Ch 10 - Organization Structure Flashcards
What changes have been seen lately with general organizational structure? Why might some employees like this? why might some not?
orgs are getting flatter and decentralized
like: more autonomy (oft leads ot more job satisfaction and fulfillment)
not like: some employees like hierarchy because it lessens the stress of uncertainty
What is the difference between organizing and strategy? What is the definitnion of organizting?
Strategy defines what to do, organizing defines how to do it **organizing follows strategy
Organizing: the deployment of organizational resources to achieve strategic goals
What does an org structure outline?
- the set of formal tasks assigned to individuals and departments
- formal reporting relationships
- systems to ensure effective coordination of employees across department
What is division of labour? What happens when division of labour is high?
the degree to which organizational tasks are subdivided into separate jobs
high = jobs bery specialized and leads to employee isolation and boredom
What is chain of command? Unity of command? Scalar principle?
chain = unbroken line of authority that links all employees in an organization and shows who reports to whom
unity of command = each employee is held accountable to only one supervisor
scalar principle = a clearly defined line of authority in the organization that includes all employees
What is authority? What are 3 main characteristics?
= formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve organizationally desired outcomes
- Auth vested in organizational positions, not people
- Auth flows down the vertical hierarchy
- Auth is accepted by subordinates
What are responsibility, accountability, and delegation? How does resp relate to authority?
Responsibility: the duty to perform the task or activity as assigned
– with authority: auth should match resp
—-> with more resp for task but little auth, task becomes v hard
—-> with more auth and less resp, may wield auth to acheive frivolous outcomes (tyranny vibes)
Accountability: people with authority and responsibility are subject to reporting and justifying task outcomes to those above them in the chain of command (auth and resp aligned with accountabliity)
Delegation: process managers use to transfer authority and responsibility down the hierarchy
What is line authority vs staff authority?
line = managers have formal authority to direct and control immediate subordinates
staff = narrow authority that includes the right to ADVISE, RECCOMMEND, and COUNSEL in the staff specialists’ area of expertise
difference:
- line is formal auth, staff is only advising
- line depts perform tasks that reflect org goals + mission, staff depts SUPPORT line depts
ex: finance dept, HR dept –> all coordinate with other depts to help em acheive goals
What is span of management/control? What is a typical span number for trad org and for new lean org?
number of employees reporting to a supervisor, thus how closely supervisor can monitor each
trad = 7-10 subordinates per mger
lean = 30-40+
What factors suggest an org should go with a larger span of control (less supervision)?
- Work performed by subordinates is stable and routine
- Subordinates perform similar work
- Subordinates are in one location
- Subordinates are highly trained
- Rules and procedures are defined
- Support systems and personnel are available
- Few nonsupervisory activities
- Manager prefers a large span
ex: assembly line
Tall structure vs wide? What is a common structural problem related to this? What % of mgers surveyed thought their org had too many levels of mgmt?
Tall structure: span of management is narrow and has many hierarchical levels
Flat structure: span of management is wide and has few hierarchical levels
problem: too many levels with a span that is too narrow
72% of mgers thought their org had too many levels!
What is a big problem that comes from too many management levels? What is the result of this?
routine decisions are made too high in the organization
= pulls higher-level executives away from important, long-range strategic issues
= limits the creativity, innovativeness, and accountability of lower-level managers
= decisions cant be made quickly
What is centralization? Decentralization? What influences cetranlizatoin?
Centralization: decision authority is located near the top of the organization (C suite)
Decentralization: authority pushed downward to lower organization levels (spread, sometimes even to bottom level of employees – Zappos)
influencing factors:
- less centralization when env is uncertain and changing lots
- needs to fit the firm’s strategy (ex: providing local, specialty goods = decentralized + more decision making to each store)
- more centralization when in a crisis
What are the benefits of decentralization?
