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67 Cards in this Set
- Front
- Back
ORGANIZATIONAL STRUCTURE |
Division of labor and patterns of coordination, workflow, and formal power that direct organizational activities |
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2 FUNDAMENTAL PROCESS IN ORGANIZATIONAL STRUCTURE |
1. Division of Labor 2. Coordination |
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DIVISION OF LABOR |
1. Subdividing work into separate jobs assigned to different people 2. Limited by ability to coordinate work 3. Potentially increases work efficiency 4. Necessary as company grows and work becomes more complex |
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3 COMPONENTS TO COORDINATING WORK ACTIVITIES |
1. Informal Communication 2. Formal Hierarchy 3. Standardization |
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INFORMAL COMMUNICATION |
1. Sharing information on mutual tasks, forming common mental models to synchronize work activities 2. Good for flexibility, nonroutine and ambiguous situations 3. Easiest in small firms |
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FORMAL HIERARCHY |
Assigning legitimate power to individuals, who then use this power to direct work processes and allocate resources |
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STANDARDIZATION |
Creating routine patterns of behavior or output |
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SUBTYPES/STRATEGIES OF INFORMAL COMMUNICATION |
1. Direct communication 2. Liaison roles 3. Integrator roles 4. Temporary teams |
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LIAISON ROLE |
Communicate and share information with coworkers in other work units |
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INTEGRATOR ROLES |
Responsible for coordinating a work process by encouraging employees in each work unit to share information and informally coordinate work activities |
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CONCURRENT ENGINEERING |
The organization of employees from several departments into a temporary team for the purpose of developing a product or service |
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SUBTYPES/STRATEGIES OF FORMAL HIERARCHY |
1. Direct supervision 2. Formal communication channels
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SUBTYPES/STRATEGIES OF STANDARDIZATION |
1. Standardized processes, i.e., job descriptions 2. Standardized outputs, i.e., sales targets 3. Standardized skills, i.e., training |
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FOUR ELEMENTS OF ORG STRUCTURE |
1. Span of control 2. Centralization 3. Formalization 4. Departmentalization |
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SPAN OF CONTROL (SPAN OF MANAGEMENT) |
The number of people directly reporting to the next level in the hierarchy; the fewer the people the more narrow the span |
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WIDER SPAN OF CONTROL POSSIBLE WHEN: |
1. Other coordinating mechanisms are present 2. Routine tasks 3. Low employee interdependence |
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AS COMPANIES GROW, THEY: |
1. Build a taller hierarchy 2. Widen span, or both |
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PROBLEMS WITH TALL HIERARCHIES |
1. Overhead costs 2. Worse upward information 3. Focus power around managers, so staff less empowered |
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CENTRALIZATION |
The degree to which formal decision authority is held by a small group of people, typically those at that top of the organizational hierarchy. |
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VARYING DEGREES OF CENTRALIZATION IN DIFFERENT AREAS OF THE COMPANY |
1. Sales--decentralized; front line and supervisors 2. Information Systems--centralized; upper management 3. Production--midpoint; middle management |
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FORMALIZATION |
The degree to which organizations standardize behavior through rules, procedures, formal training, and related mechanisms. Increases as firms get older, larger, and more regulated |
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PROBLEMS WITH FORMALIZATION |
1. Reduces organizational flexibility 2. Discourages organizational learning/creativity 3. Reduces work efficiency 4. Increases job dissatisfaction and work stress |
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ORGANIC STRUCTURE |
1. Wide span of control 2. Low formalization 3. Decentralized decisions |
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MECHANISTIC STRUCTURE |
1. Narrow span of control 2. High formalization 3. High centralization
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DEPARTMENTALIZATION |
Specifies how employees and their activities are grouped together |
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3 FUNCTIONS OF DEPARTMENTALIZATION |
1. Establishes chain of command 2. Creates common mental models, measures of performance, etc. 3. Encourages staff to coordinate through informal communication |
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6 TYPES OF DEPARTMENTALIZATION |
1. Simple structure 2. Functional structure 3. Divisional structure 4. Team-based structure 5. Matrix structure 6. Network structure |
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FUNCTIONAL STRUCTURE |
An organizational structure in which employees are organized around specific knowledge or other resources; i.e., production, marketing, accounting, etc. |
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BENEFITS OF FUNCTIONAL STRUCTURE |
1. Economies of scale 2. Supports professional identity and career paths 3. Easier supervision |
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LIMITATIONS OF FUNCTIONAL STRUCTURE |
1. More emphasis on subunit than organizational goals 2. Higher dysfunctional conflict 3. Poorer coordination--requires more controls |
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DIVISIONAL (MULTIDIVISIONAL OR M-FORM) STRUCTURE |
An organizational structure in which employees are organized around geographic areas, outputs, or clients; i.e., healthcare, lighting products, consumer lifestyle; best form depends on environmental diversity or uncertainty |
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3 VARIATIONS OF DIVISIONAL STRUCTURE |
1. Geographic divisional structure 2. Product/service divisional structure 3. Client divisional structure |
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GEOGRAPHICAL DIVISIONAL STRUCTURE |
Organizes employees around distinct regions of the country or world |
