Chapter 6 - Organization Structure and Design

Excessive work specialization or ___, can lead to (6)

Excessive work specialization or *human diseconomies*, can lead to 1. boredom, fatigue 2. stress 3. low productivity 4. poor quality 5. increased absenteeism 6. high turnover.

*I. WHAT ARE THE SIX KEY ELEMENTS IN ORGANIZATIONAL DESIGN?*

F. What is Formalization?

Sometimes the term "line" is used to differentiate line managers from ___.

Sometimes the term "line" is used to differentiate line managers from *staff managers*.

The chain of command is the continuous line of authority that extends from ___ and clarifies ___.

The chain of command is the continuous line of authority that extends from upper organizational levels to the lowest and clarifies who reports to whom.

*Think of the cone in Exhibit 6-5 as an organization.* The closer you are to the power core, the more ___.

The closer you are to the power core, the more *influence you have on decisions*.

How does the contemporary view of authority and responsibility differ from the historical view?

The early management writers assumed that *the rights inherent in one's formal position* in an organization were the *sole source of influence*. This might have been true 30 or 60 years ago. HOWEVER it is now recognized that you *do not* have to be a manager to have power, and that *power is not perfectly correlated with one's level in the organization*. Authority is but one element in the larger concept of power.

*Think of the cone in Exhibit 6-5 as an organization.* The existence of a ___ is the only difference between A and B in Exhibit 6-5.

The existence of a *power core* is the only difference between A and B in Exhibit 6-5.

*Mechanistic Organization* The high degree of work specialization created ___, ___, and ___ jobs.

The high degree of work specialization created *simple, routine*, and *standardized* jobs.

The more training and experience employees have, the less ___.

The more training and experience employees have, the less *direct supervision needed*.

The most appropriate structure to use will depend on ___.

The most appropriate structure to use will depend on *contingency factors*.

The organic form is a ___ form that is a direct contrast to the mechanistic one.

The organic form is a *highly adaptive* form that is a direct contrast to the mechanistic one.

The organic organization is low in ___.

The organic organization is low in *centralization*.

The unity of command concept was logical when organizations were ___.

The unity of command concept was logical when organizations were *comparatively simple*.

Their objective was the ___ and ___ use of employees.

Their objective was the *optimum* and *efficient* use of employees.

There are instances today when strict adherence to the unity of command creates a degree of ___ that ___.

There are instances today when strict adherence to the unity of command creates a degree of *inflexibility* that *hinders an organization's performance*.

There was no consensus on a specific number but early writers favored ___ spans of ___ than ___ to maintain close control.

There was no consensus on a specific number but early writers favored *small spans* of *less than six* to maintain close control.

Organizational design principles still provide valuable insights into designing ___ and ___ organizations.

These principles still provide valuable insights into designing *effective* and *efficient* organizations.

*Mechanistic Organization* The chain-of-command principle ensured the existence of a ___ of ___.

a) The chain-of-command principle ensured the existence of a *formal hierarchy* of *authority*.

Early management writers felt that ___ in an organization depended on the situation.

Early management writers felt that *centralization* in an organization depended on the situation.

Authority and power are frequently confused. How do authority and power differ?

*Authority is a right,* the legitimacy of which is based on the authority figure's position in the organization. Authority goes with the job. *Power refers to an individual's capacity to influence decisions*

___ is part of the larger concept of power.

*Authority* is part of the larger concept of power.

___ organizations are still alive and well and continue to dominate most medium-sized and large organization.

*Bureaucratic* organizations are still alive and well and continue to dominate most medium-sized and large organization.

___ and ___ have identified (5) sources, or bases, of power.

*John French* and *Bertram Raven* have identified five sources, or bases, of power.

What are the (5) common forms of departmentalization?

1) Functional Groups 2) Product Groups 3) Customer Groups 4) Geographic Groups 5) Process Groups

What are the (2) different types of authority relationships?

1. Line authority 2. Staff authority

The cone analogy explicitly acknowledges what (2) facts?

1. The higher one moves in an organization, the closer one moves to the power core. 2. It is not necessary to have authority in order to wield power because one can move horizontally inward toward the power core without moving up.

What are the (5) sources of power?

1. coercive power 2. reward power 3. legitimate power 4. expert power 5. referent power

The mechanistic organization (or bureaucracy) was the natural result of combining what (6) elements of structure?

