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Management Chapter5


Organizational Structure The formal arrangement of jobs within an organization.
Organizational Design A process involving decisions about six key elements: Work specialization Departmentalization Chain of command Span of control Centralization and decentralization Formalization
Some Purposes of Organizing Divides work to be done into specific jobs and departments. Assigns tasks and responsibilities associated with individual jobs. Coordinates diverse organizational tasks. Clusters jobs into units. Establishes relationships among individuals, groups, an
Work Specialization The degree to which tasks in the organization are divided into separate jobs with each step completed by a different person. Overspecialization can result in human diseconomies from boredom, fatigue, stress, poor quality, increased absenteeism, and highe
Departmentalization by Type Functional Grouping jobs by functions performed Product Grouping jobs by product line Geographic Grouping jobs on the basis of territory or geography Process Grouping jobs on the basis of product or customer flow Customer Grouping jobs by type
Functional Departmentalization Advantages Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations Coordination within functional area In-depth specialization Disadvantages Poor communication across functional areas Limited
Geographical Departmentalization Advantages More effective and efficient handling of specific regional issues that arise Serve needs of unique geographic markets better Disadvantages Duplication of functions Can feel isolated from other organizational areas
Product Departmentalization +Allows specialization in particular products and services +Managers can become experts in their industry +Closer to customers –Duplication of functions –Limited view of organizational goals
Process Departmentalization + More efficient flow of work activities –Can only be used with certain types of products
Customer Departmentalization + Customers’ needs and problems can be met by specialists - Duplication of functions - Limited view of organizational goals
Chain of Command The continuous line of authority that extends from upper levels of an organization to the lowest levels of the organization and clarifies who reports to who.
Authority The rights inherent in a managerial position to tell people what to do and to expect them to do it.
Responsibility The obligation or expectation to perform.
Unity of Command The concept that a person should have one boss and should report only to that person.
Span of Control The number of employees who can be effectively and efficiently supervised by a manager. Width of span is affected by: Skills and abilities of the manager Employee characteristics Characteristics of the work being done Similarity of tasks Complexity
Centralization The degree to which decision-making is concentrated at a single point in the organizations. Organizations in which top managers make all the decisions and lower-level employees simply carry out those orders.
Decentralization Organizations in which decision-making is pushed down to the managers who are closest to the action.
Employee Empowerment Increasing the decision-making,
More Centralization Environment is stable. Lower-level managers are not as capable or experienced at making decisions as upper-level managers. Lower-level managers do not want to have a say in decisions. Decisions are significant. Organization is facing a crisis or the r
More Decentralization Environment is complex, uncertain. Lower-level managers are capable and experienced at making decisions. Lower-level managers want a voice in decisions. Decisions are relatively minor. Corporate culture is open to allowing managers to have a say in wh
Traditional Designs Simple structure Low departmentalization, wide spans of control, centralized authority, little formalization Functional structure Departmentalization by function Operations, finance, human resources, and product research and development Divisional st
Contemporary Organizational Designs Team structures The entire organization is made up of work groups or self-managed teams of empowered employees. Matrix and project structures Specialists for different functional departments are assigned to work on projects led by project managers. Ma
Contemporary Organizational Designs Boundaryless Organization An flexible and unstructured organizational design that is intended to break down external barriers between the organization and its customers and suppliers. Removes internal (horizontal) boundaries: Eliminates the chain of co
Removing Boundaries Virtual Organization An organization that consists of a small core of full-time employees and that temporarily hires specialists to work on opportunities that arise. Network Organization A small core organization that outsources its major business func
The Learning Organization An organization that has developed the capacity to continuously learn, adapt, and change through the practice of knowledge management by employees. Characteristics of a learning organization: An open team-based organization design that empowers employee
Created by: Strango
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