MAN 337 Chapter Notes - Chapter 14: Departmentalization, Decision-Making, Flat Organization

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4 Jan 2017
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Chapter 14: Foundations of Organization Structure
Organizational structure: defines how job tasks are formally divided, grouped and coordinated
o Key elements:
Work specialization (division of labor): describes the degree to which activities
in the organization are subdivided into separate jobs
Job is broken down into steps and allocated to different people (these
individuals specialize)
Traditionally, a source of efficiency and productivity, but recent studies
show that work autonomy and task variety is better
Departmentalization: the basis by which jobs are grouped together
Functional departmentalization
Product departmentalization
Geographic departmentalization
Process departmentalization (i.e. DMV)
Customer departmentalization
Chain of command: an unbroken line of authority that extends from the top to
bottom of an organization
Authority: the rights inherent in a managerial position to give orders
and expect others to obey
Unity of command: a person should have one and only one superior to
whom that person is directly responsible
Span of control: the number of employees a manager can efficiently and
effectively direct
Trending towards wider span of control
Centralization: the degree to which decision making is concentrated at a single
point in the organization (concentrated in one formal source of authority)
Decentralized: lower-level personnel’s input count a lot
o Action is taken more quickly
o Trend towards decentralization
Formalization: the degree to which jobs within the organization are
standardized
o Common organizational designs
Simple structure:
Low degree of departmentalization
Wide spans of control
Centralized authority
Little formalization
Flat organization: 2-3 vertical levels
Fast, flexible and inexpensive
Hard to use in larger organizations
Bureaucracy:
Highly routine operating tasks achieved through specialization
Very formalized rules and regulations
Tasks that are grouped into functional departments
Centralized authority
Narrow spans of control
Decision making that follows the chain of command
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