1. high specialization 2. rigid departmentalization 3. clear chain of command 4. narrow spans of control leading to taller structure 5. centralization 6. high formalization

What (7) other contingency variables should also be considered?

1. similarity of employee tasks 2. the task complexity 3. the physical proximity of employees 4. the degree of standardization 5. the sophistication of the organization's management information system 6. the strength of the organization's value system 7. the preferred managing style of the manager, etc.

The more popular contingency variables are: (4)

1. strategy 2. size 3. technology 4. environment.

A line manager has the right to ___ and ___ without consulting anyone.

A line manager has the right to *direct the work of employees* and *make certain decisions* without consulting anyone.

A manager's function is classified as line or staff based on the ___.

A manager's function is classified as line or staff based on the *organization's objectives*.

*1. WHAT ARE THE SIX KEY ELEMENTS IN ORGANIZATIONAL DESIGN?*

A. Introduction

Allocating authority without ___ creates opportunities for abuse.

Allocating authority without *responsibility* creates opportunities for abuse.

An employee who has to report to two or more bosses might have to cope with ___ ___ or ___ priorities.

An employee who has to report to two or more bosses might have to cope with *conflicting demands* or *priorities*.

An employee who has to report to two or more bosses might have to cope with conflicting demands or priorities. Therefore, the early management writers argued that an employee should have ___ ( ___ )

An employee who has to report to two or more bosses might have to cope with conflicting demands or priorities. Therefore, the early management writers argued that an employee should have *only one superior (Unity of command)*.

As organizations get larger and more complex, line managers find that they do not have the ___, ___, or ___ to get their jobs done effectively, so they create staff authority functions to ___, ___, ___, and generally reduce some of their ___ burdens.

As organizations get larger and more complex, line managers find that they do not have the *time, expertise*, or *resources* to get their jobs done effectively, so they create staff authority functions to *support, assist, advise,* and generally *reduce* some of their *informational burdens*

Authority refers to the ___ inherent in a managerial position, to ___ and expect the to ___. Authority is related to one's ___ and ignores ___.

Authority refers to the *rights* inherent in a managerial position, to *give orders* and *expect them to be obeyed*. Authority is related to one's *position* and ignores *personal characteristics*.

*II. WHAT CONTINGENCY VARIABLES AFFECT STRUCTURAL CHOICE?*

B. How Is a Mechanistic Organization Different from an Organic Organization?

*II. WHAT CONTINGENCY VARIABLES AFFECT STRUCTURAL CHOICE?*

C. How Does Strategy Affect Structure?

*I. WHAT ARE THE SIX KEY ELEMENTS IN ORGANIZATIONAL DESIGN?*

C. What Is Departmentalization?

Centralization is a function of how much ___

Centralization is a function of how much *decision-making authority is pushed down to lower levels in the organization*.

Centralization-decentralization is a ___, which means that no organization is completely ___ or ___

Centralization-decentralization is a *degree phenomenon*, which means that no organization is completely *centralized* or *decentralized*

*I. WHAT ARE THE SIX KEY ELEMENTS IN ORGANIZATIONAL DESIGN?*

D. What are Authority and Responsibility?

*Mechanistic Organization* Departmentalization increased ___ and the need for ___ of management.

Departmentalization increased *impersonality* and the need for *multiple layers* of management.

Early management writers expected organizations to be fairly ___, as this went hand-in-hand with ___-style organizations.

Early management writers expected organizations to be fairly *formalized*, as formalization went hand-in-hand with *bureaucratic-style organizations*.

Formalization refers to how ___ an organization's ___ are and the extent to which ___ is guided by rules and procedures.

Formalization refers to how *standardized* an organization's *jobs* are and the extent to which *employee behavior* is guided by rules and procedures.

This question received a great deal of attention from early management writers

How many employees can a manager efficiently and effectively direct?

If the chain of command had to be violated, early management writers always explicitly designated that there be a ___ and a ___.

If the chain of command had to be violated, early management writers always explicitly designated that there be a *clear separation of activities* and a *supervisor responsible for each*.

Line authority is the ___-___ authority relationship that extends from ___-___

It is the *employer-employee authority relationship* that extends from top to bottom.