- relieve the burden on top managers
- make greater use of employees’ skills and abilities
- ensure that decisions are made close to the action by well-informed people
- permit more rapid response to external changes
Which of the following characteristics is usually associated with organizations that use a decentralized structure?
a) Tight vertical control
b) Mass production
c) Change and uncertainty
d) Large number of hierarchical levels
c) Change and uncertainty
What is departmentalization? What are the main approaches?
basis for grouping positions into departments and departments into the total organization
Approaches:
a) Functional
b) Divisional
c) Matrix
d) Team
e) Virtual network
What is the functional approach to departmentalization? Other name for it? What are main org structure factors?
grouping activities by common FUNCTION from the bottom to the top of the organization
= based on similar skills, expertise, work activities, resource use
ex: accounting, manufacturing, HR
otjer name = U Form (unitary structure)
Factors
- vertical
- centralized
- coordinate work within dept
- rules and procedures governduties
- lower empl accept auth of those higher up
What are some pros and cons of functional structure?
Pro
- economies of scale and efficient resource use
- help empl develop in-depth skills bc working on variety of things and interact with experts in dept
- centralized = org has unified direction
Con
- separation across depts = poor commuication and coordination across depts = slow response to ecternal changes
- decisions abt more than one dept may pile up at top of org and be delayed
What is the divisional approach to departmentalization? Other name for it? What are main org structure factors?
Diverse departments are brought together to produce a single organizational output, whether it is a product, a program, or a service to a single customer
= Focuses company activities on local market conditions
= Competitive advantage: selling a product adapted to a given country
other name: M-form (multidivisional)/decentralized form/product structure/program structure/self-contained unit structure
factors
- division = self-contained unit with functional structure
- chain of command converges lower :. decisions made at divisional rather than top exec level
–> decentralized
What are some pros and cons of divisional structure?
Pros
- good when org produces products for diff markets bc each division is autonomous biz (ex: P&G with beauty div, home div, etc)
- good next step for functional org getting too big (bc comminication across whole org becomes big problem)
- more flexible and rsponsive to change bc units are smaller
- better coordination within unit
- empl more concern for cust needs bc focused only on one product/area
cons
- coordination across divisions is poor (divs may go in opposite directions)
- DUPLICATION OF RESOURCES + DEPTS
- smaller depts in each div can mean less technical, specialized knowledge
What is the matrix approach to departmentalization? What are main org structure factors? Who manages the whole org?
combines both functional and divisional approaches simultaneously, in the same part of the organization (goal is to improve horizontal coord and info sharing)
–> vertical structure provides traditional control within functional departments, and the horizontal structure provides coordination across departments
factors
- formal chain of command for both functional (vertical) and divisional (horizontal) relationships
- some employees have 2 bosses (violating unity of command concept)
–> empl need to work with both to reach joint decisions
whole org: top leader - oversees both product/geographic and functional chains of command
What are some pros and cons of matrix structure?
pros
- effective in rapodly changing env where org need to be flexible
- efficient use of HR bc specialists can be transferred one div to another
cons
- dual chain of command CONFUSION
- high level of conflict bc div and functional goals are fighting against each other
- time lost in meetings etc to resolve conflicts/decisions concerning the two areas
What are the types in the team approach to departmentalization?
Cross-functional teams: employees from various functional departments, meet as a team and resolve mutual problems (ex: one mktg, finance, HR, per product line)
– used: for change projects, such as new product or service innovation (still report to orig depts though)
Permanent teams: groups of employees organized similar to formal department, together to complete specific org task
Team-based structure: the entire organization is made up of horizontal teams that coordinate their work and work directly with customers to accomplish the organization’s goals (ex: Zappos)
What are some pros and cons of teams structure?
pros
- break down barriers across depts
- improves coordination + cooperation
- team members know each others issues so mor eeunderstanding + helpful
- quick adaptaion + decision making
- morale :) ppl are happy in bigger project teams compared to narrow dept tasks
- can get direct cust feedback
cons
- conflicts within teams
- dual loyalties (team and dept)
- lots of meeting time
- too decentralized sometimes (senior mgmt becomes useless and teams may make decisions good for them but not org bc disconnected from overall org goals)
