Management Chapter 9: Organizational Structure and Design

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What is the primary purpose of organizing in an organization?

To divide work into specific jobs and departments

What is the formal arrangement of jobs within an organization called?

Organizational Structure

What are the six key elements involved in organizational design?

Work specialization, departmentalization, chain of command, span of control, centralization-decentralization, and formalization

What is the process of grouping jobs into units called?

Departmentalization

What is the visual representation of organizational structure called?

Organizational Chart

What is the primary purpose of an organizational chart?

To visualize the formal arrangement of jobs within an organization

What is the term for the process of arranging and structuring work to accomplish an organization's goals?

Organizing

What is the primary purpose of centralization-decentralization in organizational design?

To decide how much authority to give to lower-level managers

What is the contemporary view on authority, responsibility, and unity of command in today's organizations?

More relevant

What principle states that a person should report to only one manager?

Unity of command

What type of organizational structure is depicted in the diagram, where Europe and Asia are separate units?

Regional structure

In which type of organizational structure would Prod A and Prod B be grouped together?

Product-based structure

What is the primary goal of grouping by function in an organizational structure?

To increase efficiency

What type of organizational structure is depicted in the diagram, where Sales and Mktg are grouped together?

Functional structure

What is the term for the combination of different organizational structures, such as functional and regional?

Hybrid structure

What is the main advantage of a regional organizational structure?

Better adaptation to local markets

What is the concept that a person should have one boss and report only to that person?

Unity of Command

What is the primary factor that affects the width of a manager's span of control?

Skills and abilities of the manager

What is the term for the process of increasing the decision-making authority of employees?

Employee Empowerment

What is the primary characteristic of a decentralized organization?

Decision-making authority is pushed down to lower-level managers

What is the term for the number of employees who can be effectively and efficiently supervised by a manager?

Span of Control

In a centralized organization, who typically makes the decisions?

Top managers

What is the primary reason why a manager's span of control may be narrower in a complex task environment?

The tasks require more supervision and guidance

What is the primary benefit of employee empowerment?

Improved employee motivation

What is the primary advantage of adapting organizational structure to accommodate strategic goals?

Improved achievement of strategic goals

As an organization grows in size, what tends to occur in its structure?

It becomes more mechanistic

What is a characteristic of a mechanistic organization?

High formalization

What is a characteristic of an organic organization?

Cross-hierarchical teams

What is the relationship between strategy and structure?

Structure follows strategy

What is a contingency factor that affects organizational design?

Size of the organization

Why are lower-level managers not given a say in decision-making in a centralized organization?

Lower-level managers are not capable of making decisions

When is decentralization more likely to occur?

When the environment is complex and uncertain

What is a characteristic of mechanistic organizations in terms of information flow?

Restricted flow of information

What is the primary difference between mechanistic and organic organizations?

Level of formalization

What is the impact of high formalization on employee behavior?

Employees have little discretion over what is to be done

What is the contemporary view of authority, responsibility, and unity of command?

They are less relevant in today's organizations

What is a characteristic of an organization that is decentralized?

The corporate culture is open to allowing managers to have a say in what happens

What is the result of effective implementation of company strategies in a decentralized organization?

Managers have more involvement and flexibility in decision-making

What is a characteristic of an organization that is centralized?

Decisions are relatively minor

What is the impact of low formalization on employee behavior?

Employees have more discretion over what is to be done

Study Notes

Organizational Structure and Design

  • Organizing: arranging and structuring work to accomplish an organization's goals
  • Organizational Structure: the formal arrangement of jobs within an organization
  • Organizational Chart: a visual representation of organizational structure

Organizational Design

  • Involves decisions about six key elements:
    • Work specialization
    • Departmentalization
    • Chain of command
    • Span of control
    • Centralization and decentralization
    • Formalization

Purposes of Organizing

  • Divides work to be done into specific jobs and departments
  • Assigns tasks and responsibilities associated with individual jobs
  • Coordinates diverse organizational tasks
  • Clusters jobs into units
  • Establishes relationships among individuals, groups, and departments
  • Establishes formal lines of authority
  • Allocates and deploys organizational resources

Chain of Command

  • Authority: the rights inherent in a managerial position to tell people what to do and to expect them to do it
  • Responsibility: the obligation or expectation to perform
  • Unity of Command: the concept that a person should have one boss and should report only to that person

Span of Control

  • The number of employees who can be effectively and efficiently supervised by a manager
  • Width of span is affected by:
    • Skills and abilities of the manager
    • Employee characteristics
    • Characteristics of the work being done
    • Similarity and complexity of tasks
    • Physical proximity of subordinates
    • Standardization of tasks
    • Sophistication of the organization's information system
    • Strength of the organization's culture
    • Preferred style of the manager

Centralization and Decentralization

  • Centralization: the degree to which decision making is concentrated at upper levels in the organization
  • Decentralization: organizations in which decision making is pushed down to the managers who are closest to the action
  • Employee Empowerment: increasing the decision-making authority (power) of employees

Formalization

  • The degree to which jobs within the organization are standardized and the extent to which employee behavior is guided by rules and procedures
  • Highly formalized jobs offer little discretion over what is to be done
  • Low formalization means fewer constraints on how employees do their work

Mechanistic and Organic Organizations

  • Mechanistic organizations:
    • High specialization
    • Rigid departmentalization
    • Clear chain of command
    • Narrow spans of control
    • Centralization
    • High formalization
  • Organic organizations:
    • Cross-functional teams
    • Cross-hierarchical teams
    • Free flow of information
    • Wide spans of control
    • Decentralization
    • Low formalization

This quiz covers the key elements of organizational design, including views of work specialization, chain of command, span of control, and forms of departmentalization. It also differentiates authority and delegation.

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