RESUME

MANAGEMENT
CHAPTER 10
STUDENT DEVELOPMENT DIVISION
MANAGEMENT STUDENT SOCIETY 2013
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Organizing : arranging & structuring work to accomplish organizational goals; design an

organizations structure
Organizational Structure: the formal arrangement of jobs within an organization (shown
visually in organizational chart)
Organizational Design: a process that involves decisions about 6 key elements:

work specialization
departmentalization
chain of command
span of control
centralization and decentralization
formalization

Work Specialization -> dividing work activities into separate job tasks (division of labor);
makes efficient use of the diversity skills, lead to great increase in productivity
Human Diseconomies: boredom, fatigue, low productivity, poor quality, increased
absenteeism

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After deciding what job tasks will be done by whom, we do departmentalization.

Departmentalization: basis how jobs are grouped together
Five common forms of departmentalization:

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COC: Line of authority extending from upper organizational levels to lower levels; who do I
report to? Who do I go if I have a problem?
Authority: refers to the rights inherent in a managerial position to tell people what to do &
to expect to do it.
COC & Line Authority -> entitles a manager to direct the work of an employee

Responsibility: obligation or expectation to perform any assigned duties

Unity of command: a person should report to only one manager

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Span of control: the number of employees a manager can efficiently & effectively manage; It
determines the number of levels & managers in an organization. The wider the span, the
more efficient.
Centralization: the degree to which decisions making takes places at upper levels of the
organization.
Decentralization: the degree to which lower level employees provide input or make
decisions.
Employee empowerment: gives employees more authority to make decisions.
Formalization: how standardized an organizations jobs are and the extent to which
employee behavior is guided by rules & procedures.

Mechanistic & Organic Structures

Mechanistic Organization: natural result of combining the six elements of structures.
Organizational design thats rigid & tightly controlled.
Organic Organization: organizational designs thats highly adaptive & flexible. Allow
standardized jobs & regulations to change rapidly as required.

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Contingency factors affecting structural choice:

1. Strategy & Structure -> certain structural designs work best with different
organizational strategies.
2. Size & Structure -> large organization tend to have more specialization,
departmentalization, centralization than small organization.
3. Technology & Structure -> routine technology use mechanistic organization & Nonroutine technology use organic organization
Unit production: the production of items in units of small batches
Mass production: large batch manufacturing
Process production: included continuous process production
4. Environmental uncertainty & structure -> simple environment with little
uncertainty, complex environment with a lot of uncertainty
Traditional Organizational Design
Simple structure -> organizational design with low departmentalization, wide spans of
control, centralized authority & little formalization.
(+) Fast, flexible, inexpensive to maintain
(-) Reliance one person is risky
Functional structure -> organization design that groups similar or related occupational
specialties together
(+) cost saving from specialization
(-) can cause managers to lose sight of whats best for the overall organization
Divisional structure -> organization structure made up of separate, semiautonomous units
or division
(+) focuses on results
(-) increases costs & reduces efficiency

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"It is hard to fail, but it is worse never have tried to succeed." - Theodore Roosevelt

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