MGMT1001 Chapter Notes - Chapter 8: Organizational Culture, Common Purpose, Formal System
Chapter 8 Textbook Notes MGMT1001
Kinicki, et al. 2017, Management, A Practical Introduction, 2nd edn, McGraw-Hill Australia,
Sydney.
Organisational Culture Structure and Design
• Organisational culture (corporate culture) is system of shared beliefs and values
developed within an organisation guiding behaviour of its members - 'social glue'
• Organisational structure is formal system of task and reporting relationships that
coordinate and motivate an organisation's members so that they can work together to
achieve the organisation's goals.
• Symbol is an object, act, quality or event that conveys meaning to others
• Rites and rituals are activities and ceremonies, planned and unplanned, that celebrate
important occasions and accomplishments in organisation's life
• Barnard's classic definition: an organisation is a system of consciously coordinated
activities or forces of two or more people
• Organisation chart represents structure of an organisation with box-and-lines illustration
showing formal lines of authority and organisation's official positions or work
specialisation
o Vertical hierarchy of authority: who reports to whom
o Horizontal specialisation: who specialises in what work
• Schein proposed four common elements
o Common purpose: unifying members
o Coordinated effort: working for common purpose
o Division of labour: work specialisation for greater efficiency through having discrete
parts of a task done by different people
o Hierarchy of authority: the chain of command is the control mechanism for making
sure the right people do the right things at the right time
• Centralised authority: important decisions are made by higher-level managers
o Advantage is there is less duplication of work because fewer employees perform the
same task, rather, the task performed by a department of specialists. Also
procedures are uniform thus easier to control
• Decentralised authority: important decisions are made by middle-level and supervisory
level managers
• Simple structure has authority centralised in a single person, a flat hierarchy, few rules
and low work specialisation
• Functional structure is people with similar occupational specialties put together in formal
groups
• Divisional structure is diverse occupational specialties are put together in formal groups
by similar product or services, customer or client, or geographic regions
o Product divisions are group activities around similar products of services
o Customer divisions tend to group activities around common customers or clients
o Geographic divisions defined by regional locations
• Matrix structure: a grid of functional and divisional chains of command
• Horizontal design: teams or workgroups either temp or permanent are used to improve
collaboration and work on shared tasks by breaking down internal boundaries
• Virtual organisation has all geographically apart, usually only on email, collaborative
computing and other computer connections allows form of boundary-less structure
known as the virtual structure - company outside a company
• Mechanistic organisation has authority centralised, tasks and rules clearly specific and
employees are closely supervised
• Organic organisation is authority decentralised, fewer rules and procedures and networks
of employees asked to respond quickly to unexpected tasks
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