Ch. 10 Organizational Design

define virtual organization

an organization that consists of a small core of full-time employees and outside specialists temporarily hired as needed to work on projects

define organizing

arranging and structuring work to accomplish an organization's goals

define line authority

authority that entitles a manager to direct the work of an employee

define departmentalization

basis on which jobs are grouped together

what are the disadvantages of overspecialization in division of labour?

can result in human diseconomies from boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnover

define chain of command

continuous line of authority that extends from the top of the organization to the lowest level and clarifies who reports to whom

define centralization

degree to which decision making is concentrated at upper levels of the organization

define formalization

degree to which jobs within the organization are standardized and the extent to which employee behaviour is guided by rules and procedures - highly formalized = little discretion over what is to be done

define decentralization

degree to which lower-level employees provide input or actually make decisions

define work specialization

- degree to which activities in an organization are subdivided into separate job tasks - also known as division of labour

define an organic organization

- highly flexible and adaptable structure - non-standardized jobs - fluid team-based structure - little direct supervision - minimal formal rules - open communication network - empowered employees

define a mechanistic organization

- rigid and tightly controlled structure - high specialization - rigid departmentalization - narrow spans of control - high formalization - limited information network (mostly downward communication) - low decision participation by lower-level organizations

what are the 5 common forms of departmentalization?

1. functional - grouping jobs by functions performed 2. product - grouping jobs by product line 3. geographical - grouping jobs on the basis of territory or geography 4. process departmentalization - grouping jobs on the basis of product or customer flow 5. customer departmentalization - grouping jobs on the basis of common customers

what are structural decisions influenced by?

1. organization's strategy 2. size - change from organic to mechanistic when growing in size 3. technology i.e. unit production, mass production, and process production 4. degree of environmental sensitivity - dynamic environments require organic structures

what affects span of control? (9)

1. skills and abilities of the manager and employees 2. characteristics of the work being done 3. similarity of tasks 4. complexity of tasks 5. physical proximity of subordinates 6. standardization of tasks 7. sophistication of the organization's information 8. strength o the organization's culture 9. preferred style of the manager

what are the contemporary organizational designs?

1. team/project structure 2. matrix-project 3. boundaryless structure 4. virtual/networked structure

what is the acceptance theory of authority? (4)

1. they understand the order 2. they feel the order is consistent with the organization's purpose 3. the order does not conflict with their personal belief 4. they are able to perform the task as directed

what are the 6 key elements in organizational design?

1. work specialization 2. chain of command 3. centralization 4. departmentalization 5. span of control 6. formalization

define employee empowerment

giving employees more authority (power) to make decisions

define organizational structure

how job tasks are formally divided, grouped, and coordinated within an organization

define unity of command

management principle that each person should report to only one manager

define span of control

number of employees who can be effectively and efficiently supervised by a manager

define responsibility

obligation or expectation to perform any assigned duties

define team structure

organization structure which the entire organization is made of work groups or teams

define network organization

organization that uses its own employees to do some work activities and networks of outside suppliers to provide other needed product components or work processes - concentrate on what they do best and contract out other activities to companies that can do those activities best

define boundaryless organization

organization whose design is not defined by, or limited to, the horizontal, vertical, or external boundaries imposed by a predefined structure

define project structure

organizational structure in which employees continuously work on projects - fluid/flexible - no departmentalization or rigid hierarchy

define matrix structure

organizational structure that assigns specialists from different functional departments to work on one or more projects - creates a dual chain of command in which employees have two managers (functional area manager and project manager)

define staff authority

positions with some authority that have been created to support, assist, and advise those holding line authority

define organizational design

process involving decisions about six key elements

define authority

rights inherent in a managerial position to tell people what to do and to expect them to do it

define acceptance theory of authority

view that authority comes from the willingness of subordinates to accept it

define organizational chart

visual representation of an organization structure

define cross functional teams

work teams made up of individuals who are experts in various functional specialties together