7. Organizational Structure Flashcards
(12 cards)
Advantages and Disadvantages of M-Form
Pros: Seperations of operational control at the divisional level, better balancing of exploration/exploitation; strategic planning.
Cons: Potential duplication of resources, increased costs and difficulties in maintaining coordination.
Advantages and Disadvantages of U Form
Pros: Cost efficient since tasks are sub-divided and specialized tasks, improvements/ innovations each area most likely to occur
Cons: Coordination becomes difficult since number of functions and subfunctions grows
Centralized vs Decentralized
Centralized (U-Form): Decision making at the top
Decentralized (M-Form): Decision making distribute among lower levels.
Drucker claims strategy/structure must follow strategy/structure.
Strategy, structure
M-Form Organizational Chart
Mostly structured along divisional lines/ a conglomeration of semi-independent U-Forms business units appealing to different consumers’ income and taste.
Matrix organizational structure
Employees report to more than one manager
Mechanical skills vs cognitive skills
M: pay more, more work
C: Pay more, less work
N-Form Organizational Chart
Not hierarchical but fluid and network-like. Nohria claims that if large companies are to survive and prosper, they have to change from M-Form to N-Form
Organizations constantly try to balance their need to be:
innovative with the need to be flexible- they need work to be done productively, but they also need to be prepared for changes in their environment
Roberts claims strategy/structure must follow strategy/structure.
Structure, strategy
U Form Organizational Chart
Most likely to group employees by functions like marketing or HR (Managed as a single unit)
What’s supported by a bureaucracy
Staffing and promotion decisions are based on clear standards. The structure is hierarchical with clear levels of management and subordinates and the organization is governed by a set of objectives laws, rules, and procedures.
