Lecture 11: Chapter 13: Organizational structure

Question 1

What is organizational structure?

Answer 1

The division of labor and the patterns of coordination, communication, workflow and formal power, that direct the organizational activities

Question 2

What are the two types of division of labor and what is the difference between them?

Answer 2

1. Horizontal: more narrow task, people doing different tasks
2. Vertical: more layers within an organization (manager overseeing tasks)

Question 3

When is division of labor effective?

Answer 3

If the activities are coordinated. Often there’s a mix between horizontal and vertical division of labor

Question 4

What are the 2 core aspects of organizational structure?

Answer 4

1. Division of labor
2. Coordinating work activities

Question 5

What is coordinating of activities in an organization?

Answer 5

The ability to divide work among people who have to be coordinated or coordinate each other

Question 6

What are 3 types of coordination of activities?

Answer 6

1. Informal communication
2. Formal hierarchy
3. Standardization

Question 7

What is informal communication in the coordination of work activities? Name 5 aspects

Answer 7

• Sharing info on mutual tasks
• Forming common mental models
• More flexible than formal communication
• Vital in non-routine, ambiguous situations
• Aided by direct communication, liaison/integrator roles, temporary teams

Question 8

What is the difference between liaison and integrator roles?

Answer 8

Both are informal ways of communicating

Liaison: bridging 2 parties that normally don’t communicate with each other, not a particular common goal

Integrator: facilitate communication to work to common goal

Question 9

What is formal hierarchy in coordinating activities? What are the 2 strategies?

Answer 9

Direct supervision with some individual having legitimate power over others.

Strategies:
1. Direct supervision
2. Formal communication channels

Question 10

Why is a formal hierarchy not always suitable for complex situations?

Answer 10

It lacks quick adaptability

Question 11

What is standardization in coordinating activities? What are the 3 strategies?

Answer 11

Creating routine patterns of behavior and output

Strategies:
1. Standardized processes (flowcharts)
2. Standardized outputs (customer satisfaction)
3. Standardized skills (training)

Question 12

Why are liaison roles less common today?

Answer 12

Digital communication and decentralized decision making have made it easier and more acceptable for leaders and staff of work units to informally communicate directly with their counterparts in other work units

Question 13

What is concurrent engineering?

Answer 13

Temporarily organize employees from several departments into cross-functional teams

Question 14

What is the waterfall effect/over the wall effect?

Answer 14

Traditional product development suffers from inefficient coordination due to the lack of informal two-way communication and feedback

Question 15

What are the 4 most important elements of organizational structure?

Answer 15

1. Span of control
2. Centralization
3. Formailization
4. Departmentalization

Question 16

What is span of control? What does wide-flat and narrow-tall mean?

Answer 16

The number of people that directly report to the person who is on the next level in the hierarchy

Wide-flat: many direct reports, few levels in hierarchy
Narrow-tall: less direct reports, many levels in hierarchy

Question 17

What are 3 problems of taller structures?

Answer 17

• Lower quality + timely upward information
• Cost
• Less empowerment and engagement

Question 18

On what 3 things does the optimal span of control depend?

Answer 18

1. Coordination mechanisms that are used (e.g. standardization)
2. Type of tasks
3. Interdependence of employees

Question 19

What is centralization?

Answer 19

The degree to which formal decision authority is held by a small group of people

Centralization: decisions made by few people
Decentralization: decision making dispersed throughout the organization

Question 20

What is formalization? Give some examples

Answer 20

The extent to which there is standardization of behavior

E.g. rules, procedures, training

Question 21

What are advantages and disadvantages of formalization?

Answer 21

+: efficiency, compliance, consistency

-: less flexibility, learning, creativity, autonomy, job satisfaction, higher work stress

Question 22

What is a mechanistic structure?

Answer 22

Organizational structure with a narrow span of control and high degree of formalization and centralization

Question 23

What is an organic structure?

Answer 23

Organizational structure with wide span of control, low formalization and decentralized decision making

Question 24

What are the differences between mechanistic and organic structures concerning environment, task variability/analyzability and strategies?

Answer 24

Environment:
- Mechanistic: stable and munificent
- Organic: dynamic and hostile

Task variability/analyzability:
- Mechanistic: high var, low anal.
- Organic: low var, high anal.

Strategies:
- Mechanistic: low-cost
- Organic: innovation

Question 25

Which organizational structure is better for uncertain and dynamic environments?

Answer 25

Organic structures

Question 26

What is departmentalization? What are the 3 functions?

Answer 26

Determines how the employees are grouped together. 1. Establish chain of command and interdependencies 2. Creates common mental models 3. Encourages coordination by informal communication

Question 27

What are the 6 structural forms of departmentalization?

Answer 27

1. Functional 2. Divisional 3. Simple 4. Team-based 5. Matrix 6. Network (only study first 2 for exam)

Question 28

What is a functional structure of departmentalization? Give a benefit and a downside

Answer 28

Functional = division of employees based on their specific knowledge/skills --> +: Specialized groups can serve entire organization --> -: Stronger focus on specific skills of employees rather than the product

Question 29

What is a divisional structure of departmentalization? On which 3 things is it based? Give an example of each

Answer 29

Employees are grouped based on: 1. Geographical areas: china and VS department 2. End products/services: diabetes, cardiac/vascular, non invasive therapy 3. Client groups: media firms, general public, tax professionals, legal professionals

Question 30

What is a advantage and a disadvantage of divisional structures?

Answer 30

+: good for growing companies, since new divisions can be added -: inefficient use of resources and less knowledge is shared between divisions

Question 31

What type of departmentalization structure does the VSPA have?

Answer 31

Divisional structure

Question 32

What does it mean when you say there are contingencies to organizational designs? What are the 4 main contingencies?

Answer 32

Ideas or design that work well in a particular situation might not work as well in others 1. External environment 2. Organizational size 3. Technology 4. Organizational strategy

Question 33

What is the contingency for complex and simple environments?

Answer 33

Complex: decentralization Simple: centralization

Question 34

What is the contingency for diverse vs. integrated environments?

Answer 34

Diverse: divisional structure and decentralization necessary Integrated: divisional structure and decentralization less necessary

Question 35

What is the contingency for dynamic vs. stable environments?

Answer 35

Dynamic: organic structure Stable: mechanistic structure

Question 36

What is the contingency for hostile vs. munificent environment?

Answer 36

Hostile: high competition, scarce resources. Organic structure Munificent: ample resourses, low competition. Mechanistic structure

Question 37

How does organizational size influence design? Name 4 aspects

Answer 37

In larger organizations: - More job specialization - More standardization - More hierarchy - More decentralization

Question 38

What are the 2 contingencies related to technology?

Answer 38

1. Task variability: how predictable a job is everyday --> Low: routine work 2. Task analyzability: how much the job can be performed using known procedures and rules --> Low: unique situations, few guidelines Organic structure: high variability, low analyzability Mechanistic structure: low variability, high analyzability

Question 39

What is organizational strategy?

Answer 39

The way the organization positions itself in its environment in relation to its stakeholders, given the organization's resources, capabilities and mission It shapes characteristics of contingencies and the organization's structure

Question 40

How is technology relevant when designing an organizational structure?

Answer 40

It influences whether it should adopt an organic or mechanistic structure