Management and organizational structure Flashcards
Determinants of organizational structure (31 cards)
Determinants of organizational structure
(main)
- size of the organization
- nature of the industry
- technology
- strategy and goals
- environmental uncertainty
- culture and leadership
Other determinants
- human resources
- geographical dispersion
- regulatory environment
- history and tradition
Size of the organization
Scale or magnitude of an entity, indicating the number of individuals, resources, and activities within the organization.
Impact of organizational size on structure:
Hierarchy
Span of control
Hierarchy:
Larger organizations tend to have more hierarchical levels.
Span of control:
Number of subordinates a manager oversees, increases with organizational size.
Impact of organizational size on structure:
Bureaucracy and formalization
Larger organizations often exhibit more bureaucratic features, relying on rules and formal procedures to manage complexity.
Impact of organizational size on structure:
Specialization
Departmentalization
Specialization:
Larger organizations require more specialization to handle diverse tasks.
Departmentalization is influenced by the need to manage complexity efficiently.
Impact of organizational size on structure:
Communication channels
Larger organizations face challenges in communication due to increased complexity.
Formal and informal communication channels need to be carefully managed for effective information flow.
Impact of organizational size on structure:
Centralization vs decentralization
Centralization:
Decision-making processes may become more centralized in larger organizations.
Decentralization becomes challenging as size increases, impacting the speed and flexibility of decision-making.
Impact of organizational size on structure:
Flexibility and adaptability
Smaller organizations tend to be more flexible and adaptable.
Larger organizations may struggle with agility due to increased layers of hierarchy and formalization.
Impact of organizational size on structure:
Structural adjustments
Organizational size necessitates periodic reviews and adjustments to the structure.
A dynamic approach to organizational design is crucial to accommodate changes in size and complexity over time
Impact of organizational size on structure:
Technology integration
Technology plays a crucial role in managing communication and coordination challenges in larger organizations.
Information technology becomes a vital tool for enhancing efficiency and connectivity.
Impact of organizational size on structure:
Leadership and management
Leadership styles may vary based on organizational size.
Effective management in larger organizations requires strategies for handling increased complexity and ensuring alignment with organizational goals.
Impact of organizational size on structure:
Challenges and Opportunities
Larger organizations face challenges in maintaining communication, coordination, and flexibility.
Smaller organizations may encounter challenges in resource availability but often have greater adaptability.
Impact of organizational size on structure:
Challenges and Opportunities
Nature of the industry
Different industries have unique characteristics, demands, and challenges, influencing how work is organized and how decisions are made
Impact of the nature of the industry on organizational structure:
Technology intensity
High-Tech Industries:
Organizations often require flexible and dynamic structures. Matrix structures or project-based teams may be common to foster innovation.
Traditional Industries:
Industries with more traditional technologies, like manufacturing, may have more hierarchical and mechanistic structures.
Impact of the nature of the industry on organizational structure:
Degree of competition
Highly Competitive Industries:
Intense competition often drives the need for quick decision-making and adaptability. Flatter structures and decentralized decision-making may be prevalent.
Less Competitive Industries:
In less competitive industries, where stability is more common, organizations might opt for more centralized and hierarchical structures.
Impact of the nature of the industry on organizational structure:
Regulatory environment
Heavily Regulated Industries:
Organizations in industries with strict regulations, such as healthcare or finance, may have more formalized and bureaucratic structures to ensure compliance.
Less Regulated Industries:
Industries with fewer regulations may have more flexibility in their structures, allowing for innovation and experimentation.
Impact of the nature of the industry on organizational structure:
Consumer behavior and expectations
Consumer Goods Industries:
Organizations focused on consumer goods may adopt structures that enable quick responses to changing consumer preferences. Decentralized structures and market-oriented approaches are common.
Industrial Goods Industries:
Organizations in industrial goods may emphasize efficiency and cost control, leading to more centralized and mechanistic structures.
Impact of the nature of the industry on organizational structure:
Innovation requirements
Innovative Industries:
Industries where innovation is crucial, such as technology or pharmaceuticals, may benefit from organic and flexible structures that encourage creativity and collaboration.
Stable Industries:
In stable industries, where innovation is less critical, organizations may prefer more stable and hierarchical structures.
Impact of the nature of the industry on organizational structure:
Globalization
Global Industries:
Organizations operating globally often require structures that facilitate coordination across diverse locations. Matrix structures or network structures may be effective.
Local Industries:
Organizations serving local markets may have simpler structures, focusing on the specific needs of the local customer base.
Impact of the nature of the industry on organizational structure:
Name of products or services
Complex Products/Services:
Industries with complex products or services may adopt matrix structures to accommodate cross-functional collaboration.
Standardized Products/Services:
Industries with standardized offerings might lean towards more mechanistic structures to achieve efficiency and cost-effectiveness.
Impact of the nature of the industry on organizational structure:
Supply chain dynamics
Complex Supply Chains:
Organizations with intricate supply chains may adopt structures that enhance coordination and communication across different stages of the supply chain.
Simple Supply Chains:
In industries with straightforward supply chains, simpler structures may suffice.
Technology
Significant determinant of organizational structure
Shapes how work is organized, how information flows, and how decisions are made within an organization
Can influence various aspects of design and management
