Chapters 3-4

Question 1

Three components of organizational structure?

Answer 1

1. Designates formal reporting relationships, including the number of levels in the hierarchy and the span of control of managers and supervisors
2. Identifies the grouping together of individuals into departments and of departments into the total organization
3. structure includes the design of systems to ensure effective communication, coordination, and integration of efforts across departments

Question 2

What structural devices can organizations use to achieve vertical Information linkage?

Answer 2

• Hierarchical referral: if a problem arises that can’t be solved it can be referred up to the next level. then answer can be passed down to lower levels
• Rules and plans: can be established so employees know how to respond without communicating directly with their manager.
• Vertical information systems: include reports/communications distributed to managers

Question 3

What structural devices can organizations use to achieve Horizontal Information linkage?

Answer 3

• Information Systems: ex. knowledge base
• Direct Contact: ex. appoint a liaison (between two departments)
• Task Forces: when linkage involves several departments (group of liaisons )
• Full-Time Integrator: (ex. project manager)
• Teams: ex creating a special project team. (Aargon)

Question 4

Three elements of organizational structure design?

Answer 4

• work activities
• reporting relationships
• departmental grouping options

Question 5

What are Five possible options for departmental groupings?

Answer 5

• Functional grouping: places together employees who perform similar functions or work processes or who bring similar knowledge and skills to bear
• Divisional grouping: people are organized by what organization produces.
• Multi-focused grouping: grouping by multiple groupings (matrix based)
• Horizontal grouping: organized around core work processes, information etc.
• Virtual network grouping: loosely connected cluster of separate components

Question 6

Describe a functional Structure?

Answer 6

• activities are grouped together by common function from bottom to the top of the organization
• effective if there is little need for horizontal coordination
• promotes economy of scale within functions
• main weakness: slow response to environmental changes that require coordination across departments

Question 7

Describe a Functional Structure with Horizontal Linkages?

Answer 7

• Organizations compensate for the vertical functional hierarchy by installing horizontal linkages
• Managers improve horizontal coordination by using info systems, direct contact between departments, full-time integrators, task forces, or teams

Question 8

Describe a Divisional Structure?

Answer 8

• The structuring of the organization according to individual products, services, product groups, major projects, or profit centres
• decentralizes decision making as lines of authority converge at a lower level in the hierarchy
• Strengths: allow for fast changes in unstable environments, high coordination across functions, best in large organizations with several products
• Weaknesses: Eliminates economies of scale in functional departments, poor coordination across product lines, eliminates technical specialization

Question 9

Describe a Geographical Structure?

Answer 9

• Each geographic unit includes all functions required to produce and market products or services in that region, frequently used by large nonprofit organizations
• strengths and weaknesses similar to divisional

Question 10

Describe a Matrix Structure?

Answer 10

• A strong form of horizontal linkage in which both product and functional structures (horizontal and vertical) are implemented simultaneously
• appropriate when: 1. Pressure exists to share scarce resources across product lines,2. Environmental pressure exists for two or more critical outputs, 3. The environmental domain of the organization is both complex and uncertain, creating high need for interdependence between departments

Question 11

Compare a Functional Matrix vs a Product matrix structure?

Answer 11

• the functional bosses have primary authority and the project or product managers simply coordinate product activities.
• • in a product matrix, the project managers have primary authority, and functional managers assign expertise as needed.

Question 12

What are the strengths of a Matrix Structure?

Answer 12

• Achieves coordination necessary to meet dual demands from customers
• Flexible sharing of HR across products
• Suited to complex decisions and frequent changes in unstable environment
• Provides opportunity for both functional and product skill development
• Best in medium-sized organizations with multiple products

Question 13

what are the weaknesses of a Matrix Structure?

Answer 13

• Causes participants to experience duel authority, which can be frustrating/confusing
• Means participants need good interpersonal skills and extensive training
• Time consuming; involves frequent meetings and conflict resolution sessions
• Won’t work unless participants understand it and adopt collegial relationships
• Requires great effort to maintain power balance

Question 14

Describe a Horizontal Structure?

