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Lecture 3

MHR 505 Lecture Notes - Lecture 3: Hierarchical Organization, Work Unit, Organizational Learning

Human Resources
Course Code
MHR 505
Jonathan Hughes

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Chapter 13- Designing organizational structures
Organizational structure: the division of labour as well as the patterns of coordination,
communication, workflow and formal power that direct organizational activities
-It establishes new communication patterns and aligns employee behaviour with the
corporate vision
-Encompasses job design, information flow, work standards and reporting relationships
Division of labour and coordination
Division labour
-Refers to the subdivision of work into separate jobs assigned to different people
-Subdivided work leads to job specialization because there is a narrow set of tasks
necessary to complete
-Companies divide work into several jobs because job specialization increases work
efficiency; training costs reduced, work cycles are shorter, less time is wasted from
moving job to job
Coordinating work activities
-An organization’s ability to divide work among people depends on how well those
people can coordinate with each other; otherwise individual work effort is wasted due to
misalignment, duplication and mistiming of tasks
A) Coordination through informal communication
-Vital in non routine and ambiguous situations because employees need to exchange a
larger volume of information thru face to face communication and other media rich
-Liason roles = people who communicate and share info with coworkers in other units
-Integrator roles = people who are responsible for coordinating a work process by
encouraging employees in each work unit to share info and informally coordinate work
activities (rely on persuasion and commitment)
-Temporary cross functional teams give employees more authority and opportunity to
coordinate through informal communication
B) Coordination through formal hierarchy
-Assigns legit power to individuals, who use this power to direct work processes and
allocate resources (work is through chain of command)
-Communicating through the chain of command is rarely as fast or accurate as direct
communication between employees
-Managers are only able to closely supervise only a limited number of employees
-Formal hierarchy coordination processes tend to limit employee autonomy and
C) Coordination through standardization
-Involves creating routine patterns of behaviour or output
Standardized processes: When the task is routine or simple. Less effective in

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non routine and complex work
Standardized outputs: ensuring that individuals and work units have clearly
defined goals and output measures
Standardized skills: extensively training employees or hiring people who have
learned precise role behaviours from educational programs
Elements of organizational structure
Span of control – Wide or narrow span
-The number of people directly reporting to the next level in the hierarchy
-Should have a certain amount of employees per supervisor, as supervisors can
only oversee a certain amount of people
-Good to employ people who coordinate their work mainly thru standardized
skills; these people can run things themselves
-A wider span of control is possible when employees perform routine jobs
because they require less direction or advice from supervisors
-A narrow span of control is necessary when employees perform hard tasks
because they require more supervisory decisions and coaching
-Depends on interdependence among employees within the team; narrow span is
best where employees perform highly interdependent work with others (more
supervision as there’s chance for beef)
-Also cause employees are less clear on their personal work performance ^^
A) Tall vs flat structures
-Building a taller hierarchy *more layers of management* creates problems;
executives in tall structures tend to receive lower quality and less timely info.
why? People distort info, filter it, simplify info because they want to portray it in
a good light
-Tall structures have higher overhead costs; less people actually making the
product or providing the services as there are more people running the company
-Employees usually feel less empowered and engaged in their work; more levels
of hierarchy draw away power from people at the bottom of that hierarchy
Centralization and decentralization
-Centralization: the degree to which formal decision making authority is held by a
small group of people, typically those at the top of the organizational hierarchy
-Decentralize: disperse authority and power throughout the organization
-Some areas can be centralized yet decentralized as well; logistics and inventory
can be decentralized cause store managers know what they need best on a Friday
-The degree to which organizations standardize behaviour through rules,
procedures, formal training and related mechanisms
-Companies become more formalized as they increasingly rely on various forms
of standardization to coordinate work
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