15 Aug 2016
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Ch. 13 – Organizational Structure
- org structure determines what gets done in an org & who does it
- org structure = defines how job tasks formally divided, grouped & coordinated
- 6 key elements
1) work specialization = division of labour = degree to which tasks subdivided into separate jobs
indivs specialize in doing part of an activity rather than whole
v efficient, improve thru repetition
easier & less costly for org for find & train employees to do specific & repetitive tasks
↑ efficiency & productivity by encouraging creation of special inventions & machinery
can lead to boredom, fatigue, stress, low productivity, poor quality, increased
absenteeism, high turnover
2) departmentalization = basis on which jobs grouped together
but can become silos w/in org
often, departments start protecting own turn & not interact well w/ other departments
can lead to narrow vision w/ respect to org goals
functional departmentalization = grouped by functions performed
i.e. engineering, accounting, manufacturing, etc
major advantage: obtaining efficiencies from putting ppl w/ common skills &
orientations together into common units
product departmentalization = type of product org produces
major advantage: increased accountability for product performance, since
everything under direction of single exec
geographical departmentalization = basis of geography/territory
valuable if org’s customer scattered over large geographical area & have similar
needs based on location
customer departmentalization = basis of particular type of customer org seeks to reach
i.e. consumers, suppliers, etc
3) chain of command = continuous line of authority that extends from upper org levels to lowest
level & clarifies who reports to whom
unity of command = person should have only 1 superior to whom he/she is responsible
if broken, employee may have to cope w/ conflicting demands/priorities from
several superiors
delegation = assignment of authority to another person to carry out specific duties,
allowing employee to make some decisions
4) span of control = # of employees who report to manager
adv of wide span
reduce costs, cut overhead
speed up decision making
increase flexibility
get closer to customers
empower employees
but if supervisor no longer has time to provide necessary leadership & support, wider
span reduces effectiveness & has negative effect on employee performance
to ensure performance doesn’t suffer b/c of wider span, orgs invest in employee training
adv of narrow span
manager can maintain close control
disadv of narrow
expensive b/c add levels of management
make vertical communication in org more complex
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