Chapter 16 Study Guide for Final

8/3/2019 Chapter 16 Study Guide for Final

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Chapter 16

rganizational Structure and Design. Define each.

Organizational Structure- The formal system of task and reporting relationships that controls,

coordinates, and motivates employees so that they cooperate and work together to achieve an

organizations goalsOrganizational Design- The process by which managers select and manage various dimensionsand components of organizational structure and culture so that an organization can achieve its

goals

ntingency Theoryexplain the three important contingencies that factor into the design of organizationalture and how they impact choice of org. structure.

1. The Organizations Environment- the social, global, and cultural environmenta. Greater uncertainty leads to a decentralized structure.b. Greater certainty leads to a more centralized structure.

2. The Organizations Technology-the combination of skills, knowledge, tools, machines,computers, and equipment used in the design, production, and distribution of goods and

services.a. The more complex the technology used in an organization, the more flexible theorganizational structure required.

i. Task Variety and Task Analyzability determine complexity3. The Organizations Human Resources and the Employment Relationship-the

characteristics of its human resources and the nature of the employment relationship.

a. The more highly skilled an employers work force, the more likely it is thatemployees will work together in teams or groups to perform their tasks.

b. The longer and more harmonious an employers relationship with employees, themore likely it is that the employer will choose a structure that allows employees

the freedom to make important decisions.

c. Highly skilled employees such as doctors or scientists require the freedom andautonomy provided by a flexible work structure.

ccording to Charles Perrow, define routine and nonroutine technologies and their impact on org.

structure.

1. Routine Technologies- have a low task variety and high task analyzability; easily dealt with throughprogrammed decision making

2. Nonroutine Technologies- have a low task analyzability and a high task varietyan Woodward differentiated among three kinds of technology on the basis of the relative contributions

e by people or machines. Describe.

1. Small Batch Technology- A method used to produce small quantities of customized, one-of a kindproducts based on the skills of people who work together in groups

2. Mass-Production Technology- A method of production using automated machines programmed toperform the same operations over and over again.

3. Continuous Process Technology- A method of production involving the use of automated machinesworking in sequence and controlled through computers at a central monitoring station.


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rganic and Mechanistic Structures. Explain.

Organic Structures-An organizational structure designed to promote flexibility so that

employees can initiate change and adapt quickly to changing conditions.

Mechanistic Structure-An organizational structure designed to induce employees to behave in

predictable, accountable ways.

. Define function. Give example. Advantages/disadvantages of a Functional Structure.

Function- A group of people who perform the same types of tasks or hold similar positions in an

organization

Example- The salespeople in a car dealership belong to the sales function

Functional Structure- An organizational Structure that groups people together who hold similar

positions, perform similar sets of tasks, or use the same kinds of skills.

1. Advantagesa. Coordination Advantage- people who approach problems from the same

perspective can often make decisions more quickly and effectively than

people whose perspectives differ.

b.

Motivational Advantage- When employees are grouped together by function,supervisors are in a good position to monitor individual performance, reward

high performance, and discourage social loafing. Functional supervisors find

monitoring easy because they posses a high degree of skill in the particular

function.

2. Disadvantagesa. When the range of products or services that a company produces increases, its

various functions can experience difficulties. (Example- if a company

produced cars, clothing, and computers and used the same sales force for all

three)

b. As organizations attract customers with different needs, they may find it hardto service these needs by using a single set of functions. (Example: Individual

customers have different needs than large corporate clients)

c. Servicing the needs of different regional customers with a single set ofmanufacturing, sales, or purchasing functions becomes very difficult.

. Divisional Structures: Define. List and explain each type. Coordination and motivational

advantages/disadvantages of each.

. Product Structure- A divisional organizational structure that groups functions by types of product sothat each division contains the functions it needs to service the products it produces.

a. Coordination Advantage- It allows a company to increase its division of labor so that it can makeand sell a wider range of products.

b. Motivation Advantage- Each product division becomes responsible for the success of its specificproduct line, simplifying accountability and rewards systems.

2. Market Structure- A divisional organizational structure that groups functions by types of customers sothat each divisions contains the functions it needs to service a specific segment of the market.

a. Coordination Advantage- To suit the specific needs of each group of customers, firms grouptheir functions to match the specific type of customers needs.

b. Motivational Advantage- Each market division can specialize in, and become more efficient atmeeting the needs of each type of consumer group.


