create information overload at the top
bureucracy
The bureaucracy is characterized by highly routine operating tasks achieved through specialization, formalized rules and regulations, departmentalization, centralized authority, narrow spans of control, and decision making that follows the chain of command.
“Putting like specialties together in units results in economies of scale, minimum duplication of people and equipment, and a common language that employees all share.
Weakness: “bureaucratic specialization can create conflicts in which the unit perspectives override the overall goals of the organization.” “obsessive concern with following standard procedures and practices. When cases do not fit “the way things are done around here” precisely, there is no room for modification.
matrix structure
The matrix structure combines functional and product departmentalization, and these types of structures can be found in a multitude of organizations, such as advertising agencies, universities, and entertainment companies.89 Organizations with a matrix structure create a dual line of authority, so that there are multiple people accountable, depending upon their function and product
Matrices can help facilitate coordination when the organization has several complex and interdependent activities.
However, some disadvantages of the matrix structure lie in the confusion it creates, its tendency to foster power struggles, and the stress it places on individuals.
mechanistic model
One model is the mechanistic model, which is generally synonymous with the bureaucracy in that it has highly standardized processes for work, high formalization, and more managerial hierarchy.
organic model
The other extreme is the organic model, which is flat, has fewer formal procedures for making decisions, has multiple decision makers, and favors flexible practices.
