GMS 200 Lecture Notes - Lecture 9: Impermanence, Strategic Management, Political Boss
2 Jul 2018
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Chapter 8: Organization Structures and Design
Organizing as a Management Function
●Organizing: the process of arranging people and resources to work toward a goal.
●Organization structure: a system of tasks, reporting relationships, and communication
linkages.
Formal Structures
● The official structure of the organization
●Organization chart: describes the arrangement of work positions within an organization
(job titles, line of authority, and communication between them).
● Basics of an organization's 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 flow)
○Major Subunits (positions reporting to a common manager are shown)
○Levels of Management (vertical layers of management are shown)
Informal Structures
● The set of unofficial relationships among an organization's members.
●Social network analysis: identifies the informal structures and their embedded social
relationships that are active in an organization.
○ Asks people to identify others whom they communicate regularly, whom they turn
to for help most often, and who energizes or de-energizes them.
○ Used to redesign the formal structure for better performance, and it legitimizes
the informal networks people use in their daily work.
Functional Structures
● Groups together people with similar skills who perform similar in formal work units.
●Departmentalization: the process of grouping people and jobs into work units.
Advantages:
● Economies of scale with efficient use of resources.
● Task assignments consistent with expertise and training.
● High-quality technical problem solving.
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● In-depth training and skill development within functions.
● Clear career paths within functions.
Disadvantages:
● Difficulties in pinpointing responsibilities (cost containment, product quality, etc).
●Functional Chimneys Problem: a lack of communication, coordination, and problem
solving across functions.
● Because functions become more formalized (organization chart and in mindsets),
peoples cooperation can break down.
● The sense of common purpose gets lost to self-centred and narrow-minded viewpoints.
Divisional Structures
● Groups together people working on the same product or process, serve similar
customers, or are located in the same area or geographical region.
●Product Structures
○ Groups together people and jobs focused on a single product or service.
○ Clearly identify costs, profits, problems, and successes in a market area with a
central point of accountability.
●Geographical Structures
○ Groups together people and jobs performed in the same location.
○ Typically used when there is a need to differentiate products/services in various
locations, such as different parts of a country.
○ Common in international operations - help to focus attention on the unique
cultures and requirements of particular regions.
●Customer Structures
○ Groups together people and jobs that serve the same customers/clients.
○ Goal: best serve the special needs of different customer groups.
●Process Structures
○ Groups jobs and activities that are part of the same process.
○Work process: a group of related tasks that collectively creates something of
value to customers.
Advantages:
● More flexibility in responding to environmental changes.
find more resources at oneclass.com
find more resources at oneclass.com
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Document Summary
Organizing: the process of arranging people and resources to work toward a goal. Organization structure: a system of tasks, reporting relationships, and communication linkages. Organization chart: describes the arrangement of work positions within an organization (job titles, line of authority, and communication between them). Division of work (positions and titles show work responsibilities) Supervisory relationships (lines show who reports to whom) Communication channels (lines show formal communication flow) Major subunits (positions reporting to a common manager are shown) Levels of management (vertical layers of management are shown) The set of unofficial relationships among an organization"s members. Social network analysis: identifies the informal structures and their embedded social relationships that are active in an organization. Asks people to identify others whom they communicate regularly, whom they turn to for help most often, and who energizes or de-energizes them. Used to redesign the formal structure for better performance, and it legitimizes the informal networks people use in their daily work.