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. Geographic structure- A division organizational structure that groups functions by region so that eachdivision contains the functions it needs to service customers in a specific geographic area.

a. Coordination Advantage- Gives regional managers the flexibility they need to choose the rangeof products best suited to their customers. (Example: Fedex uses a geographic structure to

facilitate next-day shipping)b. Motivational Advantage- Allows managers the flexibility to reward and penalize employees in away that is appropriate for their region or area. (Example: School districts with disparate test

scores that vary between historically high-performing suburbs and low-performing inner cities

can take this into account when awarding teachers.)

4. Matrix Structure-An organizational structure that simultaneously groups people by function and byproduct team; very common in high-tech and biotechnology companies

a. Coordination Advantage-Product teams permit face-to-face problem solving and create a worksetting in which managers with different functional expertise can cooperate to solve non-

programmed decision-making problems.

b. Used for three reasons:i.

It needs to develop new products very rapidly.ii. It needs to maximize communication and cooperation between team members.iii. Innovation and creativity are key to the organizations continuing success.

c. Motivational Advantage- The matrix structure provides a work setting giving employeesfreedom and autonomy over their work activities. This is important because members of the

product teams are generally highly qualified and skilled employees with advanced degrees and

expertise in their fields.

d. Disadvantages-i. Matrix structures can increase role conflict and ambiguity, resulting in stress for

employees.

ii. Employees may have trouble demonstrating their personal contributions to teamperformance because they move so often from team to team.

ORDINATING FUNCTIONS AND DIVISIONS.

. Allocating Authority. Define authority, hierarchy of authority and span of control.a. Authority-The power that enables one person to hold another person accountable for his or her

actions

b. Hierarchy of Authority- An organizations chain of command that defines the relative authority ofeach level of management

c. Span of Control- The number of employees who report to a specific manager. Explain Mutual Adjustment and Integrating Mechanisms. List and Define.

a. Mutual Adjustment- The ongoing informal communication among different people andfunctions that is necessary for an organization to achieve its goals

b. Integrating Mechanisms- Organizing tools used to increase communication and coordinationamong functions and divisions


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i. Direct Contact-Managers from different functions establish face-to-face workingrelationships that allow them to solve common problems informally without having to go

through the formal channels of authority in the hierarchy.

ii. Liaison Roles-A permanent managerial position in the managers only role is tocoordinate the activities of different divisions

iii.

Teams and task forces-1. Team- a permanent group made up of representatives from two or more functionsthat meets regularly

2. Task force- a temporary, or ad-hoc, group set up to solve a specific problemiv. Cross-Functional Team- consists of people from different functions who are

permanently assigned to work full time on a team to bring a new good or service to the

market

t are the effects of IT inside organizations and between organizations? (Pages 491-493)

Inside Organizations-

In the last decade, information technology has had a dramatic effect on the way in which

organizations group and coordinate their activities. First, IT increases communication andcoordination and promotes mutual adjustment among teams, functions, and divisions. Second, IT

permits the greater decentralization of decision making because employees have instant access to

the information they need to make a decision. As a result of using IT, organizations no longer

need tall management hierarchies. They can operate with flatter structures that speed decision

making and enable the organization to act in a more flexible and organic way. Some

organizations, especially those that provide complex services and employ highly trained workers,

have gone one step further and created what has been called a virtual organization. A virtual

organization is one in which employees are linked to an organization's centralized databases by

computers, faxes, and videoconferencing and rarely see one another face-to-face, if ever. These

employees might only infrequently visit the physical premises of their companies; they receive

their assignments electronically, report back to their superiors electronically, and operate

autonomously. Almost all their employees are out in the field, working anywhere around the

globe working with clients to solve their problems. Example: IBM and Accenture pg. 492

Between Organizations-

. Many companies have found that the use of the Internet and software platforms linking

organizations together in real-time makes it easier and cheaper for them to send a specific kind of

functional activity, such as making component parts, manufacturing the final product, or even

managing the IT function itself, to other companies to perform. Companies like Black & Decker,

Sony, and Levi Strauss now contract with manufacturers abroad to produce most of their

products that are then shipped to the markets in which they will be sold. Some companies

radically alter their organizational structures by focusing only on that one specific functional

activity such as product design or research and development at which they excel and then

outsource the rest of their other functional activities to other companies. In doing so, they operate

within what is called a network structure. A Network Structure is a structural arrangement

whereby companies outsource one or more of their functional activities to other specialist

companies. Nike is used as an example in the text. Nikes products are designed in the United

States, but all of the manufacturing is done by third parties. Nike, in this sense, essentially acts as

a manager of the companies it outsources to. It conducts this management through advanced it


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solutions. Because Nike doesnt actually own any of the factories, it can scale production up and

down very rapidly without worrying about losing money through idle factories or workers.

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Chapter 16 Study Guide for Final