ch7

• Organizational design


  The process of making decisions about how specialized jobs should be, the rules to guide employees' behaviors, and the level at which decisions will be made
• Six key elements in organizational design

  • Work specialization
  • Departmentalization
  • Authority and responsibility
  • Span of control
  • Centralization versus decentralization
  • Formalization
• Work specialization


  The division of work activities into separate job tasks
• Work specialization


  • Increases work output
  • Allows organization to efficiently use the diversity of skill
• Work specialization has limitations
• Departmentalization


  How jobs are grouped together
• Types of departmentalization


  • Functional
  • Product
  • Customer
  • Geographic
  • Process
• Authority


  The rights inherent in a managerial position to give orders and expect the orders to be obeyed
• Responsibility


  When employees are given rights they also assume a corresponding obligation to perform and be held accountable for their performance
• Chain of command


  The line of authority extending from upper organizational levels to lower levels, which clarifies who reports to whom
• Types of authority relationships

  • Line authority
  • Staff authority
• Line authority


  Entitles a manager to direct the work of an employee
• Staff authority


  Functions to support, assist, advise and generally reduce some of their informational burdens
• Unity of command


  A structure in which each employee reports to only one manager
• Authority


  A right whose legitimacy is based on an authority figure's position in the organization; it goes with the job
• Power


  An individual's ability to influence decisions
• Types of power


  • Coercive power
  • Reward power
  • Legitimate power
  • Expert power
  • Referent power
• Effective and efficient span of control depends on employee experience and training, similarity of employee tasks, and complexity of those tasks
• Centralization


  Decision making takes place at upper levels of the organization
• Decentralization


  Lower-level managers provide input or actually make decisions
• Formalization


  How standardized an organization's jobs are and the extent to which employee behavior is guided by rules and procedures
• Mechanistic organization (or bureaucracy)

  A structure that is high in specialization, formalization and centralization
• Organic organization


  A structure that is low in specialization, formalization and centralization
• Characteristics of mechanistic and organic organizations

  • Rigid hierarchical relationships, fixed duties, many rules, formalized communication channels, centralized decision authority, taller structures (mechanistic)
  • Collaboration, adaptable duties, few rules, informal communication, decentralized decision authority, flatter structures (organic)
• Organizational strategy


  Passionate pursuit of innovation favors organic structure, passionate pursuit of cost control favors mechanistic structure
• Organizational size


  Less than 2,000 employees can be organic, more than 2,000 employees forces organizations to become more mechanistic
• Types of technology


  • Unit production
  • Mass production
  • Process production
• Organizational technology


  Unit production favors organic structure, mass production and process production favor mechanistic structure
• Organizational environment


  Stable environment favors mechanistic structure, dynamic environment favors organic structure
• Traditional organizational designs


  • Simple structure
  • Functional structure
  • Divisional structure
• Contemporary organizational designs


  • Team structure
  • Matrix and project structure
  • Boundaryless organization
  • Learning organization
• Team structure


  An organizational structure where the entire organization is made up of work teams that do the organization's work
• Matrix structure


  Specialists from different functional departments work together to complete an assigned project
• Project structure


  Employees continuously work on projects, with no formal departments they return to after project completion
• Boundaryless organization


  An organization whose design is not imposed by a predefined structure, with no internal or external boundaries
• Boundaryless organizations


  • Virtual organization
  • Network organization
• Challenges faced by today's organizations

  • Keeping employees connected
  • Managing global structural issues
  • Building a learning organization
  • Designing flexible work arrangements
• Handheld devices, videoconferencing, and other technologies help keep employees connected
• Managers need to consider cultural implications when designing global organizational structures
• Learning organization


  An organizational mindset or philosophy where employees continually acquire and share new knowledge and apply that knowledge when making decisions or performing their work