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Lecture 12

GMS 200 Lecture 12: Chapter 8 - Organization Structures & Designs

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Ryerson University
Global Management Studies
GMS 200
Ado Abdoulkadre

Chapter Eight – Organization Structures & Designs Organizing as a Management Function: - Organizing = the process of arranging people and other resources to work together to accomplish a goal - Organization Structure = the system of tasks, workflows, reporting relationships, and communication channels that link together diverse individuals and groups - Formal Structures = structure of the organization in its official state ➢ Organization Chart = a diagram describing reporting relationships and the formal arrangement of work positions within an organization ▪ The organization chart identifies the following aspects of formal structure: ➢ Division of Work = positions and titles show work responsibilities ➢ Supervisory Relationships = lines show who reports to whom ➢ Communication Channels = lines show formal communication flows ➢ Major Subunits = positions reporting to a common manager are shown ➢ Levels of Management = vertical layers of management are shown - Informal Structures = a shadow organization made up of the unofficial, but critical working relationships between organization members; shows whom the individual interacts with regularly, regardless of formal title/relationship ➢ Pros: helping people accomplish their work; overcoming the limits of formal structures; allowing people to gain access to interpersonal networks that satisfy needs for social interaction; informal learning that takes place as people interact informally throughout the workday ➢ Cons: may work against the best interests of the entire organizations; susceptibility to rumours; inaccurate information; resistance to change; diversion of work efforts from important objectives; feelings of alienation by people who are left out of informal groupings Traditional Organization Structures: - Departmentalization = grouping together people and jobs intro work units that are linked together in a coordinated way - Functional Structures = people with similar skills and who perform similar tasks are grouped together into formal work units ▪ Pros: economies to scale with the efficient use of resources; task assignments are consistent with expertise and training; high-quality technical problem solving ▪ Cons: functional chimney problems; difficulty pinpointing responsibilities; narrow view of performance objectives; excessive upward referral of decisions rather than by people within the same level ➢ Functional Chimney Problem = lack of communication/coordination/problem solving across functional units - Divisional Structures = groups people together working on the same product in the same area with the same customers/processes ▪ Pros: more flexibility and clear points of responsibility; expertise focused on specific customers, products, and regions; greater ease in restructuring ▪ Cons: duplication of resources and efforts across divisions; competition and poor coordination across divisions; emphasis on divisional goals at the expense of organizational goals - Matrix Structure = combines functional and divisional structures to gain advantages and minimize disadvantages of each ▪
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