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Chap.14Organizationstructure§14.1DefinitionHowjobtasksareformallydivided,grouped&coordinated1.WorkSpecialization(labordivision)Towhatdegreearetaskssubdividedintoseparatejobs?•Individualsspecializeindoingpartofanactivityratherthantheentireactivity•prevalentbythelate1940s:1.efficientusageofemployee’sskill--lesstrainedreplaceskilled.Efficienttraining.2.Employee’sskillsatperformingataskssuccessfullyincreasethroughrepetition---•bythe1960s:thehumandiseconomiesfromspecialization--boredom,fatigue,stress,lowproductivity,poorquality,increasedabsenteeism,&highturnover.•Enlargethescopeofactivities--doingwhole&completejob,team2.Departmentalization•Thebasisbywhichjobsaregroupedtogether•Groupbyfunction--Deepenspecializedknowledge,Achieveefficienciesthoughspecialization;High-costintegration,Slowlyresponsive•productCluster--MultidivisionalSys.•OrganizedaroundGeography(territory)--scrattered•processdepartmentalization•Customerdepartmentalization3.Chainofcommand•Theunbrokenlineofauthoritythatextendsfromthetopoftheorganizationtothelowesteschelon&clarifieswhoreportstowhom•authority:therightinherentinmanagerialpositiontogiveorders&expecttheorderstobeobeyed•unityofcommand:asubordinateshouldhaveonly1superiortowhomhe(she)isdirectlyresponsible•conflictingdemandsorprioritiesfromsuperiors•lessrelevancetodaybecauseof--&empowering4.SpanofControl•Thenumberofsubordinatesamanagercanefficiently&effectivelydirected•organizationallevel(levelsofmanagement)•strengthofsmallspans:maintainclosecontrol;•drawback:expensiveforadding--;complexverticalcommunication,slowdownD-M,isolateupper--;overlytightsupervisiondiscourage--autonomy•recenteffortstoreducecost,cutoverhead,speedupD-M,getclosertocustomer,empoweremployees.5.Centralization&Decentralization•ThedegreetowhichD-Misconcentratedatasinglepointintheorganization•decentralization:decisiondiscretionispusheddowntolower-levelemployees•actionscanbetakenmorequicklytosolveproblems;morepeopleprovideinputintodecisions;employeesarelesslikelytofeelalienatedfromthosewhomakethedecisionsthataffecttheirworklives•markedtrendtowarddecentralizingD-M,make--moreflexible,responsive6.Formalization•Thedegreetowhichjobswithintheorganizationarestandardized•negativelyrelatedtothejobincumbent’sdiscretionoverhisjob.•Policy,procedure,rule--profession•complexity--divisionoflabor,verticallevels,geographicallydispersedChap.14Organizationstructure§14.2CommonOrganizationaldesignFormalstructure----U-type,M-type,MatrixMultiplefoci,ConflictDowCornning,1967--19761.Thesimplestructure•Astructurecharacterizedbyalowdegreeofdepartmentalization,widespanofcontrol,authoritycentralizedinasingleperson,littleformalization•lean,flat;2or3verticallevels,aloosebodyofemployees,&1individualinwhomtheD-Mauthorityiscentralized•strength--fast,flexible,inexpensivetomaintain,&accountabilityisclear•weakness--difficulttomaintaininanythingotherthansmallorganization;risky,dependson1person.2.TheBureaucracy•Astructurewithhighlyroutineoperatingtasksachievedthroughspecialization,veryformalizedrules®ulations,tasksthataregroupedintofunctionaldepartments,centralizedauthority,narrowspanofcontrol,&D-Mthatfollowsthechainofcommand•strength:performinahighlyefficientmanner;getbynicelywithlesstalented•weakness:subunitconflicts,functionalunitgoalsoverride-;obsessiveconcernwithfollowingtherules.•Thepeakofit’spopularity•obsolescentinthe1990s:hindersemployeeinitiative--themajorityoflargeorganizationstilltakeonit’sbasiccharacteristics,esp.Specialization&highformalization3.TheMatrixStructure•Astructurethatcreatesduallinesofauthority(chainofcommand);combinesfunctional&productdepartmentalization•strength:facilitatecoordinationwhenorganizationhasamultiplicityofcomplex&interdependentactivities;reducebureaupathologies;facilitatetheefficientdeploymentofspecialists•downside:confusion&ambiguityfostertheseedsofconflict,powerstruggle;stressonindividualsChap.14Organizationstructure§14.3NewDesignOptionsSincetheearly1980s,helpfirmscompeteeffectively;theadvancementofITBusinessProcessReengineering1.Theteamstructure•Theuseofteamsasthecentraldevicetocoordinateworkactivities•breaksdowndepartmentalbarriers,requireemployeestobegeneralistsaswellasspecialists•inlargeorganization,complementbureaucracy,achievetheefficiencyofbureaucracy’sstandardizationwhilegainingteam’sflexibility2.Thevirtualorganization•Asmall,coreorganizationthatoutsourcesmajorbusinessfunctions•smallexecutivegroupoverseeactivitiesdoneinhouse,coordinatethenetworkofrelationshipswithoutsourcefirm.•highlycentralized,withlittleornodepartmentalization•focusoncorecompetency:design,marketing,brandname;incontrasttocontrolthroughownership?•advantage:allowsomeonewithaninnovativeidea&littlemoneytocompeteagainstlargecompany•drawback:reducemanagement’scontrolover--3.TheBoundarylessOrganization•Anorganizationthatseekstoeliminatethechainofcommand,havelimitlessspanofcontrol,&replacedepartmentswithempoweredteams•removingvertical&horizontalboundaries--flattenthehierarchy,status&rankareminimized,•breakdownexternalboundaries(barrierstoconstituencies&barri