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Chapter 8: Organization Structures and Design
ORGANIZATION AS A MANAGEMENT FUNCTION
Organizing: arranges people and resources to work toward a goal
What is Organization Structure:
Organization structure: is a system of tasks, reporting relationships and communication linkages
•Structure should:
-allocate tasks through division of labour
-provide for the coordination of performance results
Formal Structures:
Organization Chart: describes the arrangement of work positions within an org.
• identifies various positions and job titles, lines of authority and comm. between them
Formal structure: is the official structure of the org.
Learn the basics of an org.'s formal structure:
• Division of work
• Supervisory relationships
• Communication channels
• Major subunits
• Levels of management
Informal Structures:
Informal structure: is the set of unofficial relationships among an org.s members
• shows who talks to who, regardless of titles and relationships
Social Network Analysis: identifies the informal structures and their embedded social relationships that are active in an
org.
• draw with lines running from person to person according to the frequency and type of relationship maintained
ADV:
•during times of change
•out of date formal structures may fail to provide the support people need to deal with new or unusual situations‐ ‐
•allow people to make contacts with others who can help them get things done
•sources of emotional support and friendship that satisfy important social needs
DISADV.
•susceptible to rumor
•carry inaccurate info.
•breed resistance to change
•divert work efforts from important objectives
TRADITIONAL ORGANIZATION STRUCTURES
Departmentalization: is the process of grouping people and jobs into work units
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• Economies of scale with efficient use of resources.
• Task assignments consistent with expertise and training.
• High quality technical problem solving.‐
• In depth training and skill development within functions.‐
• Clear career paths within functions
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3 types of org.al structures
1. Functional Structures: groups people together with similar skills who perform similar tasks
ADV.
DISADV.
• difficulties in pinpointing responsibilities for things like cost containment, product or service quality, and innovation
Functional Chimneys Problem: is a lack of communication and coordination across functions
•sense of common purpose gets lost to self centered and narrow viewpoints‐
•slows decision making ‐
•harm organizational performance
2. Divisional Structures
Divisional Structures: groups together people working on the same products, in the same area, with similar customers or
on the same processes
Product Structures: groups people and jobs together focused on a single product or service
Geographical Structures: groups people and jobs together performed in same location
Customer Structures: groups people and jobs together that serve the same customer or clients
Process Structures:
Work Process: is a group of related tasks that collectively creates a valuable work product
Process Structure: groups jobs and activities together that are part of the same processes
ADV.
• More flexibility in responding to environmental changes.
• Improved coordination across functional departments.
• Clear points of responsibility for product or service delivery.
• Expertise focused on specific customers, products, and regions.
• Greater ease in changing size by adding or closing down divisions.
DISADV.
•reduce economies of scale and increase costs through the duplication of resources and efforts across divisions
•unhealthy rivalries as divisions compete for resources and top management attention, and emphasize division needs to
the detriment of the goals of the org. as a whole
3. Matrix Structure:
Matrix Structure: combines the functional and divisional approaches to emphasize project or program teams
ADV.
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