MGT 302 Ch 8
Disadvantages of delegation
-Manager doesn't want to give up control or doesn't want to take responsibility for anything not done personally -Subordinates (especially new to the firm) may fear making a mistake and suffering the resultant criticism
What activities are involved in organizing?
-Grouping tasks into jobs -Grouping jobs into departments -Determining authority and channels of communication
Advantages of decentralization
-Information and decisions are processed more quickly because there are fewer levels of employees involved. -More individuals receive training in how to make and implement managerial-type decisions.
organization
A group of individuals working together to achieve goals or objectives that would be difficult or impossible for them to achieve individually.
matrix structure
A matrix structure brings together employees from different functional areas to act as a team in order to complete a specific project. This avoids duplication of effort and has the efficiencies of the functional structure, but it means that each employee has two supervisors.
customer division structure
A multidivisional structure that occurs when a firm organizes divisions by customer.
organizational chart
A pictorial display of the official lines of authority and communication within the organization. Vertical lines between positions indicate lines of authority; horizontal lines represent lines of communication. Positions at higher levels of the chart have authority over positions lower in the chart.
complexity
Describes the level of differentiation among structural units, including the specialization of jobs, geographical dispersion, height of the firm, vertical levels in the organization, and diversity of tasks the organization is involved in. If the firm has many vertical levels and a high degree of division of labor, and is a multinational corporation, then it is a complex organization.
geographic division structure
A multidivisional structure that occurs when a firm creates divisions to support business operations in certain geographic regions.
vertical/scalar organization
Determining authority relationships is sometimes known as vertical, or scalar, organization because these authority relationships flow down an organizational chart, from high positions, such as president and vice president, down to the lower levels of the organization.
broad vs narrow span of control
A broad span of control means that a manager supervises several subordinates; a narrow span of control means that she or he supervises only a few.
hybrid structure
A combination of several different structures and is the most common form of organizational structure.
What must accompany responsibility?
Authority
behavioral approach to job design
Based on the view that workers are independent parts of the production process whose individual characteristics should be taken into account in forming jobs. Primary concern are individuals' needs to be engaged in work that is complex, challenging, and less repetitive. Decrease employee dissatisfaction and increase employee motivation.
organizational culture
Consists of the shared values, beliefs, norms, rules, behaviors, and philosophies in an organization. Every organization has an organizational culture, whether or not managers actively choose to influence it.
centralization
Describes an organization in which the entire decision-making process is completed in the higher echelons of the organization.
job enlargement
Focuses on increasing the number of tasks that comprise a job.
What are some behavioral approaches to job design?
Job enlargement, job rotation, and job enrichment
flat organization
Organizations with few layers of management are known as flat organizations and have wide spans of management.
What else is authority affected by?
Span of control―the actual number of subordinates over which a position has authority.
span of control
The actual number of subordinates over which a position has authority.
vertical coordination
The integration of succeeding levels of the organization.
latent structure
The latent structure describes what the organization is really like: its degree of complexity, formalization, and centralization.
horizontal coordination
The linking of subunits on the same level.
decentralization
The pattern of distributing authority beyond the top positions to various levels throughout the organization.
scalar chain
The principle of organizing whereby authority should flow through the organization from the top down, one level at a time.
unity of command
The principle that a subordinate should report to only one immediate superior.
organizing
The process of creating an organization.
What is one major purpose of establishing authority relationships?
To make it easier for the organization to achieve its goals.
How are authority relationships usually established?
Usually, these authority relationships flow down an organizational chart, from high positions down to the lower levels of the organization.
What is are some weaknesses of the functional structure?
Weaknesses of the functional structure include "turf wars," miscommunication, and working at cross-purposes.
product division structure
A type of multidivisional structure, in which a company uses its different products as the basis for divisions.
specialization
The division of work into smaller, distinct tasks.
departmentalization
Grouping related jobs to form an administrative unit— department, area, or center.
committees
More permanent groups that work on longer-range issues.
delegation
The assignment of work activities and authority to a subordinate.
How does decentralization strengthen employee development?
-Frees managers from some tasks -Provides an opportunity for employees to develop new skills and master additional tasks such as managerial-type decisions -Speeds information processing and decision making because there are fewer levels of employees involved
Advantages of delegation
-Less activities managers has to do -Employee gains experience/skills -Organization benefits because the work process may be completed more efficiently and another employee gains skills in higher-level work assignments
What are the benefits of division of labor and specialization (and the classical approach)?
