MHR 300: Organizational Structure
Product Divisions (from Divisional Structure)
Group activities around similar products or services. I.E. Time Warner has different divisions for magazines, movies, recordings, cable television.
Wide Span of Control
A manager has several people reporting. Organization is said to be flat when there are only a few levels with wide spans of control .
Organizational Design
Concerned with designing the optimal structures of accountability and responsibility that an organization uses to execute its strategies.
Unity of Command
An early principle that stresses that an employee should report to no more than one manager in order to avoid conflicting priorities and demands.
Matrix Structure
An organization combines functional and divisional chains of command in a grid so that there are two command structures- vertical and horizontal.
Virtual Organization
An organization whose members are geographically apart, usually working with e-mail, collaborative computing and other computer connections.
What does authority mean?
Authority means accountability, which is different than power. It means that managers must report and justify work results to those above them. HAVE THE RESPONSIBILITY TO PERFORM ASSIGNED TASKS
Modular Structure
Differs from the hollow structure in that it is orientated around outsourcing certain pieces of a product rather than outsourcing certain processes. Firm assembles product chunks, or modules, provided by outside contractors.
Geographic Divisions (from Divisional Structure)
Group activities around defined regional locations. I.E. Federal Reserve Bank has 12 separate districts around the United States.
Centralized Authority
Important decisions are made by higher-level managers. Small companies tend to be the most centralized, but advantages include: less duplication of work because fewer employees perform the same task and procedures are easier to control because it is more uniform.
Decentralized Authority
Important decisions are made by middle-level and supervisory managers. Power is delegated throughout organization. Advantage is that managers are encouraged to solve their own problems and decisions are made more quickly.
What does the organization chart distinguish between authority and responsibility?
It shows two positions: line and staff.
Divisional Structure
People with diverse occupational specialties are put together in formal groups by similar products or services, customers or clients and geographical regions.
How would one describe the seven types of organizational structures?
Seven types of organizational structures are simple, functional, divisional, matrix, team-based, network and modular.
Differentiation
Tendency of the parts of an organization to disperse and fragment. Impulse arises because of technical specialization and division of labor.
Customer Divisions (from Divisional Structure)
Tendency to group activities around common customers or clients. I.E. Ford Motor Company has separate divisions for trucking customers, farm product customers, etc.
Coordinated Effort
The coordination of individual efforts in a group or organizational effort.
What is the form of business?
The form of the business is ever-changing, and business relationships are informal.
Responsibility
The obligation you have to perform the task assigned to you. It is a sign of faulty design when managers are given too much authority and not enough responsibility because they may be abusive or misuse skills.
Delegation
The process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy.
Contingency Design
The process of fitting the organization to its environment is called contingency design.
Integration
The tendency of parts of an organization to draw together to achieve a common purpose. Specialists work together to achieve common chain of command and use cross-functional teams so there is coordination.
Traditional Designs
These tend to favor structures that rely on vertical management hierarchy. This includes Simple Structure, Functional Structure, Divisional Structure and Matrix Structure.
What do organizational charts reveal?
They reveal the vertical hierarchy of authority and the horizontal specialization of authority.
Line Position
This involves line managers, who have the authority to make decisions and usually have people reporting to them. (solid line; i.e. president, vice president, head of accounting, etc.)
Staff Position
This involves staff personnel, who have authority functions and provide advice, recommendations and research to line managers.
Simple Structure
This is found in the early stages of a firm. The organization is apt to reflect desires of owner. It has authority in centralized in a single person, a flat hierarchy, few rules and low work specialization.
Organic Organizations
This is when looseness and flexibility work best. Authority is decentralized and there are fewer rules and procedures. Networks of employees are encouraged to cooperate and respond quickly to unexpected tasks. Also termed as "adhocracies".
Mechanistic Organizations
This is when rigidity and uniformity work best. Authority is centralized, tasks and rules are clearly specified and employees are closely supervised.
Common Purpose
This unifies employees or members and gives everyone an understanding of an organization's reason for being.
Vertical Hierarchy of Authority
Who Reports to Whom; the chain of command.
Horizontal Specialization
Who specializes in what work; the different jobs or work specialization to complete tasks.
Flat Organization
Within the hierarchy of authority aspect, this is defined as one with an organizational structure with few or no levels of middle management between top managers and those reporting to them.
What does a virtual organization appear as to consumers?
It appears to be a single, unified organization with a real physical location.
When is authority most effective?
It is most effective when arranged in a hierarchy.
Functional Structure
People with similar occupational specialities are put together in formal groups. This is very common structure seen in all types of organizations.
Authority
Refers to the rights inherent in a managerial position to make decisions, give orders and utilize resources.
What are the four common elements of organizations?
1) Common Purpose 2) Coordinated Effort 3) Division of Labor 4) Hierarchy of Authority
What are the three types of organizations?
1) For-profit 2) Non-profit 3) Mutual-benefit
How do we categorize organizational design into three types?
1) Traditional Designs 2) Horizontal Designs 3) Designs that Open Boundaries Between Organizations
Organization Chart
A box-and-lines illustration showing the formal lines of authority and the organization's official positions or work specialization.
Boundary-less Organization
A fluid, highly adaptive organization whose members, linked by information technology come together to collaborate on common tasks. The collaborators may not only include suppliers, but customers and even competitors.
Narrow Span of Control
A manager has a limited number of people reporting. Organization is said to be tall when there are many levels with narrow spans of control.
Organization
A system of consciously coordinated activities or forces of two or more people.
The Hollow Structure
Also known as network structure, the organization has a central core of key and outscores other functions vendors who can do them cheaper or faster.
Span of Control
Also known as span of management, this refers to the number of people reporting directly to a given manager.
Horizontal Design
Also known as team-based, teams or workgroups, either temporary used to improve collaboration and work or shared tasks by breaking down internal boundaries.
Hierarchy of Authority
Also known as the chain of command, this is a control mechanism for making sure the right people do the right things at the right time. Some people need to have more authority.
Division of Labor
Also known as work specialization, this is the arrangement of having discrete parts of a task done by different people.
