BU398 Chapter Notes - Chapter 3: Decision-Making
BU398 – CHAPTER 3
ORGANIZATIONAL STRUCTURE
• Three Key Components:
• Designates formal reporting relationships, number of levels in the hierarchy, and
the span of control of managers and supervisors
• Identifies the grouping together of individuals into departments and of
departments into the total organization
• Includes the design of systems to ensure effective communication, coordination,
and integration of efforts across departments
INFORMATION-PROCESSING PERSPECTIVE ON STRUCTURE
• Vertical Communication vs. Horizontal Communication
• CENTRALIZED DECISION MAKING: Means problems and decisions are funnelled to top
levels of the hierarchy for resolution
• DECENTRALIZED DECISION MAKING: Means decision-making authority is pushed down
to to lower organizational levels
• Vertical Information Linkages
• VERTICAL LINKAGES: Used to coordinate activities between the top and bottom
of an organization, and are designed primarily for control of the organization
▪ Hierarchical Referral → If a proble arises that eployees do’t know
how to solve, it can be referred up to the next level in the hierarchy
▪ Rules and Plans → A procedure established so employees know how to
respond without communicating directly with their manager
▪ Vertical Information Systems → Include periodic reports, written
information, and computer-based communications distributed to
managers
• Horizontal Information Linkages
• HORIZONTAL LINKAGE: Refers to the amount of communication and
coordination horizontally across organizational departments
▪ Information Systems → Using cross-functional info systems
▪ Direct Contact → Creation of liaison role, which is a person located in one
department but has the responsibility for communicating and achieving
coordination with another department
▪ Task Forces → Effective horizontal linkage device for temporary issues,
reduce the load on the vertical hierarchy
▪ Full-Time Integrator → A person who is located outside the departments
and has responsibility for coordinating several departments
▪ Teams → Permanent task forces and are often used in conjunction with
full-time integrator
find more resources at oneclass.com
find more resources at oneclass.com