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FEWER GEOGRAPHIC DIVISIONS BECAUSE: |
1. Technology presents less of a need for local representation 2. Reduced geographic variation; freer trade 3. More global clients |
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PRODUCT/SERVICE DIVISIONAL STRUCTURE |
Organizes employes around distinct outputs |
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CLIENT DIVISIONAL STRUCTURE |
Organizes employees around specific customer groups |
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GLOBALLY INTEGRATED ENTERPRISE |
1. Connects work processes around the world rather than replicating them within each country or region 2. Functional heads are geographically distributed 3. Firm's "home" country is no longer focus of business |
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BENEFITS OF DIVISIONAL STRUCTURES |
1. Building block structure -- accommodates growth 2. Focuses on markets/products/clients rather than tasks |
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LIMITATIONS OF DIVISIONAL STRUCTURES |
1. Duplication, inefficient use of resources 2. Specializations are dispersed--silos of knowledge 3. Revising divisional structure emphasis produces politics and conflict among executives |
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TEAM-BASED STRUCTURE |
1. Self-directed work teams 2. Teams organized around work processes 3. Typically organic structure 4. Wide span of control 5. Highly decentralized 6. Low formalization |
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BENEFITS OF TEAM-BASED STRUCTURE |
1. Responsive, flexible 2. Lower admin costs 3. Quicker, more informed decisions |
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LIMITATIONS OF TEAM-BASED STRUCTURE |
1. Interpersonal training costs 2. Slower during team development 3. Role ambiguity increases stress 4. Problems with supervisor role changes 5. Duplication of resources |
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MATRIX STRUCTURE |
An organizational structure that overlays structures in order to leverage the benefits of both. |
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BENEFITS OF MATRIX STRUCTURES |
1. Uses resources and expertise effectively 2. Improves communication, flexibility, innovation 3. Focuses specialists on clients and products 4. Supports knowledge sharing within specialty 5. Solution when two divisions have equal importance |
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LIMITATIONS OF MATRIX STRUCTURES |
1. Increases goal conflict and ambiguity 2. Two bosses dilutes accountability 3. More conflict, organizational politics, and stress |
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NETWORK STRUCTURE |
An alliance of several organizations for the purpose of creating a product or serving a client |
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BENEFITS OF NETWORK STRUCTURES |
1. Highly flexible 2. Potentially better use of skills and technology 3. Not saddled with same resources for all products |
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LIMITATIONS OF NETWORK STRUCTURES |
1. Exposed to market forces 2. Less control over subcontractors than in-house |
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CONTINGENCIES OF ORGANIZATIONAL DESIGN |
1. External Environment 2. Organizational size 3. Technology 4. Organizational strategy
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FOUR CHARACTERISTICS OF EXTERNAL ENVIRONMENTS INFLUENCE THE TYPE OF ORGANIZATIONAL STRUCTURE |
1. Dynamism 2. Complexity 3. Diversity 4. Hostility |
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DYNAMIC ENVIRONMENTS |
1. High rate of change 2. Lead to novel situations 3. Lack identifiable patterns 4. Organic structures are well suited to this type of environment |
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STABLE ENVIRONMENTS |
1. Regular cycles of activity 2. Predictable changes in supply and demand 3. Mechanistic structures are more efficient with this type of environment |
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COMPLEX ENVIRONMENT |
1. Many elements (such as stakeholders) 2. Decentralized
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SIMPLE ENVIRONMENT |
1. Few environmental elements 2. Less need to decentralize |
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DIVERSE ENVIRONMENT |
1. Several products, clients, regions 2. Use divisional structure aligned with the diversity |
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INTEGRATED |
1. Single product, client, place 2. Use functional structure, or geographic division if global |
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HOSTILE ENVIRONMENT |
1. Competition and resource scarcity 2. Reduced predictability of access to resources and demand for outputs 3. Use organic structure for responsiveness |
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MUNIFICENT ENVIRONMENT |
1. Plenty of resources and product demand 2. Less need for organic structure |
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AS ORGANIZATIONS GROW, THEY HAVE: |
1. More division of labor (job specialization) 2. Greater use of standardization 3. More hierarchy and formalization 4. More decentralization |
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TECHNOLOGY |
The mechanisms or processes by which an organization turns out its product or service. |
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TECHNOLOGICAL CONTINGENCIES |
1. Variability 2. Analyzability |
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VARIABILITY |
The number of exceptions to standard procedure that tend to occur |
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ANALYZABILITY |
The predictability or difficulty of the required work |
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ORGANIZATIONAL STRATEGY |
The way the organization positions itself in its setting in relation to its stakeholders, given the organization's resources, capabilities, and mission. |
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STRUCTURE FOLLOWS STRATEGY |
1. Strategy points to the environments in which the organizations will operate 2. Leaders decide which structure to apply |
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INNOVATION STRATEGY |
A more organic structure would be preferred because it is easier for employees to share knowledge and be creative |
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COST LEADERSHIP STRATEGY |
A mechanistic structure is preferred because it maximizes production and service efficiency. |