-These two concepts are closely related, and both are essential for making large quantities of goods efficiently. -Large labor pool, which reduces the wages that must be paid to workers for that job. -Workers assigned to only one small part of the work process can become very knowledgeable about that part very quickly. -Specialized tools and equipment can be developed. -The result is that more product can be made more quickly and for less cost.
What are the disadvantages of specialization (and the classical approach)?
-Performing the exact same task over and over becomes boring, which can affect quality. -Workers combat monotony by being absent and tardy. -Repetitive movements result in fatigue injuries. -Specialization allows managers to replace workers fairly quickly and relatively inexpensively, which often makes workers feel insecure.
Advantages of multidivisional structure
-Permits delegation of decision-making authority, relieving top management of the overwhelming burden of having to know everything about everything, and also permits those closest to the action to make the decisions that will affect them -Tends to promote loyalty and commitment among those lower-level members of the organization who are making important organizational decisions -Decisions are made faster and are more likely to be good decisions, and the work tends to be more innovative and creative -Likely to provide goods or services that are more closely aligned with the needs of its particular geographic area or customer
Disadvantages of matrix structure
-The biggest problem is that, because each team member reports to two bosses—the functional boss and the project boss—it creates ambiguity and confusion and can lead to conflicting demands being placed on team members -If not managed carefully, matrix structures can create more chaos than order
Disadvantages of multidivisional structure
-Top managers may feel they are losing power -Fear of losing power may cause top management to centralize decision making that, in effect, eliminates some of the benefits of the multidivisional structure -Inevitably creates work duplication, which makes it more difficult to realize the economies of scale that result from grouping all functions together
How does an organization determine what structure will work best?
-What structure is best for an organization depends on its size, life cycle, strategy, environment, and technology. -The larger the organization, the more complex the structure tends to become. -Different types of strategy are more effectively implemented with different structures. -Different structures also respond in different ways to varying levels of environmental munificence/scarcity and turbulence/stability. -The more scarce and/or turbulent the organization's environment, the more organic the organization structure should become. -There are three basic levels of technology in production, each of which influences an organization's structure: Small-batch technology, mass technology, and continuous technology
stable environment
An environment in which stakeholder demands, and specifically customer desires, are well understood and relatively stable over time.
munificent environment
An environment in which the organization has a large market for its product and has funds needed to continue operations readily available, and other stakeholder groups are satisfied or pleased with the organization's performance. Easier to break into the market.
turbulent environment
An environment wherein customer or other stakeholder demands are continuously changing or the primary technology of the firm is constantly being improved and updated.
scarce environment
An environment wherein money is tight, the market is stagnant or declining, or stakeholder groups are making conflicting or difficult demands. Harder to break into the market.
holding company
An organization composed of several very different kinds of businesses, each of which is permitted to operate largely autonomously.
How can an organization ensure it is likely to be more effective?
An organization is likely to be more effective when its formal and latent structures are in harmony.
functional structure
An organization with departments like accounting, marketing, and engineering has a functional structure. The grouping of jobs according to similar economic activities, such as finance and operations. The functional structure is efficient and useful for capturing economies of scale, but it can make communication across departments difficult and costly.
tall organization
An organization with many layers of management is known as tall, and the span of management within this organizational structure is narrow.
chain of command
An organizing concept that ensures that all positions are directly linked in some way to top management.
What ensures that all positions are directly linked in some way to top management?
Chain of command, including unity of command and scalar chain.
job enrichment
Focuses on increasing the number of similar tasks involved, especially tasks that require information processing and decision making. Those who have a high need for decision-making, complexity, and responsibility respond more favorably to job enrichment programs.
mechanistic organization
Highly formal, highly complex, and highly centralized. Tend to make decisions slowly and are easily bogged down in rules and procedures, but some employees prefer such environments because the rules are well known and well understood.
multidivisional structure
In a multidivisional structure, the organization groups all the activities involved with a specific product, geographic region, customer, or some other common denominator together into a division. This structure usually occurs when a firm grows so large that functional departments become cumbersome.
virtual organization
In a virtual organization, organizational members in different geographic areas use information technology to collaborate on projects and objectives.
What are informal expressions of the organizational culture?
Include dress codes, extracurricular activities, and stories or legends.
job rotation
Involves a deliberate plan to move workers to various jobs on a consistent, scheduled basis.
Why is the organizational culture important?
