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Organizational structure

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* The set of formal tasks assigned to individuals and departments * Formal reporting relationships, including lines of authority, decision responsibilities, number of hierarchical levels and span of manager's control * Design of system to ensure coordination

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Organizational chart

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the visual representation of an organizations structure

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Work specialization

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the degree to which organizational tasks are subdivided into individual jobs: also called division of labor - Extensive work specialization leads to efficiency - Specialization creates separation and hinders coordination - small firms a lot of different tasks - big firms lets you focus on one specific task

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Chain of command

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unbroken line of authority that links all individuals in the organization and specifies who reports to whom

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Unity of command

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each employee is held accountable to only one supervisor

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The scalar principles

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a clearly defined line of authority in the organization that includes all employees

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Authority

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the formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve organizationally desired outcome - Authority is vested in organizational positions, not people - Authority flows down the vertical hierarchy - Authority is accepted by subordinates

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Responsibility

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the duty to perform the task or activity as assigned

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Delegation

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the process that managers use to transfer authority and responsibility to positions below them in the hierarchy

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Accountability

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the people with authority and responsibility are subject to reporting and justifying task outcome to those above them in the chain of command

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2 principles associated with chain of command

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Unity of command and the scalar principles

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Line department

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performs tasks that reflect the organizations primary goal and mission - Ex: produce and sell products and services

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Staff department

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include all those that provide specialized skills in support of line departments - EX: Marketing, labor relations, research, accounting and HR

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Line authority

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people in management positions have formal authority to direct and control immediate subordinates

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Staff authority

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is narrower and includes the right to advise, recommend, counsel in the staff specialists area of expertise

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Factors associated with larger span control/less supervision

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• Work is stable and routine • Subordinates perform similar work • Subordinates are in one location • Highly trained/ require little direction • Rules and procedures are defined • Few planning or non-supervisory activities • Managers preference

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5 different approaches to departmentalization (exhibit 10.9)

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* Functional * Divisional * Matrix * Team * Virtual network

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Functional Structure

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Advantage: - Economies of scale and efficient resource use - Development of in-depth skills and development - Centralized decision-making - Top manager direction and control Disadvantages: - Poor communication across functional departments - slow response to external changes; lagging innovation -decisions concentrated at the top of hierarchy creating delay

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Divisional structure

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Advantage: -Fast response; flexibility in an unstable environment - Foster concern for customer need - Better coordination across functional departments Disadvantages: - Duplication of resources - Lack of technical specialization, expertise, and training - poor coordination across divisions

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Matrix structure

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Advantage: -Highly effective in a complex, rapidly changing environment - Efficient use of HR - More efficient use of resources than a single hierarchy - interdisciplinary cooperation; expertise available to all divisions Disadvantages: -Confusion and frustration caused by the dual chain of command. -High level of conflict - Time lost due to meetings and discussions

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Team structure

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Advantage: -Improved coordination and cooperation -Reduced barriers among departments - Quick response to customer request and environmental changes - Morale boost (employees are more enthusiastic) Disadvantages: -Dual loyalties and conflict. - Time and resource spent on meetings - Too much decentralization

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Virtual network structure

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Advantage: - Flexibility and competitiveness on a global scale -Draw on resources and expertise worldwide - Reduced overhead Disadvantage: - Lack of hands-on control. - Higher uncertainty and greater demands on managers - Weaker employee loyalty

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Coordination

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refers to the managerial task of adjusting and synchronizing the diverse activities among different individuals and departments

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Collaboration

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a joint effort between people from two or more departments to produce outcomes that meet a common goal or shared purpose

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Task force

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a temporary team or committee formed to solve a specific short-term problem involving several departments

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Cross-functional team

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furthers horizontal coordination by including members across the organization. It meets regularly and works with continuing rather than temporary problems

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Project manager

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A person responsible for coordinating activities of several departments for the completion of a specific project

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Which of the following typically is NOT considered a staff department?

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- strategic planning - accounting * MANUFACTURING* - HR - research and development

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The matrix structure violates which of the following principles of management?

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unity of command

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