COMM 292 Chapter Notes - Chapter 13: Organizational Structure, Diminishing Returns, Departmentalization

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12 Mar 2013
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COMM 292: Organizational Behaviour
Chapter 13
What Is Organizational Structure?
How job tasks are formally divided, grouped, and coordinated
There are usually flat and pyramidal organizational structures
Work Specialization:
The degree to which tasks in the organization are subdivided into separate jobs (division of
labour)
o Jobs are broken down into steps and a person specializes in one of the steps
o Increases efficiency and productivity, and encourages special inventions/innovations
o Can lead to boredom, fatigue, stress, poor quality, high turnover
Individual Responses to Work Specialization:
Generally contributes to higher employee productivity but lower job satisfaction
There diminishing marginal returns that is associated with specializing for too long in one
task
Departmentalization:
Basis on which jobs are grouped together
o Departments protect their own and do not interact with other departments
o This can lead to a narrow vision with respect to organizational goals
Functional Departmentalization:
Activities are most often grouped by the types of functions that are performed
Increased efficiency from grouping people of the same common skills together into one
unit
Product Departmentalization:
Tasks can also be departmentalized by the type of product the organization produces
o Creates an increased accountability for product performance
o All activities are related to a specific product line are under the direction of one
manager
Geographic Departmentalization:
Departmentalization can also be bases on geographic location or territory
o Can be divided regionally (B.C., Ontario, Atlantic Canada, West, etc.)
o Best when customers are in one geographic location with similar needs or wants
Process Departmentalization:
Companies organize departments based on the processing that occurs
o Ex. Finishing, inspecting, packaging, shipping, etc.
o Can be used for processing customers, as well as products
Customer Departmentalization:
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COMM 292: Organizational Behaviour
Departmentalization can be categorized on the basis of particular types of customers (target
markets)
o Specific departments can provide specialized services to different customers
Service retail, wholesale, customer service, technical support
o Customer needs can be best met through specialized departments
Organizational Variety in Departmentalization:
Large organizations change their departmentalization to reflect new needs or emphases
o Many organizations have a greater emphasis to customer departmentalization
o Rigid/functional departmentalization is being increasingly complemented by teams
that cross over traditional departmental lines
As tasks have become more complex and more diverse skills are needed to complete the
tasks, managers turn to cross-functional teams
o One step further is turning departments into separate divisions that are separate profit
centres
o Each division sets it own strategic goals and plans to accomplish them
Chain of Command:
The continuous line of authority that extends from upper organizational levels to the lowest
level and clarifies who reports to whom
o Tells employees who to go to if they have a problem and who they report to
Delegation: assignment of authority to another person to carry out specific duties, allowing
the employee to make some of the decisions
o Employees can become empowered to make decisions that were previously for
managers
Self-managed and cross-functional teams have decreased the relevance of chain-of-
command
Span of Control:
The number of employees that report to a manager
Determined by the number of employees a manager can efficiently and effectively direct
o The wider of larger the span the more efficient the organization
At some point managers manage too many employees and it becomes less
efficient
Employee performance suffers as managers have limited time to support
individuals
Narrow spans are more expensive, they make communication complex, and are sometimes
overly tight for supervision and lack employee autonomy
Individual Responses to Span of Control:
There is no research to show that there is a best type of span of control
o Each employee is different and will prefer different things compared to the next
employee
Centralization and Decentralization:
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Document Summary

How job tasks are formally divided, grouped, and coordinated. There are usually flat and pyramidal organizational structures. Increases efficiency and productivity, and encourages special inventions/innovations. Generally contributes to higher employee productivity but lower job satisfaction. There diminishing marginal returns that is associated with specializing for too long in one task. Basis on which jobs are grouped together: departments protect their own and do not interact with other departments, this can lead to a narrow vision with respect to organizational goals. Activities are most often grouped by the types of functions that are performed. Increased efficiency from grouping people of the same common skills together into one unit. Tasks can also be departmentalized by the type of product the organization produces: creates an increased accountability for product performance, all activities are related to a specific product line are under the direction of one manager.

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