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Management (MGH)

Chapter 14: Organizational Structure What is Organizational Structure? Organizational Structure: The manner in which an organization divides its labour into specific tasks and achieves coordination among these tasks Vertical Division of Labour Apportioning authority for planning and decision making who gets to tell who what to do Ex. Military has 18 ranks in the chain of command (vertical), companies have manager-vp-svp-ceo, schools have principal, dean, lecturer Autonomy and Control o Domain of decision-making and authority is reduced as the number of levels in the hierarchy increase, but conversely, flatter hierarchy involves people further down in more decisions Communication o As labour is divided vertically, timely communication becomes harder to achieve (information filtering) Horizontal Division of Labour Groups basic tasks that must be performed into jobs and then into departments so that the organization can achieve its goals Job Design o Horizontal division directly affect job design (autonomy, work communication) o Also affects coordination, which in turn affects vertical division of labour Differentiation o Differentiation: The tendency for managers in separate units, functions or departments to differ in terms of goals, time spans, and interpersonal styles o Occurs when there is HIGH horizontal division of labour o Ex. Marketing team needs project now to sell, R&D team know its takes time to develop a good product- prime example Departmentation This is the assignment of jobs to departments how to group jobs so they can be managed effectively Functional Departmentation o Employees with closely related skills and responsibilities are located in the same department o Advantages include efficiency and efficient allocation of resources (research), increased communication within the department, more effective training programs, and it makes it easier to evaluate performance of groupsector o Disadvantages include differentiation due to specialization with the departments, poor coordination as an organizational whole o Most effective in small-medium sized firms
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