Chapter 10: Organizing vertical structure and Division of Labor
Organizing:
the deployment of organizational resources to achieve strategic
goals
Authority:
the formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve organizationally desired outcomes
Staff authority:
narrow authority that includes the right to advise, recommend, and counsel in the staff specialists’ area of expertise
Decentralization:
decision authority is pushed downward to lower organization levels
Functional structure:
the grouping of activities by common
function from the bottom to the
top of the organization
Cross-functional teams consist of
employees from various functional
departments who are responsible to meet
as a team and resolve mutual problems
Workflow technology:
knowledge, tools, techniques, and activities used to
transform organizational inputs into outputs
Organization structure:
The design of systems to ensure effective coordination of employees
across department
Responsibility:
the duty to perform the task or activity as assigned
Span of management:
the number of employees reporting to a supervisor
Which of the following characteristics is usually associated with organizations that
use a decentralized structure?
Change and uncertainty
Divisional structure:
departments are grouped together based on similar
organizational outputs
Permanent teams are
groups of employees
who are organized in a way similar to a
formal department
Small-batch production:
firms produce goods in batches of one or a few products designed to customer specification
Organization chart:
the visual representation of an organization's structure
Accountability:
the mechanism through which authority and responsibility are aligned
Tall structure:
span of management that is narrow and has many hierarchical levels
Departmentalization:
basis for grouping positions into departments and
departments into the total organization
Matrix approach:
combines both functional and divisional approaches simultaneously,in the same part of the
organization
Team-based structure is the
entire organization is made up of horizontal
teams that coordinate their work and work
directly with customers to accomplish the
organization’s goals
Mass production:
standardized production runs of a large volume of identical products
Division of labor:
the degree to which organizational tasks are subdivided into separate jobs
shying away due to isolation and boredom
Delegation:
the process that managers use to transfer authority and responsibility down the hierarchy
Flat structure:
span of management that is wide and has few hierarchical levels
• Common structural problem is too many levels with a span that is too narrow
Five Approaches to Structural Design:
− Functional
− Divisional
− Matrix
− Team
− Virtual network
Two-boss employees are
employees who report to two supervisors
simultaneously and must resolve conflicting demands from the matrix bosses
Outsourcing:
farming out certain activities, such as manufacturing or credit processing
Continuous process production:
entire workflow is mechanized and runs without
stopping
Work specialization, or placing responsibility for distinct organizational tasks into separate jobs, is also known as
Division of Labor
Line authority:
managers have formal authority to direct and control immediate subordinates
Centralization:
decision authority is located near the top of the organization
Matrix boss:
the product or functional boss who is responsible for one side of the matrix
• Top leader:
person who oversees both the product and functional chains of
command and is responsible for the entire matrix
Virtual network structure is
the firm subcontracts most of its major
functions to separate companies and
coordinates their activities from a
small organization at headquarters
Technical complexity is the
degree to which machinery is used in production without
people
Coordination:
the managerial task of collaborating across departments
Collaboration:
joint effort between people from two or more departments to produce outcomes that meet a common goal or shared purpose and that are
typically greater than what could be achieved working alone
Reengineering:
radical redesign of business processes to achieve dramatic improvements
Project manager is a
person who is responsible for coordinating the activities of several departments for the completion of a specific project
Relational coordination is the
frequent horizontal coordination and communication
carried out through ongoing relationships of shared goals, shared knowledge, and mutual respect
− Mechanistic organizations:
− Organic organizations:
- efficiency is the goal in a stable environment
- innovation is the goal in a rapidly changing
environment
Structure depends on a variety of contingencies. If the right structure is “designed to fit” in order to achieve an organization’s strategic goals, which
of these contingency factors is most important to consider?
a. Strategy
b. Environment
c. Technology
Strategy