Chapter 5

Vertical Differentiation is affected by

1. Horizontal Differentiation 2. Decentralisation 3. Standarization 4. Relationship between organisational members

Beuracracy

A form of organizational structure in which people can be held accountable for their actions because they are required to act in accordance with rules and standard operating procedures.

Amount of coordination

A narrower span of control is advisable in firms where management expends much time coordinating tasks performed by subordinates.

Principle three of bureaucracy

A roles task responsibility and decision making authority and its relationship to other roles in the organisation should be specified

Tall Structure

An organization in which the hierarchy has many levels to the size of the organization.

Minimum Chain of Comand

An organization should choose the minimum number of hierarchical levels consistent with its goals and the environment in which it operates.

Flat Structure

An organization that has few levels in its hierarchy relative to its size.

Horizontal Differentiation

An organization that is divided into subunits has many different hierarchies not just one

Parkinson's Law Problem

Argues that the number of managers and hierarchies are based on tow principles A manager wants to multiply subordinates, not rivals Managers make work for one another

Motivation Problems

As hierarchy increases, the relative difference in the authority possessed managers at each level decreases, as does their area of responsibility.

Degree of employee empowerment:

Because employees who are trusted and empowered to make decisions need less supervision than employees with less autonomy and decision-making discretion, supervisors who empower their employees can have a wider span of control.

Geographical Proximity:

Because employees who work in one location are more easily supervised than employees in dispersed locations, physical proximity to employees tends to allow a wider span of control.

Technology

Communication technology, such as mobile phones, fax, e-mail, workshare software, can allow managers to effectively supervise employees who are not geographically proximate, have complex and different jobs, and require significant coordination.

The organisation can increase the number of managers it uses to monitor, evaluate and reward employees to

Deal with coordination and motivation problems

Division of labour and specialisation make it hard to

Determine how well individuals perform

Cross Functional Workers

Formal groups of employees from across an organizations different functions that are empowered to direct and coordinate the value- creation activities necessary to complete different programs or projects.

Job Similarity

If one manages a group of employees performing similar jobs, the span of control can be considerably wider than if the jobs of subordinates are substantially different.

Principle one of bureaucracy

Is founded on the concept of rational legal authority

When an organization has 1,000 members

It has 4 Hierarchies

When an organization has 3,000 members

It has 7 hierarchies

When an organization has between 10,000 and 100,000 members

It has 9 to 10 hierarchies

Each functional division has

It's own hierarchy

Factors that affect span of control

Job Complexity Job Similarity Geographical Proximity Amount of coordination Abilities of employees Degree of employee empowerment Ability of management Technology

Job Complexity

Jobs that are complicated require more managerial input and involvement and thus the span of control tends to be narrower. Job Similarity: If one manages a group of employees performing similar jobs, the span of control can be considerably wider than if the jobs of subordinates are substantially different.

Increased bureaucratic costs

Managers cost money

Ability of management

More capable managers can manage more employees than less competent managers. The abilities of managers to educate employees and effectively respond to their questions lessen the need for a narrow span of control.

Principle two of bureaucracy

Organisational roles are held on the basis of technical competence

Standardisation

Reduces the need for levels of management because rules substitute for direct supervision

horizontal differentiation is the principal way an organisation

Retains control over employees without increasing the number of hierarchical levels

Principle five of bureaucracy

Rules, standard operating procedures and norms should be used to control the behaviour of relations in the organisation

Abilities of employees

Supervisors who manage employees who are more knowledgeable and capable can have a wider span of control than supervisors managing less knowledgeable and capable employees.

Rational-legal authority

The authority a person possesses because of his or her position in an organisation

Rational- legal authority

The authority a person possesses because of his or her position in an organization.

The span of control depends on

The complexity and interrelatedness of the subordinates tasks

Centralization

The concentration of management and decision-making power at the top of an organization's hierarchy.

Span of control

The number of subordinates a manager directly manages

Principle four of bureaucracy

The organisation of roles in a bureaucracy is such that each office is in control of a higher office

Vertical differentiation begins when

The organization has problems in coordinating and motivating employees

Role conflict

The state of opposition that occurs when two or more people have different views of what another person should do and, as a result, make conflicting demands on the person.

Role ambiguity

The uncertainty that occurs for a person whose tasks or authority are not clearly defined.

Self management teams

Work groups consisting of people who are jointly responsible for ensuring that the team accomplishes its goals and who empowered to lead themselves.

Contingent Workers

Workers who are employed for temporary periods by an organization and who receive no indirect benefits such as health insurance or pensions.

Communication Problems

communication takes longer and is likely to be distorted

To deal with coordination and motivation problems the Organization can...

• Increase the number of managers it uses to monitor, evaluate, and reward employees. • Increase the number of levels in its managerial hierarchy, thereby making the hierarchy of authority taller.