It impacts company activities, the workplace environment, and stakeholder relationships. It also provides the firm with an identity and guides it on its path toward its goals.
What firms use an adhocracy?
It is a centralized, informal, but complex organization that tries to maintain flexibility in the face of rapid environmental changes by using a matrix or network formal structure.
How can tasks be grouped into jobs?
Job design is the process of grouping tasks into jobs. Tasks can be grouped into jobs by using either the classical approach to job design or the behavioral approach to job design.
What are the types of latent structures?
Latent structures can be classified along a continuum. At one end of the continuum are mechanistic organizations and at the other end are organic organizations. Most organizations fall in between these two extremes.
organic organization
Less formal, fairly simple, and decentralized. Ambiguous, make decisions quickly, experience rapid change, and some will find them uncomfortable places to work because the rules are not clearly known or understood.
outsourcing
Means that the organization makes critical components, but contracts to others less important manufacturing or other internal tasks. A drawback of outsourcing is that it gives outsiders access to potentially valuable strategic information about the firm.
network organizations
Network organizations do not make products themselves, but contract to others the tasks of producing, transporting, and selling the product according to their designs and plans.
What firms use a simple structure?
New, small firms use simple structures with too few employees to require a more complex organization. It is a structure with few departments, arranged by function, headed by an entrepreneur/owner, and with few technical support staff.
liaison personnel
People whose skill is in communicating across various functional and hierarchical levels.
responsibility
Refers to the accountability an individual or group is given for the attainment of goals.
informal organization
Refers to the relationships among positions that are not connected by the organizational chart. These relationships occur either because the nature of the work forces the people occupying those positions to interact to complete the work more efficiently or because they have developed a friendship.
division of labor
Results from assigning these distinct tasks (those occurring from specialization) to different workers.
team structure
Team structures occur when groups of employees are used to determine ways to allocate tasks and assign responsibilities.
task forces
Temporary groups of employees brought together to try to solve a specific problem or dilemma.
classical approach to job design
The classical approach stresses making a job very simple by including a small number of job tasks. Based on the principles of division of labor and specialization. When jobs are divided, they are reduced in complexity and operations until the activities of a single worker can be repeated with ease.
differentiation strategy
The company may decide always to be the first on the market with the newest and the best product. Requires a more flexible structure and greater coordination among organizational members. This is achieved with more complex structures such as the multidivisional or even matrix structures.
cost-leadership strategy
The company may decide that it will produce the same product more efficiently and thus more cost-effectively than its competitors. Generally find a functional structure most supportive of their goals.
What are formal expressions of the organizational culture?
The company vision and mission statement, codes of ethics, ceremonies, meetings, and more.
formalization
The degree to which the organization's procedures, rules, and personnel requirements are written down and enforced.
What firms use a divisionalized form?
The divisionalized form is used by very large, very complex organizations that need to separate their businesses into divisions. It is a multidivisional structure or hybrid; typically, a very large corporation that has organized its departments into divisions.
coordination
The linking of jobs, departments, and divisions so that all parts of the organization work together to achieve goals.
What firms use a machine bureaucracy?
The machine bureaucracy is the classic bureaucratic structure, used by medium-sized organizations in stable environments using mass-production technology. It is a highly structured, formal organization that emphasizes procedures and rules.
organization life cycle
The organization life cycle usually has five stages: birth, growth, maturity, revival, and decline. Each stage has characteristic features that have implications for the structure of the firm.
What kind of structure does an organizational chart depict?
The organizational chart shows the structure of the formal organization, which is the arrangement of the positions that dictates which work activities are completed, where decisions should be made, and the flow of information, but does not designate the informal relationships.
What firms use a professional bureaucracy?
The professional bureaucracy applies to organizations whose workforce is made up of professionals. It is an organization that has a functional structure, is medium sized, and works best in stable environments, but has primarily professional employees and a decentralized informal structure.
organizational structure
The result of the process of creating an organization—the ways managers group jobs into departments and departments into divisions.
authority
The right to give work order to others in the organization.
What are authority relationships partly defined by?
The type of departmentalization the organization uses: -Product departmentalization -Functional departmentalization
Despite delegation, what are managers still responsible for?
Though the manager delegates work activities and the authority to complete them to a subordinate, the manager still is responsible for the subordinate's performance and the work activities themselves.
coordinating mechanisms
Tools that can be used to help reduce the disadvantages of any given organizational structure design choice. Include: The organizational hierarchy, rules and procedures, committees, task forces, and liaison personnel