Please enable JavaScript.

Coggle requires JavaScript to display documents.

OB - CH13 - Organizational Structure - Coggle Diagram

- - - - The major advantage of this groupings is obtaining advantage of efficiencies from putting people with common skills and orientations together into common units.
    - - the major advantage is that the grouping can have increased accountability for product performance, since all activities related to a specific product line are under the direction of a single manager.
    - - this form is valuable when the organization's customers are scattered over a large geographical area and have similar needs based on their location
    - - each process requires different skills, this method offers a basis for the homogeneous categorizing of activities. e.j. casting, press, tubing, finishing, inspecting, packing, and shipping.
    - - customers have a common set of problems and needs best met by having specialists for each.
  - - - wider spans are more efficient in terms of cost
      - wider span reduces effectiveness and has a negative effect on employee performance, because the managers no longer have time to provide the necessary leadership and support
      - By keeping a span of control to 5 or 6 employees, a manager can maintain close control
      - narrow spans are more expensive
      - narrow spans make vertical communication in the organization more complx
      - narrow span slow down decision making and tend to isolate upper management
      - narrow span encourage overly tight supervision and discourage employee autonomy
    - - to ensure performance does not suffer, organizations have been investing heavily in employee training, its easier to manage employees in wider spans when the employees know their jobs inside out.
  - - - Top managers make all the decisions, and lower-level managers merely carry out their directives.
      - centralized organizations are better for avoiding commission errors (bad choices)
      - Oversight regarding legality and ethical issues can be better addressed under a centralised approach.
    - - decision making is pushed down to the managers closest to the action or even to work groups.
      - emplyees can act more quickly to solve problems, more people provide input into decisions, and employees are less likely to feel alienated from those who make decisions that affect their work lives.
      - make it easier to address customer concerns as well.
      - decentralized organizations are better for avoiding omission errors (lost opportunities).
      - Recent trends are towards this type of organization, pushing lower level managers to decision making, considering they are closer to the problem, and to be more flexible and responsive.
      - research and development offices in multiple locations were better at producing innovation that companies than companies that centralized all research and development in a single office.
      - decentralization is often necessary for companies with offshore sites because localized decision making is needed to respond to each region's profit opportunities, client base, and specific laws, while centralized oversight is needed to hold regional managers accountable.
    - - highly formalized organizations, show explicit job descriptions, lots of organizational rules, and clearly defined procedures covering work processes.
        
        employees can be expected always to handle the same input in exactly the same way, resulting in consistent and uniform output where there is high formalization
        
        it eliminates the possibility of employees engaging in alternative behaviour but also removes the need for employees to consider alternatives.
      - low formalization shows job behaviours that are relatively nonprogrammed, and employees have a great deal of freedom to exercise discretion in their work.
- - - - it becomes increasingly inadequate as an organization grows because its low formalization, and high centralization tend to create information overload at the top.
      - as size increases decision making typicalle becomes slower, since a single executive tries to continue making all the decisions.
      - this proves to be the undoing of many small businesses
      - its risky, since everything depends on only one eprson.
    - - These businesses have more complex dynamics than nonfamily businesses, since they face both family/personal relations and business/management relations.
      - family businesses require good governance structures to help them manage conflicts that will arise
      - sometimes family businesses seek benefit to the family rather than wealth maximization
  - - - its primary strength is its ability to perform standardized activities in a highly efficient manner.
      - get nicely with less talented and less costly, middle, lower level managers.
      - rules and regulations substitute for managerial discretion
      - centralized decision making
      - little need for innovation or experienced decision makers below the level of senior executives.
      - it is an effective structure for ensuring consistent application of policies and practices and for ensuring consistent application of policies and practices and for ensuring accountability
    - - specialization can create conflicts in which functional-unit goals override the overall goals of the organization.
      - functional units goals can sometimes override the overall goals of the organization
      - power being concentrated in the hands of just a ferw people, with others expected to follow their orders unquestioningly.
      - obsessive concern with rules
      - when cases arise that don't fit rules, there's no room for modification
      - the bureaucracy is efficient only as long as employees confront problems that they have previously encountered and for which programmed decision rules have already been established.
  - - - fosters coordination when the organization has a number of complex and interdependent activities.
      - dual lines of authority reduce tendencies of departamental members to become so busy protecting their little worlds that the organization's overall goals become secondary
      - it achieves economies of scale and facilitates the allocation of specialists by providing both the best resources and an effective way of ensuring their efficient deployment
      - Information permeates the organization and more quickly reaches those people who need it.
    - - it creates confusion
      - it has a tendency to create power struggles
      - the lack of chain of command often creates ambiguity which results in conflict
      - reporting to more than one manager introduces role conflict, and unclear expectations introduce role ambiguity.
      - the confort of bureaucracy's predictability is replaced by insecurity and stress
- - - - investment, companies that downsize to focus on core competencies are more effective when they invest in high-involvement work practices afterward.
      - communication, when employers talk about downsizing with emplyees early, they are less worried about the outcomes and feel their perspectives are taken into account.
      - participation, employees will feel less worried if they participatee in the process in some way. severance packages, retirement programs, all of those can work.
      - assistance, severance, extended health care, job search assistance demonstrate a company cares about its employees and honours their contributions.
- - - - Will use competitive pay and benefits to attract top candidates and motivate employees to take risks.
      - some degree of mechanistic structure can actually benefit innovation
      - well developed communication channels, policies for enhancing long-term commitment, and clear channels of authority all may make it easier for rapid change to occur smoothly.
    - - walmart, etc cost minimizing organizations pursue fewer policies meant to develop commitment among their workforce.
    - - H&M that copy designer styles follow this strategy.
      - moleskine, for example, to promote growth, it imitates the structure of a larger successful fashion company to achieve expansion.
      - they use a mechanistic structure in order to maintain tight controls and low costs in their current activities, but create organic subunits in which to pursue new undertakings.
  - - - routine activities are characterized by automated and standardized operations, such as an aseembly line.
        
        these prefer mechanistic structures
      - non-routine activities are customized and require frequent revision and updating, such as writing and editing a book
        
        these prefer organic structures