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Lecture 11

MSCI211 Lecture Notes - Lecture 11: Departmentalization, Management Consulting, Flat Organization

Management Sciences
Course Code
Shahed Alam

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Module 11 global: Environment, Strategy, and Structure (Part 1)
Commentary for Module 11
Consider the following:
1. Why organizations operating in more uncertain environments require more
organic structures.
2. What are the relative merits of mechanistic vs organic structures?
A mechanistic structure is characterized by high specializing, rigid
departmentalization, clear chain of command, narrow spans of control,
centralization and high formalization. It is less costly since standardized
operations and high formalization allow decision making to be centralized.
There is little need for innovative and experience decision makers. This
structure is suitable for organizations with standardized activities in a highly
efficient manner, such as government offices, enforce health regulations,
local fire departments, etc. In contrast, an organic structure is consisted of
cross-functional team, cross-hierarchical team, free flow of information, wide
spans of control, decentralization and low formalization. It seeks to eliminate
the chain of command, have limitless spans of control, and replace
departments with empowered teams. The textbook lists an example of BMW
Group where the automaker uses virtual tools such as computer-aided
design and simulation models and a flexible global production network to
respond quickly to fluctuations in the market and individual customer
Organizations operating in more uncertain environments require more
organic structures because there are barely any standards. Within an
uncertain environment, it is beneficial to encourage all employers to
contribute their innovations and ideas regardless to their levels. Such an
organization may want to create an environment of learning and
experimentations and eliminate the vertical and horizontal boundaries
among the works to speed the innovation and problem solving. By removing
vertical boundaries, mangers should step back and leave more decision
making to the people closest to the actions. By removing horizontal
boundaries, workers should have more chances to try different types of work
across departments and gain new skills. An organic structure may be
powered by wide span of control, decentralization and flow of information
such allowing an organization in a more uncertain environment to have more
room to grow.
An organizational structure defines how job tasks are formally divided, grouped,
and coordinated.
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