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departments are grouped together
based on similar organizational outputs. With a divisional structure, also called an M-form(multidivisional) or a decentralized form, separate divisions can be organized with responsibility for individual products, services, product groups, major projects or programs, divisions, businesses, or profit centers.
also sometimes called a product structure, program structure, or self-contained unit structure.
divisions are created as self-contained units, with separate functional departments for
each division.
Each department is smaller and focuses on a single product line or customer segment. Departments are duplicated across product lines.
differences of opinion among R&D, marketing, manufacturing, and finance would be resolved at the divisional level rather than by the top executive
duplication of resources and the high cost of running separate divisions. they are smaller than units that serve the entire organization and can respond more flexibly to changes in their
particular business environment.
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• Mechanistic design means
that the organization is characterized by machine-like standard rules, procedures, and a clear hierarchy of authority. These organizations are highly formalized with decision making at the top.
o Specialized tasks
o Many rules, formalized
o Vertical communication
o Strict hierarchy of authority
o Centralized structure
o Large size, efficiency strategy, stable environment, rigid culture, manufacturing technology
• Organic design means that the organization is much looser,
free-flowing, and adaptive. Rules and regulations are often not written down, or if they are, they are flexibly applied. People generally find their own way through the system. Decision-making authority is de-centralized.
o Decentralized structure
o Empowered roles
o Few rules, informal
o Horizontal communication
o Collaborative teamwork
o Adaptive, innovative, small size, changing environment, service technology
o Differentiation
Focus on uniqueness
• Example (broad scope): Apple
• Example (narrow scope): Edward Jones Investments
Learning orientation, acts in a flexible, loosely knit way, with strong, horizontal coordination
Values and builds in mechanisms for customer intimacy
Rewards employee creativity, risk-taking, and innovation
o Low-cost Leadership
Focus on efficiency, low cost
• Example (broad scope): Walmart
• Example (narrow scope): Allegiant Travel
Efficiency orientation,
strong central authority, tight cost control, with frequent, detailed control reports
Standard operating procedures
Highly efficient procurement and distribution systems
Close supervision, routine tasks, limited employee empowerment
o Prospector
Innovate, take risks, seek out new opportunities, grow.
Learning oriented, flexible, fluid, decentralized structure
Strong capability in research
o Defender
Stability, even to the point
of entrenchment, hold on to current customers.
Efficiency oriented, centralized authority, tight cost control
Emphasis on production efficiency, low overhead
Close supervision, little employee empowerment
o Analyzer (Amazon)
Maintain a stable business while innovating on the periphery/calculated risks.
Balances efficiency and learning, tight cost control with flexibility and adaptability
Efficient production for stable product lines, emphasis on creativity, research,
risk-taking for innovation
o Reactor
No clear organization approach, design characteristics may shift abruptly, depending on current needs
Organizational structure includes which of these?
a.
The set of formal tasks assigned to individuals
b.
The set of formal tasks assigned to departments
c.
The design of systems to ensure effective coordination of employees across departments
d.
Formal reporting relationships
e.
All of these are part of organizational structure.
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Terms in this set (24)
organizing
deployment of organizational resources to achieve strategic goals
Organizational Structure
1. set of formal tasks assigned to
individuals and departments
2. formal reporting relationships, including line of authority, decision responsibility, number of hierarchical levels, and spans of managers control
3. design of systems to ensure effective coordination of employees across departments
organization chart
visual representation of an organization's structure
work specialization
sometimes called division of labor is the degree to which organizational tasks are subdivided into separate jobs.
chain of command
unbroken line of authority that links all employees in an organization and shows who reports to whom
1. unity of command: each employee is held accountable to only one supervisor
2. scalar principle: refers to a clearly defined
line of authority in the organization that includes all employees
Three characteristics of authority
1. Authority is vested in organizational positions, not people
2. authority flows down the vertical hierarchy.
3. authority is accepted by subordinates
Responsibility
duty to perform the task or activity as assigned
Accountability
the people with authority and responsibility are subject to reporting and justifying task outcomes to those above in the chain of command
Delegation
process that managers use to transfer authority and responsibility to positions below them in the hierarchy
Line Departments
perform tasks that reflect the organization's primary goal and mission
Staff Departments
includes all those that provde specialized skills in support of line departments
ex. markeing, labor relationss, research, accounting, and HR
Line Authority
people in managerial positions have the formal authority to direct and control immediate suboardinates
Staff Authority
Narrower and includes the right to advise, recommend, and counsel in the staff specialists' area of expertise
Span of Management
number of employees reporting to a supervisor. it's sometimes called "span of control"
1. Work performed by
subordinates is stable and routine
2. subordinates perform similar work tasks
3. subordinates are concentrated in single location
4. subordinates highly trained and need little direction in performing tasks
5. Rules and procedures defining task activities are available
Tall Structure
has an overall narrow span and more hierarchical levels
Flat Structure
has a wide span, is horizontally
Centralization
means that decision authority is pushed downward to lower organization levels
Decentralization
decision authority is pushed downward to lower organization to make decisions
Factors that influence Centralization v. Decentralization
1. Greater change and uncertainty in the environment are usually associated with decentralization
2. The amount of centralization or decentralization should fit the firm's strategy
3. In times of crisis or risk of company failure, authority may be centralized at the top
Departmentalization
basis for grouping positions into departments and departments into the total organization
Five Approaches to Structural Design
1. Vertical Functional
2. Divisional
3. Matrix
4. Team-based
5. Virtual Network
Functional Structure
also called U-form (unitary structure), acitviites are grouped together by common function from the bottom to the top of the organization
Divisional Structure
departments are grouped together based on similar organizational outputs and also called M-firm (multidivisional) or a decentralized form. Also called product structure, program structure, or self-contained unit structure
Matrix Approach
combines both aspects of both functional and divisional structures simultaneously in the same part of the organization.
success depends on two-boss employees (those who report to two supervisors at the same time), matrix boss (product of functional boss who is responsible for one side of the matrix), and top leader (oversees both the product and functional chains of command)
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