MGMT 2/28

Chapter 9 Designing Adaptive Organizations

Organizing

  • the deployment of resources to achieve strategic goals
  • it is reflection in: division labor into specific departments & jobs, and formal lines of authority
  • Mechanisms for coordinating diverse…

Organization Structure

  • the vertical and horizontal configuration of departments, authority, and jobs within a company
  • Organizational chart shows the formal tasks and the formal reporting relations as well as framework for vertical control

Work Specialization

  • aka division of labor promotes efficiency
  • organizational tasks are subdivided into individual jobs
  • employees perform only the tasks relevant to their specialized function
  • Jobs tend to be small, but they can be performed efficiently

Chain of Command

  • Unbroken line of authority that links all persons in an organization
  • Shows who reports to whom
  • Associated with two underlying principles: 1) unit of command (each employee reports to one supervisor), and 2) Scalar Principle (the chain of authority that includes everyone in the organization)

Span of Management (aka Span of Control)

  • the number of employees who report to a supervisor
  • traditional view = 7 subordinates per manager
  • Lean organizations today = 30+ subordinates
  • Supervisor Involvement:
  • must be closely involved with subordinates, the span should be small
  • need little involvement with subordinates, it can be large
  • the relationship between Span of Management and supervisor involvement is negative

Tall vs. Flat Structure

  • Span of control used in an organization determines whether the structure is tall or flat
  • Tall structure: narrow span and more hierarchical levels
  • Flat structure: wide span, is horizontally dispersed, and has fewer hierarchical levels

Centralization vs. Decentralization

  • Centralization: decision authority is located near the top of the organization
  • Decentralization: decision authority is pushed downward to lower organizational levels (what America has moved to in the past 30 years) why? delegation, relieve the burden of top managers; helps employees feel more wanted and needed (employee moral)
  • fit the organization’s strategy (whether it chooses to be centralized or decentralized)

Departmentalization

  • the basis on which individuals are grouped into departments
  • there are five types

5 types of departmentalization

  1. Vertical function structure: people are grouped together in department by common skills; information flows up and down; chain of command converges at the top; managers and employees are compatible because of similar training and expertise
  2. Divisional Structure: grouped together based on a common product, program, or geographic region; product divisions have the same departments
  3. Matrix Structure: functional and divisional chains of command. Some employees report to two bosses; dual chain of command; three departments divided in between two product divisions
  4. Team-based structure: created to accomplish specific tasks
  5. Virtual Network structure: outsources important resources over the internet
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