Final Exam notes Chapter 14.docx

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University of Toronto Scarborough
Management (MGH)
Anna Nagy

Organizational Structure Work Specialization/division of labor  Organizational Structure – the manner in which an organization divides its labor in to specific tasks and achieves coordination among these tasks. Divide labor among members and Coordinate what has been divided  Vertical Division of Labor – concerned primarily with apportioning authority for planning and decision making o Autonomy and Control – holding other factors constant, the domain of decision making and authority is reduced as the number of levels in the hierarchy increases. A flatter hierarchy pushes authority lower and involves people further down the hierarchy in more decisions o Communication – as labor is progressively divided vertically, timely communication and coordination can become harder to achieve. As the number of levels in the hierarchy increases, filtering is more likely to occur.  Horizontal Division of Labor – groups the basic tasks that must be performed into jobs and then into departments so that the organization can achieve its goals. Required workflow is the main basis for this division o Job Design – horizontal division of labor is closely tied to consideration of job design  Department where all workers do ABC work – enriched jobs with reduced supervision and allows for self-managed teams but needs highly trained workers; horizontal division strongly affects job design  Department with workers specializing in A, B or C work – involves increased horizontal division of labor in which employees specialize in work and coordination is critical but can be handled by properly designing the head of each job; profound implications for degree of coordination necessary  Separate A, B and C Departments - greatest horizontal division of work, great control and accountability for separate tasks but someone above the department heads should supervise; also has implications for vertical division of labor and where control over work processes should logically reside o Differentiation – the tendency for managers in separate units, functions, or departments to differ in terms of goals, time spans and interpersonal styles Departmentation – the assignment of jobs to departments o Functional Departmentation – employees with closely related skills and responsibilities are assigned to the same department. Employees are grouped according to the kind of resources they contribute to achieving the overall goals of the organization  Advantages: Main one is efficiency  Communication within departments should be enhanced  Career leaders and training opportunities within the function are enhanced because all parties will share the same view of career progression  The performance of functional specialists should be easier to measure and evaluate when they are all located in the same department  Disadvantages: stem from specialization within departments – leads to high degree of differentiation; lead to poor coordination and slow response to organizational problems, lead to open conflict between departments o Product Departmentation – departments are formed on the basis of a particular product, product line or service. Each can operate fairly autonomously because it has its own set of functional specialists dedicated to the output of the department  Advantages  Better coordination among the functional specialists which leads to fewer barriers for communication  Flexibility since product lines can be added or deleted without great implications for the rest of the organization  Evaluated as profit centers since they have independent control over costs and revenues  Often serves the customer or client better since client can see more easily who produced the product  Disadvantages  Professional development might suffer without a critical mass of professional working in the same place or the same time  Economies of scale may be threatened and inefficiency might occur if relatively autonomous product-oriented departments are not coordinated  Might not actually work at cross purposes o Matrix Departmentation – employees remain members of a functional department while also reporting to a product or project manager. Most variations boil down to what gets crossed with functional areas to form the matrix and the degree of stability of the matrix relationships. Matrix could be based on short-term projects  Advantages  Provides a degree of balance between the abstract demands of the product or project and the people who actually do the work, resulting in a better outcome  Flexible  Being focused on a particular product or project can also lead to better communications among the representatives from the various functional areas  Disadvantages  No guarantee that product or project managers will see eye-to-eye with various functional managers – can create conflict that reduces
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