Textbook Notes (368,430)
Canada (161,877)
GMS 200 (566)
Chapter 8

Chapter 8 Notes.docx

8 Pages
Unlock Document

Global Management Studies
GMS 200
Ricardo Reyes

Chapter 8 – Organization Structure and Design Organizing as a Management Function • Organizing – Process if arranging people and other resources to work together to accomplish a goal • Organization Structure – System of tasks, workflows, reporting relationships, and communication channels that link together diverse individuals groups Formal Structures • Formal Structures – The structure of the organization in its official state • Organization Chart – diagram describing reporting relationships and the formal arrangement of work positions within an organization • An organization chart identifies the following aspects of formal structure: o Division of work o Supervisory relationships o Communication channels o Major subunits o Levels of management Informal Structures • Informal Structures – “Shadow” organization made up of the unofficial, but often critical, working relationships between organization members • Potential advantages: o Helping people accomplish their work o Overcoming limits of formal structure o Gaining access to interpersonal networks o Informal learning • Potential disadvantages o May work against best interests of entire organization o Susceptibility to rumour o May carry inaccurate information o May breed resistance to change o Diversion of work efforts from important objectives o Feeling of alienation by outsiders Functional Structures 1 • Functional Structures – people with similar skills and performing similar tasks are grouped together into formal work units • Members work in their functional areas of expertise • Not limited to businesses • Work well for small organizations producing few products or services • Advantages: o Economies of scale o Task assignments consistent with expertise and training o High-quality technical problem solving o In-depth training and skill development within functions o Clear career paths within functions • Disadvantages: o Difficulties in pinpointing responsibilities o Functional chimneys problem – Lack of communication, coordination, and problem solving across functions o Sense of common purpose and sense of cooperation break down o Narrow view of performance objectives o Excessive upward referral of decisions Divisional Structures • Group together people who work on the same product or process, serve similar customers, or are located in the same area of geographical region • Common in complex organizations with diverse operations Types of Divisional Structures • Product Structure – focus on a single product or service • Geographical Structure – groups together people and jobs performed in the same location • Customer Structure – focus on the same customer or clients • Process structure – focus on the same processes Advantages of divisional structures: • More flexibility in responding to environmental changes • Improved coordination • Clear points of responsibility • Expertise focused on specific customers, products, and regions 2 • Greater ease in restructuring Disadvantages of divisional structures: • Reduce economies of scale through duplication of resources and efforts across divisions • Competitions and poor coordination across divisions • Emphasis on divisional goals at expense of organizational goals Matrix Structure • Combines functional and divisional structures to gain advantages and minimize disadvantages of each • Used in: o Manufacturing o Service industries o Professional fields o Non-profit sector o Multi-national corporations • Advantages: o Better cooperation across functions o Improved decision making o Increased flexibility in restructuring o Better customer service o Better performance accountability o Improved strategic management • Disadvantages: o Two-boss system is susceptible to power struggles o Two-boss system can create task confusion and conflict in work priorities o Team meetings are time consuming o Team may develop “groupitis” – strong team loyalties that cause a loss of focus on larger organizational goals o Increased costs due to adding team leaders to structure Team structures • Team structure – extensively use permanent and temporary teams to solve problems, complete special projects, and accomplish day-to-day tasks • Often use cross-functional teams composed of members from different functional departments 3 • Project teams – convened for a specific task or project and disbanded once completed • Advantages: o Eliminates difficulties with communication and decision making o Eliminates barriers between operating departments o Improved morale o Greater sense of involvement and identification o Increased enthusiasm for work o Improved quality and speed of decision making • Disadvantages: o Conflicting loyalties among members o Excessive time spent in meetings o Effective use of time depends on quality of interpersonal relations, group dynamics, and team management Network Structures • A central core that is linked through networks of relationships with outside contractors and suppliers of essential services • Own only core components and use strategic alliances or outsourcing to provide other components • Advantages: o Firms can operate with fewer full-time employees and less complex internal systems o Reduced overhead costs and increased operating efficiency o Permits operations across great distances • Disadvantages o Control and coordination problems may arise from network complexity o Potential loss of control over outsources activities o Potential lack of loyalty among infrequently used contractors o Excess
More Less

Related notes for GMS 200

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.