Chapter 6 Organizational Structure and Design

Integration

Extent to which parts of the organization interact and cooperate

Differentiation

Extent to which tasks are divided into subtasks and preformed by individuals with special skills

Characteristics of Product Structure

Firm org around specific product. Each group has all traditional departments. CEO>Vice Pres Product A> Marketing, Operations, Sales.

Peter Principle

Selection of candidate based on performance in their current role rather than the abilities relevant for intended role

Characteristics of Division Structure

Similar to Product Structure. Specific products may not be closely related. Each unit contains an array of product groups and specific products

Characteristics of Geographic Structure

Structure based on regions where the operations are. Regional executives are responsible for all functional activities and products in their region.

Unity of Command Principle

Suggests that a person should only have 1 boss. Used by more formal org.

Define Organizational Structure

Sum of ways an organization divides it's labor into tasks, then coordinates them. Blueprint for reporting relationships, controls, authority, decision making

Formalization

The defined structures+systems relating to decision making, communication, & control in the org. These mechanisms define how people/activities are independent/integrated.

Span of Control Principle

# of subordinates a supervisor has

Equity Principle

All employees must be treated kindly. Managers need to be fair.

Characteristics of Mixed Structure

Any combination of of organizational structures. Gains advantages, loses disadvantages.

Characteristics of Matrix Structure

Combination of two organizational structures together. 1 person reports to 2 bosses

Centralization

Decision making made at the few individuals at the top of the organization

Principles of Organization Structure

Differentiation vs Integration. Formalization vs Informalization. Centralization vs decentralization.

Chain of Command ( Scalar Principle )

Hierarchy of reporting relationships, who answers to whom. Scalar Principle states there should be clearly defined line of authority linking all managers at all levels

Tall organization Structure

Narrow spans of control throughout entire organization, multiple layers

Common Types of Organizational Structure

Product, Division, Geographic, Matrix, Mixed

Decentralization

Pushes decision making down to lowest possible level

Informalization

Unofficial/influential means of communication, decision making, control. Ex:Guanxi, In China the trust between two people over time results in actions to benefit one another

Flat Organizational Structure

Wide span of control throughout the organization. Fewer layers in the hierarchy.