Chapter 16 Organizational Structure and Design

Organizational Design

A specific organizational structure that results from managers decisions and actions

Virtual Organization

A collection of geographically distributed, functionally and/or culturally diverse aggregations of individuals that are linked by electronic forms of communications

Centralization

A dimension of organizational structure that refers to the extent to which authority to make decisions is retained in top management

Formalization

A dimension of organizational structure that refers to the extent to which rules, procedures, and other guides to action are written and enforced

Complexity

A dimension of organizational structure that refers to the number of different jobs and/or units within an organization

Boundaryless Organization

A firm in which chains of command are eliminated, spans of control are unlimited, and rigid departments are replaced with empowered teams

Matrix Model of Organizational Design

An organizational design that superimposes a product- or project- based design on an existing function-based design

Self-Managed Team

Groups of employees that complete an entire piece of work while having considerable autonomy over the way in with they accomplish their work

Scalar Chain

The graduated chain of authority created through the delegation process

Departmentalization

The manner in which an organization is structurally divided. Some of the more publicized divisions are by function, territory, product, customer and project

Vertical Differentiation

The number of authority levels in an organization. The more authority levels an organization has, the more complex is the organization

Horizontal Differentiation

The number of different units existing at the same level in an organization. The greater the horizontal differentiation, the more complex is the organization

Span of Control

The number of subordinates reporting to a superior. The span is a doctor that affects the shape and height of an organizational structure

Organic Model of Organizational Design

The organizational design that emphasizes the importance of adaptability and development. It is relatively informal, decentralized, and simple

Delegation of Authority

The process by which authority is distributed downward in an organization

Division of Labor

The process of dividing work into relatively specialized jobs to achieve advantages of specialization

Mechanistic Model of Organizational Design

The type of organizational design that emphasizes the importance of production and efficiency. It is highly formalized, centralized, and complex