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Organizational Structures
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Organizational Structures
Todays companies, more team
orientated.
Organizational Structures,
becoming more important.
Defines how job tasks are
coordinated.
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Organizational Structures
Many different physical layouts.
Could be very tall, or very flat.
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Organizational Structures
Could be anywhere in-between
those extremes.
Flat Structure Team orientated.
Open atmosphere.
Problems solved quickly.
More interaction between different
hierarchical levels.
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Organizational Structures
Tall Structure More levels of organization
Limited interaction.
More personal responsibility.
If you have a problem, you would talk to
your manager, who would talk to their
manager, etc.
Often, the message that you told toyour manager, is different from the one
they portray to their manager
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Organizational Structures
When deciding which
organizational structure is best for
their company managers need to
address six key elements: Work Specialization
Departmentalization
Chain of command
Span of control
Centralization and decentralization
Formalization
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Six Key Questions
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Six Key Elements
1. Work Specializat ionor Divisionof Labor:
The degree to which tasks in the
organization are subdivided into separate
jobs Ex. Henry Ford, assembly line
Individuals specialize in doing part of an
activity, rather than the whole thing
May lead to boredom, fatigue, stress andincreased absenteeism
Raises employee productivity and
efficiency, but lowers job satisfaction
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Six Key Elements
2. Departmental izat ion: The basis on which jobs are grouped
together
Creates competitiveness betweendepartments
Narrow vision with respect toorganizational goals
5 different kinds of departmentalization: Functional
Product
Geographic
Process
Customer
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Six Key Elements:Types of Departmentalization
A) Functional Functional Departmentalization groups
activities by functions performed.
More efficient to put together people with
common skills and orientation into a
common unit.
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Six Key Elements:Types of Departmentalization
B) Product: Grouping your organization
depending on the type of product
created is productdepartmentalization.
Increases accountability for product
performance.
Also works with services.
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Six Key Elements:Types of Departmentalization
C) Geographic: Departmentalized on the basis of geography,
or territory.
Ex. International companies having differentdepartments for each country.
D) Process: Organizes departments by the processing
that occurs.
Ex. inspecting, packing, shipping
E) Customer: Departmentalize by the type of customer the
organization seeks to reach.
Ex. Corporate or individual customers.
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Six Key Elements
3. Chain of Command: Unbroken line of authority that extends form
the top of the organization to the bottom.
Designates where you go if you have a
problem.
Becoming less structured than it was in the
past.
4. Span of Control: The number of employees a manager can
efficiently and effectively direct.
Generally determines the number of levels
an organization has.
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Six Key Elements
5. Centralization andDecentralization:
Decentralization: The decision discretion is pushed down to
lower-level employees.
Take action quicker.
More people provide input into decisions.
Easier to address customer concerns.
Centralization: The degree to which decision making is
concentrated at a single point in theorganization.
Top management makes all the decisions.
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Six Key Elements
6. Formalization The degree to which jobs within the
organization are standardized.
Low Formalization:
Job behaviours are relatively non-programmed.
Lots of employee freedom.
Less standardization.
High Formalization:
Explicit job description.
Lots or organizational rules.
Clearly defined procedures for work
processes.
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Two Models of
Organizations
Mechanistic Model: A structure characterized by extensive
departmentalization, high formalization,a limited information network and
centralization.
Organic Model: A structure that is flat, uses cross
hierarchical and cross-functional teams,
has low formalization, possesses acomprehensive information network,and relies on group decision making.
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Mechanistic vs. Organic Models
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Two Models of Organizations
Which model is chosen depends on
the members of the organizations
experience, personality, the work
task and their cultural background.Mechanistic:
People with a high degree of bureaucratic
orientation
Organic: People with a low degree of bureaucratic
orientation