Business Management Organizational Design Test
Division of Labor
Separating a big job into several smaller tasks, also known as job specialization
Unity of command
States that no employee should have to report to more than one manager or supervisor
Principles of organizational design
The importance of company objectives, the concept of authority, division of labor, unity of command, the scalar principle, and span of control
The divisional organizational structure
The organization is broken down into units; however, these units are different from the types you would find in a functional structure
Organizational Design
The process of structuring a business's people, information, and technology to enable the business to achieve its goals and to be successful
The importance of company objectives
There are many different ways to structure a business. What works for one company may not work for another. That's why it's important for a business to know its mission and objectives before choosing an organizational design
Advantages of a functional organizational structure
Employees become more skilled in their areas of expertise and it reduces the duplication of certain activities
Clear lines of authority
Every employee has at least one authority that he/she must answer to, it's important for everyone in an organization to know who his or her supervisor is, a strong organizational design makes it plain.
Lateral relations
Refers to the amount of teamwork included in any type of organizational design
The concept of authority
Authority is the formally-granted influence of a position to make decisions, pursue goals, and obtain the resources necessary to support those decisions and goals. Proper authority is given to those who have it
4 ways a divisional structure could be set up
By product, process, territory and customer type
Five benefits of implementing a well-planned organizational design
Clear lines of authority, improved communication, encouraged innovation, increased productivity, and better ability to compete
The matrix organizational structure
Combines the functional structure and the divisional structure
Disadvantages of a divisional structure
Competition can come up between divisions and some efforts may be duplicated
The scalar principle
Creating authority that flows in a clear, continuous line
The functional organizational structure
Each unit or department within the organization has its own set of responsibilities and activities.
Improved communication
Good organizational design has helped communication to flow smoothly within the business
Better ability to compete
Increased innovation and productivity make a business more competitive, an innovative organization comes up with new products and ideas before competitors do
Disadvantages of the matrix structure
It can be costly and decision making can be slow
Disadvantages of a functional organizational structure
It can create narrow perspectives among managers and employees and the functional structure suffers from an overall lack of flexibility
Advantages of the matrix structure
It encourages flexibility, teamwork, and communication by breaking down barriers between traditional departments and it provides employees with increased opportunities for personal and professional development.
Span of control
Refers to how many workers are managed by one supervisor
Advantages of a divisional structure
Its more flexible and it encourages creativity
Importance of lateral relations
No matter what structure an organization's leaders choose to implement, they should strive to include as much teamwork and cooperation between employees as possible
Encouraged innovation
When a business's employees enjoy an excellent flow of communication, they are more likely to share ideas and help each other solve problems
Increased productivity
When employees know what their jobs are, who they report to, have good communication, and work in an innovative environment, it's natural that they will be productive.