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an organization is a system of consciously coordinated activities or forces of two or more people

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Organization

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...what?

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Why do organizations organize?

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These are formed to make money, or profits, by offering products or services.

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For-Profit Organizations

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These are formed to offer services to some clients, not to make a profit (examples: hospitals, colleges).

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Nonprofit Organizations

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These are voluntary collectives whose purpose is to advance members' interests (examples: unions, trade associations).

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Mutual-Benefit Organizations

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An organization with a simple structure has authority centralized in a single person, a flat hierarchy, few rules, and low work specialization

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Simple-Structure Organization

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a functional structure, people with similar occupational specialties are put together in formal groups

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Functional Structure Organization

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Positive: Greater efficiency, Better control, Easier to manage. Negative: Differing agendas, Communication & coordination issues, Stress short term-not the strategic

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Advantages/ Disadvantages of Functional Structure

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Grouping by Similar Products or Services- Product divisions group activities around similar products or services

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Divisional Structure-Product Division

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Grouping by Common Customers or Clients- Customer divisions tend to group activities around common customers or clients.

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Divisional Structure- Customer Division

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Grouping by Regional Location-Geographic divisions group activities around defined regional locations

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Divisional Structure- Geographic Division

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Greater efficiency & specialization Tailoring of activities Better coordination with market P/L responsibility Managerial farm team

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Advantages of Product/Geographic/Customer Structure

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Allowable uniformity vs. diversity issues Adds another layer Duplication of staff support services $$$$$

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Disadvantages of Product/Geographic/Customer Structure

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Grid of Functional & Divisional for Two Chains of Command-In a matrix structure, an organization combines functional and divisional chains of command in a grid so that there are two command structures—vertical and horizontal.

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The Matrix Structure

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Great cooperation & coordination Enhance communication between entities Best for projects

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Advantages of Matrix Structure

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Must serve 2 masters Hard to move quickly Complex to manage at the corporate level Expensive due to skilled employee costs

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Disadvantages of Matrix Structure

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A company engaged in varied business operations, many of which seem unrelated. Similar Advantages/Disadvantages to the Multi-divisional structure ... only more so, since we are dealing with several units comprised of several units

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Conglomerate

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Logical Each unit organizes as required Clear-cut P/L responsibility CEO concentrates on corporate strategy

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Advantages of Multi-Divisional Structure

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Great rivalry for resources Communication issues Autonomy may conflict w/corporate aims Duplication--$$$$$ Getting pretty tall

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Disadvantages of Multi-divisional Structure

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Does anyone know? I cant find it anywhere. Heres a possible option off of the internet-An Integrated Product Team (IPT) is a multidisciplinary group of people who are collectively responsible for delivering a defined product or process.[

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Product Teams

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concerned with designing the optimal structures of accountability and responsibility that an organization uses to execute its strategies. We may categorize organizational designs as three types: (1) traditional designs, (2) horizontal designs, and (3) designs that open boundaries between organizations.57

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Organizational Design

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Organizational structure is the plan for, and the reality of, how power and responsibility are distributed across an organization. We humans are social animals. So, inside our groups, we focus on hierarchy; outside, we focus on the identifiable groups or individuals who represent opportunity or threat. Thus, organizational structure is a powerful vehicle for focusing employees' and external stakeholders' attention on a particular aspect of the business. It sends a message that some issues are more important than others.""

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Why Study Structure

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a box-and-lines illustration showing the formal lines of authority and the organization's official positions or work specializations. This is the family tree-like pattern of boxes and lines posted in staff break rooms and given to new hires

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Organization Chart

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A glance up and down an organization chart shows the vertical hierarchy, the chain of command. A formal vertical hierarchy also shows the official communication network—who talks to whom.

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Vertical Hierarchy of Authority (who reports to whom)

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A glance to the left and right on the line of an organization chart shows the horizontal specialization, the different jobs or work specialization.

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Horizontal Specialization (who specializes in what)

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The process of fitting the organization to its environment is called contingency design.

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Contingency Design

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Environment—mechanistic versus organic Environment—differentiation versus integration Life cycle Link between strategy and structure

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Factors Considered for Contingency Design

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Division of labor, also known as work specialization, is the arrangement of having discrete parts of a task done by different people

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Division of Labor

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The span of control, or span of management, refers to the number of people reporting directly to a given manager.5

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Span of Control

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Line managers have authority to make decisions and usually have people reporting to them. Example: President, Vice-President, Head of accounting

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Line Position

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Staff personnel have authority functions; they provide advice, recommendations, and research to line managers. Examples: specialists such as legal counsels and special advisers for mergers and acquisitions or strategic planning

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Staff Position

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centralized authority, important decisions are made by higher-level managers. Very small companies tend to be the most centralized, although nearly all organizations have at least some authority concentrated at the top of the hierarchy

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Centralized Authority

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With decentralized authority, important decisions are made by middle-level and supervisory-level managers. Here, obviously, power has been delegated throughout the organization.

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Decentralized Authority

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Delegation is the process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy. To be more efficient, most managers are expected to delegate as much of their work as possible.

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Delegation

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In a mechanistic organization, authority is centralized, tasks and rules are clearly specified, and employees are closely supervised. Mechanistic organizations, then, are bureaucratic, with rigid rules and top-down communication. This kind of structure is effective at McDonald's because the market demands uniform product quality, cleanliness, and fast service.

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Mechanistic Organization

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In an organic organization, authority is decentralized, there are fewer rules and procedures, and networks of employees are encouraged to cooperate and respond quickly to unexpected tasks. Tom Peters and Robert Waterman called this kind of organization a "loose" structure.76

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Organic Structures

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The hierarchy of authority, or chain of command, is a control mechanism for making sure the right people do the right things at the right time. If coordinated effort is to be achieved, some people—namely, managers—need to have more authority, or the right to direct the work of others.

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Chain of Command

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This means a manager has a limited number of people reporting—three vice presidents reporting to a president, for example, instead of nine vice presidents. An organization is said to be tall when there are many levels with narrow spans of control.

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Tall Organization

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Harder to communicate More managers Narrow span of control; more controls Costlier Stricter Policies standardization More centralization; oversight More opportunities for advancement Mangers may have more expertise and be involved in the work

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Advantages/ Characteristics of Tall Structure

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This means a manager has several people reporting—a first-line supervisor may have 40 or more subordinates, if little hands-on supervision is required, as is the case in some assembly-line workplaces. An organization is said to be flat when there are only a few levels with wide spans of control.

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Flat Organization

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Few levels; quicker communication Wide span of control; fewer controls Greater flexibility Fewer managers-more responsibilities; less knowledge More economical More decentralized

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Advantages/ Characteristics of Flat Structure

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