| A | B |
|---|
| organizing | the process of creating an organization's structure. challenge is to design structure that allows employees to effectively and efficiently do their work. |
| Organizational Structure | The formal arrangement of jobs within an organization |
| Organizational Design | developing or changing an organization's structure. A process involving decisions about six key elements: Work specialization. Departmentalization. Chain of command. Span of control. Centralization and decentralization. Formalization |
| Purposes of Organizing | Divides work to be done into specific jobs and departments. Assigns tasks and responsibilities associated with individual jobs. Coordinates diverse organizational tasks. Clusters jobs into units. Establishes relationships among individuals, groups, and departments. Establishes formal lines of authority. Allocates and deploys organizational resources. |
| Work Specialization | The degree to which tasks in the organization are divided into separate jobs with each step completed by a different person. also known as division of labor. increase efficiency and make overall organization more productive. |
| Overspecialization | can result in human diseconomies from boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnover. |
| managers today | see work specialization as an important organizing mechanism, but not as a source of ever-increasing activity. |
| Departmentalization | the basis by which jobs are grouped together after jobs have been divided up thru work specialization. |
| Functional Departmentalization | Grouping jobs by functions performed- can be used by all, although the functions change to reflect the organization's purpose and work. ex. terry has departments such as accounting, finance, etc. |
| Product Departmentalization | Grouping jobs by product line. each major product are is placed under authority of a manager who's responsible for everything having to do with that product line. ex. GM makes several types of cars. |
| Geographic Departmentalization | Grouping jobs on the basis of territory or geography. |
| Process Departmentalization | Grouping jobs on the basis of product or customer flow. example: different lines at the department of motor vehicles. |
| Customer Departmentalization | Grouping jobs by type of customer and needs |
| Functional Departmentalization | Advantages: Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations. Coordination within functional area. In-depth specialization; Disadvantages: Poor communication across functional areas. Limited view of organizational goals |
| Product Departmentalization | Advantages: Allows specialization in particular products and services. Managers can become experts in their industry. Closer to customers.; Disadvantages: Duplication of functions. Limited view of organizational goals |
| Geographical Departmentalization | Advantages: More effective and efficient handling of specific regional issues that arise. Serve needs of unique geographic markets better.; Disadvantages: Duplication of functions. Can feel isolated from other organizational areas |
| Process Departmentalization | Advantages: More efficient flow of work activities.; Disadvantages: Can only be used with certain types of products |
| Customer Departmentalization | Advantages: Customers’ needs and problems can be met by specialists.; Disadvantages: Duplication of functions. Limited view of organizational goals |
| Chain of Command | The continuous line of authority that extends from upper levels of an organization to the lowest levels of the organization and clarifies formal relationships. answers: who do I go to if I have a problem? Who am I responsible to? |
| can't discuss chain of command without discussing | authority, responsibility, and unity of command |
| Authority | The rights inherent in a managerial position to tell people what to do and to expect them to do it. to faciliate decision making and coordination, manager are given some authority to meet their responsibilities |
| Responsibility | The obligation or expectation to perform. |
| Unity of Command | The concept that a person should have one boss and should report only to that person. helps preserve the continous line of authority. without conflicting demands from multiple bosses can create problems. |
| authority, responsibility, and chain of command less relevant | as more organizations use self-managed and cross-functional teams and as new designs w/ multiple bosses are implemented |
| Span of Control | The number of employees who can be effectively and efficiently supervised by a manager. determines the # of levels and managers an organiation has. the wider = the more efficient. |
| larger span of control | consistent with managers efforts to reduce costs, speed up decision making, increase flexibility, get closer to customers and empower employees. to insure performance does'nt suffer, companies invest heavily in employee training. |
| Centralization | The degree to which decision-making is concentrated at a single point in the organizations. Organizations in which top managers make all the decisions and lower-level employees simply carry out those orders. benefits: stability, minimum cost of lower level employees b/c need not be highly trained. |
| Decentralization | Organizations in which decision-making is pushed down to the managers who are closest to the action. |
| centralization-decentralization | a company can never be completely centralized or decentralized. |
| as organization becomes more flexible and responsive | there has been a distinct trend toward decentralizing decision making. in large comp's especially, lower-level managers are "closer to the action" and typically have more detailed knowledge about problems and how to best solve them than do top managers |
| Employee Empowerment | Increasing decision-making authority at lower levels. |
| More Centralization | Environment is stable. Lower-level managers are not as capable or experienced at making decisions as upper-level managers. Lower-level managers do not want to have a say in decisions. Decisions are significant. Organization is facing a crisis or the risk of company failure. Company is large. Effective implementation of company strategies depends on managers retaining say over what happens. |
| More Decentralization | Environment is complex, uncertain. Lower-level managers are capable and experienced at making decisions. Lower-level managers want a voice in decisions. Decisions are relatively minor. Corporate culture is open to allowing managers to have a say in what happens. Company is geographically dispersed. Effective implementation of company strategies depends on managers having involvement and flexibility to make decisions |
| Formalization | The degree to which jobs within the organization are standardized and the extent to which employee behavior is guided by rules and procedures. Highly formalized jobs offer little discretion over what is to be done. expected to handle same input in exact same way for uniform and consistent output. explicit job descriptions, numerous orgazational rules, and clearly defined procedures covering work processes. Low formalization means fewer constraints on how employees do their work. degree varies widely, even w/in organizations |
