Chapter 5
Vertical Differentiation is affected by
1. Horizontal Differentiation 2. Decentralisation 3. Standarization 4. Relationship between organisational members
Beuracracy
A form of organizational structure in which people can be held accountable for their actions because they are required to act in accordance with rules and standard operating procedures.
Amount of coordination
A narrower span of control is advisable in firms where management expends much time coordinating tasks performed by subordinates.
Principle three of bureaucracy
A roles task responsibility and decision making authority and its relationship to other roles in the organisation should be specified
Tall Structure
An organization in which the hierarchy has many levels to the size of the organization.
Minimum Chain of Comand
An organization should choose the minimum number of hierarchical levels consistent with its goals and the environment in which it operates.
Flat Structure
An organization that has few levels in its hierarchy relative to its size.
Horizontal Differentiation
An organization that is divided into subunits has many different hierarchies not just one
Parkinson's Law Problem
Argues that the number of managers and hierarchies are based on tow principles A manager wants to multiply subordinates, not rivals Managers make work for one another
Motivation Problems
As hierarchy increases, the relative difference in the authority possessed managers at each level decreases, as does their area of responsibility.
Degree of employee empowerment:
Because employees who are trusted and empowered to make decisions need less supervision than employees with less autonomy and decision-making discretion, supervisors who empower their employees can have a wider span of control.
Geographical Proximity:
Because employees who work in one location are more easily supervised than employees in dispersed locations, physical proximity to employees tends to allow a wider span of control.
Technology
Communication technology, such as mobile phones, fax, e-mail, workshare software, can allow managers to effectively supervise employees who are not geographically proximate, have complex and different jobs, and require significant coordination.
The organisation can increase the number of managers it uses to monitor, evaluate and reward employees to
Deal with coordination and motivation problems
Division of labour and specialisation make it hard to
Determine how well individuals perform
Cross Functional Workers
Formal groups of employees from across an organizations different functions that are empowered to direct and coordinate the value- creation activities necessary to complete different programs or projects.
Job Similarity
If one manages a group of employees performing similar jobs, the span of control can be considerably wider than if the jobs of subordinates are substantially different.
Principle one of bureaucracy
Is founded on the concept of rational legal authority
When an organization has 1,000 members
It has 4 Hierarchies
When an organization has 3,000 members
It has 7 hierarchies
When an organization has between 10,000 and 100,000 members
It has 9 to 10 hierarchies
Each functional division has
It's own hierarchy
Factors that affect span of control
Job Complexity Job Similarity Geographical Proximity Amount of coordination Abilities of employees Degree of employee empowerment Ability of management Technology
Job Complexity
Jobs that are complicated require more managerial input and involvement and thus the span of control tends to be narrower. Job Similarity: If one manages a group of employees performing similar jobs, the span of control can be considerably wider than if the jobs of subordinates are substantially different.
Increased bureaucratic costs
Managers cost money
Ability of management
More capable managers can manage more employees than less competent managers. The abilities of managers to educate employees and effectively respond to their questions lessen the need for a narrow span of control.
Principle two of bureaucracy
Organisational roles are held on the basis of technical competence
Standardisation
Reduces the need for levels of management because rules substitute for direct supervision
horizontal differentiation is the principal way an organisation
Retains control over employees without increasing the number of hierarchical levels
Principle five of bureaucracy
Rules, standard operating procedures and norms should be used to control the behaviour of relations in the organisation
Abilities of employees
Supervisors who manage employees who are more knowledgeable and capable can have a wider span of control than supervisors managing less knowledgeable and capable employees.
Rational-legal authority
The authority a person possesses because of his or her position in an organisation
Rational- legal authority
The authority a person possesses because of his or her position in an organization.
The span of control depends on
The complexity and interrelatedness of the subordinates tasks
Centralization
The concentration of management and decision-making power at the top of an organization's hierarchy.
Span of control
The number of subordinates a manager directly manages
Principle four of bureaucracy
The organisation of roles in a bureaucracy is such that each office is in control of a higher office
Vertical differentiation begins when
The organization has problems in coordinating and motivating employees
Role conflict
The state of opposition that occurs when two or more people have different views of what another person should do and, as a result, make conflicting demands on the person.
Role ambiguity
The uncertainty that occurs for a person whose tasks or authority are not clearly defined.
Self management teams
Work groups consisting of people who are jointly responsible for ensuring that the team accomplishes its goals and who empowered to lead themselves.
Contingent Workers
Workers who are employed for temporary periods by an organization and who receive no indirect benefits such as health insurance or pensions.
Communication Problems
communication takes longer and is likely to be distorted
To deal with coordination and motivation problems the Organization can...
• Increase the number of managers it uses to monitor, evaluate, and reward employees. • Increase the number of levels in its managerial hierarchy, thereby making the hierarchy of authority taller.