Please enable JavaScript.
Coggle requires JavaScript to display documents.
Firm Structure & Departamentalization, Garazi García Antruejo - Coggle…
Firm Structure & Departamentalization
Departamentalization Types
Functional
Grouping by main functions performed
Advantages
Specialization
Simplifies training
Leverages experience
Disadvantages
Loss of global view, coordination problems
Hinders training for general manager role
Is common but limits global firm view
Geographical/Territorial
Grouping by geographic area (e.g., McDonald's example)
Advantages
Focus on local markets/issues
Proximity benefits (suppliers, market knowledge)
Disadvantages
Service duplication, increased costs
Control problems for top management
Product
Grouping by product line (independent operating units)
Advantages
Focus on product line, improved quality
Responsibility rests at division level
Disadvantages
Hinders economic maintenance of central services (duplication)
Customer
Grouping based on customer characteristics (age, purchasing power)
Advantages
Focus on customers and satisfaction
Matrix (Matrical)
Combines Functional + Product/Project
Key Characteristics
Dual Command (breaks unity-of-command)
Horizontal communication/teamwork
Advantages
Flexibility, adaptability, innovation
Self-managed Teams / Mini-factories
Key Characteristics
Autonomy (Managed Autonomy)
Unequal/Irregular Power Distribution
Redundancy (Middle line functions absorbed by operating core)
Advantages
Greater dynamism, increased creativity/productivity
Composite or Mixed
Hybrid approach combining different models (broader than Matrix)
Organizational Fundamentals
Organizational Structure
Definition
Pattern of relationships creating work division, organization, coordination
Key Design Questions (Table 4.1)
Subdivide tasks?
Answer: Work Specialization
Group works?
Answer: Departmentalization
Reporting lines?
Answer: Chain of Command
Manager span?
Answer: Scope of Control
Decision authority location?
Answer: Centralization/Decentralization
Rules/Procedures needed?
Answer: Formalization
Organizational Design
Determines structure based on strategy, personnel, technology, tasks
Vertical Structuring: Authority & Delegation
Authority & Responsibility
Authority definition
Right to command & power to be obeyed (Legal + Personal aspects)
Responsibility definition
Duty to perform assigned tasks
Types of authority
Formal/Line Authority
Exercised by virtue of position/role held
Staff Authority
Provides specialized knowledge/guidance; enhances line manager effectiveness
Functional Authority
Right to issue binding orders outside own department (often delegated to Staff)
Delegation
Definition
Entrusting a task/authority to a delegate; delegate assumes responsibility
Good Delegation Characteristics
Define specific objectives
Delegate necessary authority/resources
Establish control without micromanagement
Difficulties (Delegate)
Fear of incompetence, lack of trust, desire for perfection
Centralization VS Decentralization
Centralizaed firm
Most decisions made by single person/small top group
Decentralizaed firm
Most members participate in decision-making
Factors Influencing Decentralization
Training/Skills of personnel
Size & Diversification
Internal Communication effectiveness
Advantages
Frees top management
Promotes decision-making acceptance
Disadvantages
Difficulty in uniform policies
Coordination difficulties; risk of losing control
Garazi García Antruejo