| mechanistic organization | an orgazational design that's rigid and tightly controlled. high specialization, rigid departmentalization, clear chain of command, narrow spans of control, centralization, high formalization. tries to minimize the impact of differing personalities, judgements, and ambuguity b/c seen inefficient and inconsistent. no totally mechanistic organization |
| organic organization | an orgazational design that's highly adaptive and flexible. allows for rapid change as needed, employees handle diverse jobs and use employee teams. minimal rules and little direct supervision. cross-functional and heirachical teams, free flow of info, wide span of control, decentralization, low formalization |
| 4 contingenct variable | organization's strategy, size, technology, and degree of environmental uncertainty. |
| Overall strategy of the organization | Organizational structure follows strategy. if managers signficantly change strategy, the structure needs modifying. |
| Strategy and Structure factors | Innovation: Pursuing competitive advantage through meaningful and unique innovations favors an organic structuring.; Cost minimization: Focusing on tightly controlling costs requires a mechanistic structure for the organization.; Imitation: Minimizing risks and maximizing profitability by copying market leaders requires both organic and mechanistic elements in the organization’s structure. |
| Size and Structure: | As an organization grows larger, its structure tends to change from organic to mechanistic with increased specialization, departmentalization, centralization, and rules and regulations |
| Technology and Structure | Organizations adapt their structures to their technology. Woodward’s classification of firms based on the complexity of the technology employed: Unit production- of single units or small batches. best if organic; Mass production- of large batches of output. best if mechanistic; Process production- in continuous process of outputs, best if organic. Routine technology = mechanistic organizations. Non-routine technology = organic organizations |
| Environmental Uncertainty and Structure | 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. |
| Team structures (Contemporary Org. Designs) | The entire organization is made up of work groups or self-managed teams of empowered employees. epmowerment crtitical b/c no line of managerial authority from top to bottom. free to design work they think is best. all held responsible for all work/performance in their area. advantages: employees more involved and empowered, reduced barriers amounf functional areas.; disadvantages: no clear chain of command, pressure on teams to perform. in large companies compliments functional or divisional structure |
| Matrix and project structures (Contemporary Org. Designs) | Specialists for different functional departments are assigned to work on projects led by project managers. adds vertical to horizontal functional departments. "weaves together" elements of functional and product depertmentlization. creates a dual chain of command, violates classic principle of unity if command. participants have two managers- their functional department manager and their product or project manager. project managers have authority over the functional members who are part of their project teams in area relative to the project goals. promotions,salaries, and reviews remain functional managers respon. advantages:fluid and flexible that can respond to environmental changes. faster decision making. vertical column reports to same boss. horizontal column report to different bosses depending on project |
| Project structures (Contemporary Org. Designs) | Employees work continuously on projects; moving on to another project as each project is completed. no formal departments that workers return to. take skills to other projects. all work performed by teams of employees who become part of project team b/c they have appropriat work skills and abilities. fluid and flexible. no departmentalization or rigid hierachy. managers serve as fcilitators, mentors and coaches. "serve" team by eliminating or minimizing organazational obstacles and by ensuring needed resources |
| Boundaryless Organization (Contemporary Org. Designs) | An flexible and unstructured organizational design that is intended to break down external barriers between the organization and its customers and suppliers. Removes internal (horizontal) boundaries: Eliminates the chain of command. Has limitless spans of control. Uses empowered teams rather than departments; Eliminates external boundaries: Uses virtual, network, and modular organizational structures to get closer to stakeholders. Advantages:highly flexible and responsive, draws on talent wherever found.; Disadvantages: lack of control, communication difficulties |
| Virtual Organization (boundaryless) | An organization that consists of a small core of full-time employees and that temporarily hires specialists to work on opportunities that arise. ex. assessing freelancers around the globe. "film industry free agents" |
| Network Organization (boundaryless) | A small core organization that outsources its major business functions (e.g., manufacturing) in order to concentrate what it does best. |
| Modular Organization (boundaryless) | A manufacturing organization that uses outside suppliers to provide product components for its final assembly operations. can quickly be redesigned as needed. (ex. automobile industry) |
| The Learning Organization | An organization that has developed the capacity to continuously learn, adapt, and change through the practice of knowledge management by employees. |
| project and functional managers (natrix) | to work effectively must communicate regugarlym coordinate work demands on employees, and resolve conflicts together |
| Characteristics of a learning organization | boundaryless, teams, empowerment. An open team-based organization design that empowers employees. Extensive and open information sharing. Leadership that provides a shared vision of the organization’s future, support and encouragement. A strong culture of shared values, trust, openness, and a sense of community. advantages: employees are continously sharing and applying knowledge, ability to learn can create a comparitive advantage.; Disadvantages: getting employees to share what they know can be difficult, collaboration conflicts can arise |
| organizational chart | drawing of an organizations structure |
| leaders in a learning organization | most important function is to facilitate the creation of a shared vision for the future and keep employees working toward it. also support the collaborative environment |
| vision | belongs to everyone, not just the leader. companys' vision is it's shared identity, values and purpose w/ others in the organization |
| reviews | chance to share info in a two way conversation. relationships built with teams members and others outside the organization. provide a way to learn from the past and improve and become open to new ways |
| product, geo, and customer divisional structures | usually only occur in large companies and have their own strategy, culture, and evalutation process. |
| large coproration can become more adaptive | by adopting a learning organization. |
