Professional Documents
Culture Documents
Organizational Structure
Organizational Structure defines how job tasks are formally divided, grouped and coordinated
The organization structure determines reporting relationships and helps to clarify individuals responsibilities
Work Specialization
Work can be performed more efficiently if employees are allowed to specialize Henry Ford was the first to really explore specialization, allowing him to turn out many new cars a day from it Specialization is the degree to which tasks are subdivided into separate jobs (the task of assembling an engine)
Allows employees to improve through repetition
Pay scales often reflect the degree of skills required for a job. Employees acquire new skills to earn more Specialization also encourages the development of specialized tools to further drive efficiency Specialization can lead to boredom, fatigue, stress, and lower productivity and quality Building teams of interchangeable skills can help to reduce boredom
Departmentalization
Departmentalization is a basis on which jobs re grouped to coordinate common or linked tasks 5 Key Types of Departmentalization
Functional orienting groups by similar task (engineering dept) Product operating a group oriented around a complete product (Business Units are similar when the group owns the P&L) Geographic Common in Sales organizations, organizing by territory Process Orienting around a portion of a process (most common in a manufacturing firm, such as finishing dept, procurement dept) Customer Orienting around types of customers (Corel organizes around retail, small business, corporate, government, legal)
Chain of Command
Chain of command the unbroken line of authority from the top to the bottom of the organization Defines who has the right to give out orders and expect them to be obeyed Currently, this element of structuring organizations is used less Teams have been empowered to carry out specific tasks
Span of Control
Span of Control refers to the number of levels and managers an organization has All things equal, generally, the wider or larger the span, the more efficient. Wider spans also encourage more employee empowerment However, managers cannot manage an infinite number of employees effectively (general rule is 6 to 18 employees)
Centralization/decentralization
Centralization the degree to which decision making is concentrated at a single point in the organization The more decisions made by top brass without consulting employees, the more centralized Decentralization is a growing trend to leverage front line employees proximity to the action.
Increases empowerment and job satisfaction Improves quality of decision making Allows senior management to concentrate on more strategic matters
Formalization
Formalization the degree to which jobs within the organization are standardized Formalization provides structure and can build quality but takes away control and decision making Formalization is used most often in the food, airline, automotive industries
The outcome is a flat structure, fast, simple, clear, flexible This structure gives a small company that small company feel.
But it is very difficult to maintain once the company grows and owners cannot directly impact every decision
The Bureaucracy
Characterized by
Standardization of tasks and processes (filling out forms, you guessed it, paper forms!!!, aaahhh) Highly routine tasks, specialization with formalized rules Centralized authority and clear vertical communication lines
This structure strives for efficiency, economies, minimum duplication of tasks It does well when individual employees leave the organization as it is easy to train new staff on established processes
A very popular organization structure in the high-tech world Combines the benefits of functional and product departmentalization forms Functional specialists are grouped together to forma pool of resources (developers, testers, documentation specialists) Product departments (or Business Units), responsible for the complete product, draft individuals from their pools onto product teams Employees end up with 2 bosses Ads: Promotes product ownership and specialization
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Century
Usually cross-functional teams with a specific set of goals, helps to break down barriers and decentralizes decision making to the team level
Organization Size As organizations grow, different stresses are placed on the organization, as a result it might respond with a reorganization of resources Environment The organizational environment is made up of institutions or forces outside the organization that affect its ability to perform Chapter 13