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Chapter 6 Basic Organization

The elements of structure


Contingency variables affecting structure
Organization design applications
Organization culture
The Elements of Structure
Work specialization
Chain of command
Span of control
Authority and responsibility
Centralization versus decentralization
Departmentalization
Work Specialization
Definition:
Work specialization is a component of
organization structure that involves
having each discrete step of a job done by
a different individual rather than having
one individual do the whole job.
Exhibit 6-1 Economies and Diseconomies
of Work Specialization

High
Impact from
Impact from human
economies of diseconomies
specialization
yti vi t c udor P

Low
Low High
Work Specialization
CEO

Executive Executive
President
Vice President Vice President

Vice Vice Vice Vice Vice


President President President President President

Region Region Region Region Region


1 2 3 4 5
District District District District District District District
A B C D E F G

Exhibit 6-2 Chain of Command


Span of Control

Definition
It is the number of subordinates a
manager can direct efficiently and
effectively.
Contingency Variables
The level in the organization
The quality of employees
Similarity of employee tasks
The complexity of tasks
The physical proximity of employees
The degree of standardization of work procedures
The strength of the organization’s value system
The sophistication of the organization’s MIS
The preferred managing style of managers
Authority and Responsibility

Definition
Line authority and staff authority
How do authority and power differ?
The types of power
Authority:
It is the rights inherent in a managerial position
to give orders and expect subordinates to be
obeyed.
Responsibility:
It is an obligation to perform assigned activities.
Power:
It is an individual’s capacity to influence
decisions.
Line Authority and Staff Authority
Line authority entitles a manger to direct the work
of an employee.
A manager with line authority has the right to direct the
work of employees and to make certain decisions without
consulting anyone
Staff authority is used to support, assist, and
advise the holders of line authority.
Whether a manager’s function is classified as line
or staff depends on the organization’s objectives.
Executive
Line authority
Director
Staff authority Assistant to the
Executive Director

Director of
Director of Director of Other
Human
Operations Purchasing directors
Resources

Unit 1 Unit 2
Manager Manager

Other Human Other Human


Operations Purchasing Operations Purchasing
resources resources

Exhibit6-3 Line Versus Staff Authority


The Types of Power
Coercive power: power on fear.
Reward power: power based on the ability to
distribute something that others value.
Legitimate power: power based on one’s position
in the formal hierarchy.
Expert power: power based on one’s expertise,
special skills, or knowledge.
Reference power: power based on identification
with a person who has desirable resources or
personal traits.
Centralization Versus Decentralization
Centralization is a function of how much decision-
making authority is pushed down to lower levels in
an organization; the more centralized an organization
is, the higher is the level at which decisions are made.
Decentralization refers to the pushing down of
decision-making authority to lowest levels of an
organization.
Centralization-decentralization is not an either-or
concept. It’s a degree phenomenon.
The Five Ways to Departmentalization

Functional departmentalization
Product departmentalization
Customer departmentalization
Geographic departmentalization
Process departmentalization

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