Ch.3 - Fundamentals of Organizational Structure

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3 Apr 2012
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Chapter 3: Fundamentals of Organization Structure
Organization Structure
- Definition: three key components
oThey designate from formal reporting relationships, including the
number of levels in the hierarchy and the span of control of
managers/supervisors (framework)
oIdentifies grouping of individuals into departments and of departments
into the total organization (framework)
oIncludes the design of systems to ensure effective communication,
coordination, and integration of efforts across departments
(interactions)
Information-Processing Perspective on Structure
- Organizational Design to Efficiency vs. Learning Outcomes
oVertical: Emphasis on efficiency and control is associated with
specialized tasks, hierarchy of authority, rules and regulations, formal
reporting systems, few teams/task forces and centralized decision
making (problems and decisions are funneled to top levels)
oHorizontal: Emphasis on learning outcomes are associated with shared
tasks, relaxed hierarchy, few rules, face-to-face communication, many
teams and informal decentralized decision making
- Vertical information linkages
oLinkage: extent of communication and coordination among
organizational elements
oVertical Linkages: used to coordinate activities between top and bottom
of an organization, primarily for control
Lower levels carry out activities consistent with top-level goals
and top executives are informed of activities and
accomplishments of lower level
oStructural devises to accomplish vertical linkages:
Hierarchical Referral
Chain of command, problems are referred to the next level
in the hierarchy, when solved its sent back down
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Chapter 3: Fundamentals of Organization Structure
Lines in the chart are communication channels
Rules and Plans
Repetitious problems and decisions; rules and procedures
are established so employees know what to do without
communication directly with managers
Rules and plans give standard information source (e.g.
budget)
Vertical Information Systems
E.g. periodic reports, written information, computer-based
communications distributed to managers
- Horizontal information linkages
oOvercomes barriers between departments and helps coordinate among
employees to achieve unity of effort and objectives
oDefined: amount of communication and coordination horizontally across
organizational departments (often not drawn in organizational charts)
exchange information
oDevices to accomplish horizontal linkages
Information Systems (weakest linkage, lowest cost in time and
HR)
Computerized information systems to help solve problems,
opportunities, etc
Use to build relationships across the organization to
enhance coordination across projects and geographical
locations
Direct Contact
Higher level of horizontal linkage; directly contract those
affected by a problem
Liaison role: located in one department but responsible for
communicating and achieving coordination with another
department (usually only two departments such as
engineering and manufacturing)
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Chapter 3: Fundamentals of Organization Structure
Locate people close together so they will have direct
contact
Task Forces
When linkage involve several departments
Defined: temporary committee composed of
representatives from each organizational unit affected by a
problem
Each member represents the interest of a department or
division and carries information from meeting back to the
department
The find overlap and ways to share parts and cut
time/costs
Full-time Integrator
Often carries title of “product manager, project manager,
program manager, brand manager”
They do not report to one of the functional departments
being coordinated, they are located outside the
departments has coordinate several departments
Have no formal authority (fires, hires, pay raise) as those
still stay with functional departments
They need good people skills, expertise and persuasion.
Must span between departments and get people together,
maintain trust, confront problems, resolve conflicts and
disputes.
Teams (strongest linkage mechanism, highest cost in time and
HR)
Defined: permanent task forces and often used in
conjunction with full-time integrator
When strong coordination and long period of time are in
need, teams work best
Virtual teams: made up of organizationally or
geographically dispersed members who are linked
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