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BASIC ORGANIZATIONAL DESIGN (contingency factors affecting structural…
BASIC ORGANIZATIONAL DESIGN
designing organizational struture
organizational structure
: formal arrangement of jobs within an organization
organizational design
: a process that involves decisions about six key elements
work specialization
: dividing work activities into separate job tasks to increase work outputs
departmentalization
: after deciding what job tasks will be done by whom, common work activities need to be grouped back together so work gets done in a coordinated and integrated way
chain of command
: the line of authority extending from upper organizational levels to lower levels which clarifies who reports to whom
span of control
: how many employees can a manager efficiently and effectively manage
if top managers make key decisions with little input from below, then the organization is more
centralized
. the more that lower-level employees provide input or actually make decisions, the more
decentralization
there is
formalization
: how standardized an organization's jobs are and the extent to which employee behavior is guided by rules and procedures
mechanistic and organic structures
organic organization
: has a loose structure that allows it to change rapidly as required
mechanistic organization
(bureaucracy): ensures the existence of a formal hierarchy of authority
contingency factors affecting structural choice
strategy & structure
: organic structure works well when an organization is pursuing meaningful and unique innovations; mechanic organization works best for companies wanting to tightly control costs
size & structure
: large organizations tend to have more specialization, departmentalization, centralization, and rules & regulations
technology & structure
: unit production, mass production, process production
environmental uncertainty & structure:
in stable and simple environments, mechanistic designs can be more effective; vice versa
traditional organizational designs
simple structure
: low departmentalization, wide spans of control, authority centralized in a single person, little formalization
functional structure
: groups similar or related occupational specialties together
divisional structure
: made up of separate business units or divisions