ADM 2336 Lecture Notes - Lecture 21: Organizational Chart, Hierarchical Routing, Organizational Structure
Organizational Structure
Organizational Structure
Formally dictates how jobs and tasks are divided and coordinated between
individuals and groups within the company
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Organizational chart represents job in the organization and the formal reporting
relationships between those jobs
Such charts vary depending on five structural elements or dimensions
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5 dimensions of organization structure
Work specialization
Degree of organization's division of tasks
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Chain of command
Who reports to whom and formal authority relationships
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Span of control
Where decisions are formally made
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Centralization vs. decentralization
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Formalization
Standardization of behaviours and decisions in the organization
through rules and procedures
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The five dimensions of organizational structure create at least two types of
firms
Mechanistic organizations (Bureaucracy)
Effective, rigid, predictable, and standardized organizations that
thrive in stable environments
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High degree of specialization
Narrow view of tasks
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Clear line of authority
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High level of hierarchical control
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Vertical communication
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Employee encouraged to develop firm-specific knowledge within
there area of specialization
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Organic organizations
Flexible, adaptive, outward-focused organizations that thrive in
dynamic environments
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Low degree of specialization
Broader view of tasks□
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Employees think more broadly of where their responsibilities lie
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Knowledge and expertise are decentralized and individual decisions
are encouraged
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Lateral communication is encouraged
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Employee encouraged to develop knowledge and expertise outside
their specialization
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Organizational design
The process of creating, selecting, or changing the structure of an organization
depends on
Business environment
If our competitors are changing, laws that are changing, or any
factors that affect the business we need to change
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Company strategy
The structure needs to be changed our the vision/mission to ensure
both are attained
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Technology
If there are better ways of doing procedures, then organizational
restructuring might be needed
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Company size
The bigger the company, the hardest it is to restructure the
company
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Common organization forms
Simple structure
Only one level of authority that manages everyone
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Bureaucratic structures
Multi-divisional structures
Functional structure
More than one level of authority□
One leader, with many other leaders under then
CEO -> VPs -> Managers, etc.
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Product structure
Structure is based on products available□
Each level divided based on the different product lines, and
then each one has their own way of operation
Its like having many small companies inside one very
large company
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CEO -> VPs, boy toys, girl toys, etc. -> Managers, etc. □
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Geographic structure
This is most common with multi-national companies□
There is no logic of someone in the US controlling what is
happening in the UK
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There are VPs for each geographical location, who knows and
understands the location they're in
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Client-based structure
This structure tries to ensure that the clients are the #1□
They are divided into sections for each client
They have a special focus on government, and one for
consumer sales
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Matrix Structures
Employees remain members of a functional department while also
reporting to a divisional manager
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This is like a mix between some structures, it is very complicated
Functional structure□
Product structure □
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Class 21 -Mar. 29th
Thursday, March 29, 2018
14:27
Document Summary
Formally dictates how jobs and tasks are divided and coordinated between individuals and groups within the company. Organizational chart represents job in the organization and the formal reporting relationships between those jobs. Such charts vary depending on five structural elements or dimensions. Who reports to whom and formal authority relationships. Standardization of behaviours and decisions in the organization through rules and procedures. The five dimensions of organizational structure create at least two types of firms. Effective, rigid, predictable, and standardized organizations that thrive in stable environments. Employee encouraged to develop firm-specific knowledge within there area of specialization. Flexible, adaptive, outward-focused organizations that thrive in dynamic environments. Employees think more broadly of where their responsibilities lie. Knowledge and expertise are decentralized and individual decisions are encouraged. Employee encouraged to develop knowledge and expertise outside their specialization. The process of creating, selecting, or changing the structure of an organization depends on.