lec7: Organizational Structure & Design

Question 1

Organizing

Answer 1

Arranging and structuring work to accomplish an organization’s goals.

Question 2

Organizational Structure

Answer 2

The formal arrangement of jobs within an organization.

Question 3

Purpose of Organizing (6)

Answer 3

1. Divides work to be done into specific jobs and departments
2. Assigns tasks and responsibilities associated with individual jobs
3. Coordinates diverse organizational tasks
4. Establishes relationships among individuals, groups, and departments
5. Establishes formal lines of authority
   6.Allocates and deploys organizational resources

Question 4

Elements of Organizational Structure (6)

Answer 4

1. work specialization
2. departmentalization
3. chain of command
4. span of control
5. centralization vs decentralization
6. formalization

Question 5

what is meant by work specialization?

Answer 5

degree to which tasks in the organization are divided into separate jobs with each step completed by a different person.
however overspecialization can cause human boredom, poor quality, increased absenteeism, and higher turnover.

Question 6

types of departmentalization

Answer 6

1. functional
   2.Geographical
2. product
3. process
4. customer

Question 7

Departmentalization by type
functional

Answer 7

grouping jobs by functions performed

Question 8

Departmentalization by type
geographical

Answer 8

Grouping jobs on the basis of territory or geography
(often used in multi-national companies)

Question 9

Departmentalization by type
product

Answer 9

Grouping jobs by product line

Question 10

Departmentalization by type
process

Answer 10

Grouping jobs on the basis of customer flow

Question 11

Departmentalization by type
customer

Answer 11

Grouping jobs by type of customer and needs

Question 12

advantages of using functional departmentalization

Answer 12

• efficiencies from putting together similar specialties and people with common skills, knowledge, and orientation.
• coordination within functional area
• in depth specialization

Question 13

disadvantages of using functional departmentalization

Answer 13

• poor communication across functional areas
• limited view of organizational goals

Question 14

advantages of using geographical departmentalization

Answer 14

• more effective and efficient handling of specific regional issues that arise
• serve needs of unique geographical markets better

Question 15

disadvantages of using geographical departmentalization

Answer 15

• duplication of functions
• can feel isolated from other organizational areas

Question 16

advantages of using product departmentalization

Answer 16

• allows specialization in particular products and services
• managers can become experts in their industry

Question 17

disadvantages of using product departmentalization

Answer 17

• duplication of functions
  limited view of organizational goals

Question 18

advantages of using process departmentalization

Answer 18

• more efficient flow of work activities

Question 19

disadvantages of using process departmentalization

Answer 19

• can only be used with certain types of products
  (ex: wood, clothes)

Question 20

advantages of using customer departmentalization

Answer 20

• customers’ needs and problems can be met by specialists

Question 21

disadvantages of using customer departmentalization

Answer 21

• duplication of functions
• limited view of the organizational goals

Question 22

what is meant by chain of command

Answer 22

The continuous line of authority that extends from upper levels of an organization to the lowest levels of the organization and clarifies who reports to whom.

Question 23

what is meant by authorities

Answer 23

The rights inherent in a managerial position to tell people what to do and to expect them to do it.

Question 24

what is meant by reporting

Answer 24

The obligation or expectation to perform

Question 25

what is meant by span of control

Answer 25

The number of employees who can be effectively and efficiently supervised by a manager.

Question 26

Width of Span is affected by

Answer 26

-Skills and abilities of the manager -Employee Characteristics -Similarity and Complexity of the tasks

Question 27

what is meant by centralization

Answer 27

The degree to which decision making is concentrated at upper levels in the organization

Question 28

what is meant by decentralization

Answer 28

The degree to which decision making is pushed down to the managers who are closest to the action

Question 29

More Centralization means

Answer 29

-Environment is stable -Organization is facing a crisis -Lower-level managers are not experienced at making decisions -Company is large

Question 30

More Decentralization means

Answer 30

- Environment is complex, uncertain -Lower-level managers are capable & experienced at making decisions -Company is geographically spread

Question 31

what is meant by formalization

Answer 31

degree to which jobs within the organization are standardized and the extent to which employee behavior is guided by rules and procedures

Question 32

high formalization vs low formalization

Answer 32

Highly formalized jobs: offer little discretion over what is to be done Low formalization: means fewer constraints on how employees do their work

Question 33

Models of Organizational Design - mechanistic

Answer 33

-High specialization -Rigid departmentalization -Clear chain of command -Narrow spans of control -Centralization -High formalization

Question 34

Models of Organizational Design - organic

Answer 34

-Cross-functional teams -Cross-hierarchical teams -Free flow of information -Wide spans of control -Decentralization -Low formalization

Question 35

Contingency Factors (6)

Answer 35

1. strategy and structure 2. size and structure 3. technology and structure 4. environmental uncertainty and structure 5. innovation 6. cost minimization

Question 36

strategy and structure (contingency factor)

Answer 36

Achievement of strategic goals is facilitated by changes in organizational structure that accommodate and support change. Organization structure follows strategy

Question 37

size and structure (contingency factor)

Answer 37

As an organization grows larger, its structure tends to change from organic to mechanistic with increased specialization, departmentalization, centralization, and rules and regulations.

Question 38

technology and structure (contingency factor)

Answer 38

Organizations adapt their structures to their technology Routine technology: mechanistic Non-routine technology :organic

Question 39

environmental uncertainty and structure (contingency factor)

Answer 39

Mechanistic organizational structures tend to be most effective in stable and simple environments. The flexibility of organic organizational structures is better suited for dynamic and complex environments.

Question 40

innovation (contingency factor)

Answer 40

Pursuing competitive advantage through meaningful and unique innovations favors an organic structuring.

Question 41

cost minimization (contingency factor)

Answer 41

Focusing on tightly controlling costs requires a mechanistic structure for the organization