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MGHB02H3 (269)
Chapter 14

Chapter 14

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Department
Management (MGH)
Course
MGHB02H3
Professor
Julie Mc Carthy
Semester
Fall

Description
Chapter 14 Organizational Structure 1. What is organizational structure? Organizational structure: The manner in which an organization divides its labor into specific tasks and achieves coordination among these tasks. 2. The division and coordination of labor: Vertical division of labor: It is concerned with apportioning authority for planning and decision making. (Who gets to tell whom what to do?) Autonomy and control: Holding other factors constant, the domain of decision making and authority is reduced as the number of levels in the hierarchy increases. Communication: Coordination between levels. As labor is progressively divided vertically, timely communication and coordination can become harder to achieve. Horizontal division of labor: It groups the basic tasks that must be performed into jobs and then into departments so that the organization can achieve its goals. Required workflow is the main basis for this division. (Work specialization) Job design: Horizontal division of labor strongly affects job design; it has profound implications for the degree of coordination necessary; control over work processes should logically reside (implication for vertical division) Differentiation: The tendency for managers in separate units, functions, or departments to differ in terms of goals, time spans, and interpersonal styles. Under high differentiation, various organizational units tend to operate more autonomously. (Need coordination) Departmentation: (Several methods of departmentation) Functional departmentation: Employees with closely related skills and responsibilities are assigned to the same department. ----Advantage: efficiency (less duplication); communication within departments should be enhanced; career ladders and training opportunities within the function are enhanced because all parties will share the same view of career progression; easier to measure and evaluate the performance of functional specialties when they are all located in the same department. ----Disadvantage: A high degree of differentiation can occur between functional departments. (Poor coordination or slow response, open conflict) Product departmentation: Departments are formed on the basis of a particular product, product line, or service. ----Advantages: Better coordination among the functional specialists who work on a particular product line; flexibility, products line can be added or deleted without great implication for the rest of the organization; product-focused departments can be evaluated as profit centers since they have independent control over costs and revenues; product departmentation often serves the customer or client better (respond customers in a timely way). ----Disadvantage: Professional development might suffer without a critical mass of professionals working in the same place at the same time; economies of scale might be threatened and inefficiency might occur if relatively autonomous product-oriented departments are not coordinated. (Work at cross purposes) Matrix departmentation: Employees remain members of a functional department while also reporting to www.notesolution.com
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