*Mechanistic Organization* Keeping the span of control small created ___, ___ structures, and top management increasingly ___.

Keeping the span of control small created *tall, impersonal* structures, and top management increasingly *imposed rules and regulations*.

Level in the organization is a ___. Top managers need a ___ span than do middle managers, and middle managers require a ___ span than do supervisors

Level in the organization is a *contingency variable*. Top managers need a *smaller* span than do middle managers, and middle managers require a *smaller* span than do supervisors

Line emphasizes managers whose organizational function contributes directly to the ___

Line emphasizes managers whose organizational function contributes directly to the *achievement of organizational objectives* (e.g., production and sales).

Low-ranking employees with ___ as well as employees with ___ and ___ might be close to the power core.

Low-ranking employees with *contacts in high places* as well as employees with *scarce* and *important skills* might be close to the power core.

Many organizations are ___ their spans of control

Many organizations are *increasing* their spans of control

One of the central themes of empowering employees was to ___. That's the issue of ___ at work. It doesn't imply that senior management no longer ___.

One of the central themes of empowering employees was to *delegate to them the authority to make decisions on those things that affect their work*. That's the issue of *decentralization* at work. It doesn't imply that senior management no longer *makes decisions*.

Organic organizations have a highly ___ and ___ structure This structure allows for ___

Organic organizations have a highly *adaptive* and *flexible* structure this *loose* structure allows for *rapid adjustment to change*

Organic organizations have employees who tend to be professionals who are ___ and trained to handle ___. They need very few ___ and little ___.

Organic organizations have employees who tend to be professionals who are *technically proficient* and trained to handle *diverse problems*. They need very few *formal rules* and little *direct supervision*.

Organization design applies to ___ organizations.

Organization design applies to *any type* of organization.

Organization design decisions are typically made by ___.

Organization design decisions are typically made by *senior managers*.

Organizational design was formulated by ___ and ___ in the early 1900s.

Organizational design was formulated by *Henri Fayol* and *Max Weber* in the early 1900s.

Organizations today are more ___ and are responding to ___ changes. Many managers believe that decisions need to be made by ___

Organizations today are more *complex* and are responding to *dynamic changes*. Many managers believe that decisions need to be made by *those closest to the problem*.

Power is a ___ concept that includes not only the ___ and ___ dimensions but also ___.

Power is a *3 dimensional* concept that includes not only the *functional* and *hierarchical* dimensions but also *centrality*.

Today's view is that specialization is an important organizing mechanism for employee efficiency, but it is important to recognize the ___ work specialization can provide as well as ___.

Today's view is that specialization is an important organizing mechanism for employee efficiency, but it is important to recognize the *economies* work specialization can provide as well as *its limitations*.

Today, managers often choose the amount of centralization or decentralization that will allow them to best ___ and ___.

Today, managers often choose the amount of centralization or decentralization that will allow them to best *implement their decisions* and *achieve organizational goals*.

Today, organizations rely less on ___ and ___ to guide and regulate employee behavior.

Today, organizations rely less on *strict rules* and *standardization* to guide and regulate employee behavior.

Traditional organizations were structured in a ___, with ___ and ___ concentrated near the top of the organization. Given this structure, historically, ___ decisions were the most prominant

Traditional organizations were structured in a *pyramid*, with *power* and *authority* concentrated near the top of the organization. Given this structure, historically, *centralized* decisions were the most prominent.

When each of these two models is appropriate depends on several ___ variables.

When each of these two models is appropriate depends on several *contingency* variables.

When employees are given rights, they assume a corresponding ___ and should be ___. No one should be held responsible for something ___.

When employees are given rights, they assume a corresponding *obligation to perform* and should be *held accountable for that performance*. No one should be held responsible for something *over which he or she has no authority*.

When managers delegate authority, they must allocate ___.

When managers delegate authority, they must allocate *commensurate responsibility*.

While authority is defined by one's ___, power is made up of both ___ and one's ___

While authority is defined by one's *vertical position* in the hierarchy, power is made up of both one's *vertical position* and one's *distance from the organization's power core*, or center.

With today's focus on the customer, many companies are using ___

With today's focus on the customer, many companies are using *cross-functional teams*.

Work specialization makes efficient use of ___

Work specialization makes efficient use of *the diversity of skills that workers hold*.