Answer 14

• virtually eliminates both vertical hierarchy and departmental boundaries by organizing teams of employees around core work processes
• The culture is one of openness, trust, and collaboration, focused on continuous improvement
• Structure is created around cross-functional core processes rather than tasks, function, or geography so that boundaries between departments are eliminated
• Teams have the freedom to think creatively and respond flexibly to new challenges that arise

Question 15

What are the strengths and weaknesses of a Horizontal Structure?

Answer 15

• Strengths: Promotes flexibility and rapid response to changes in customer needs, Directs the attention of everyone toward the production and delivery of value to the customer, Each employee has a broader view of organizational goals, Promotes a focus on teamwork and collaboration, Improves quality of life for employees by offering them the opportunity to share responsibility, make decisions, and be accountable for outcomes
• Weaknesses: Determining core processes is difficult and time consuming, Requires changes in culture, job design, management philosophy, and information and reward systems,Traditional managers may balk when they have to give up power and authority,Requires significant training of employees to work effectively in a horizontal team environment, Can limit in-depth skill development

Question 16

Describe a Virtual Network Structure?

Answer 16

• The firm subcontracts many or most of its major processes to separate companies and coordinates their activities from a small headquarters organization
• The virtual network organization may be viewed as a central hub surrounded by a network of outside specialists
• The hub maintains control over processes in which it has world-class or difficult-to-imitate capabilities and then transfers other activities – along with the decision making and control over them – to other organizations
• These partner organizations organize and accomplish their work using their own ideas, assets, and tools

Question 17

Strengths and Weaknesses of a Virtual Network Structure?

Answer 17

Strengths
• Enables even small organizations to obtain talent and resources worldwide
• Gives a company immediate scale and reach without huge investments in factories, equipment, or distribution facilities
• Enables the organization to be highly flexible and responsive to changing needs
• Reduces admin overhead costs
Weaknesses
• Managers don’t have hands-on control over many activities and employees
• Requires a great deal of time to manage relationships and potential conflicts with contract partners
• Risk or organizational failure if a partner fails to deliver or goes out of business
• Employee loyalty and corporate culture may be weak because employees feel they can be replaced by contract services

Question 18

Describe a Hybrid Structure?

Answer 18

• A structure that combines characteristics of various structural approachs tailored to specific strategic needs
• Tend to be used in rapidly changing environments because they offer the organization greater flexibility
• When a corporation grows large and has several products or markets, it typically is organized into self-contained divisions of some type
• Functions that are important to each product or market are decentralized to the self-contained units
• However, some functions that are relatively stable and require economies of scale and in-depth specialization are also centralized at headquarters

Question 19

What are Signs of the organization structure being out of alignment?

Answer 19

o Decision making is delayed or lacking in quality
o The organization does not respond innovatively to a changing environment
o Employee performance declines and goals are not being met
o Too much conflict is evident

Question 20

What the Organizational environment ?

Answer 20

• Organizational environment is all elements that exist outside the boundary of the organization and have potential to affect all or part of the organization

Question 21

What is the Task Environment?

Answer 21

• Sectors with which the organization interacts directly and that have a direct effect on the organization’s ability to achieve its goals
• Typically includes the industry, raw materials, and market sectors (and sometimes HR and international sectors)

Question 22

What is the General Environment?

Answer 22

• Includes those sectors that may not directly affect the daily operations of a firm but will indirectly influence it
• Often includes the government, sociocultural, economic conditions, technology, and financial resources sectors

Question 23

What are 2 essential ways the environment influences organizations?

Answer 23

o The need for information about the environment

o The need for resources from the environment

Question 24

what is the Simple-Complex Dimension?

Answer 24

• The number and dissimilarity of external elements relevant to an organization’s operation
• The more external factors that regularly influence the organization and the greater number of other companies in an organization’s domain, the greater the complexity
• A complex environment is one in which the organization interacts with and is influenced by numerous diverse external elements
• In an simple environment, the organization interacts with and is influenced by only a few similar external elements

Question 25

what is the Stable-Unstable Dimension?

Answer 25

• The state of an organization’s environmental elements (whether elements are dynamic)
• An environmental domain is stable if it remains the same over a period of months or years
• Under unstable conditions, environmental elements shift abruptly, and most environmental domains are increasingly unstable
• Instability may occur when competitors react with aggressive moves and countermoves regarding advertising and new products