MFGA 3309: Departmentalization Overview

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Questions and Answers

What is a key characteristic of the Product Team Design Structure?

It eliminates dual reporting relationships. (correct)

It focuses on efficient resource allocation.

It has a rigid hierarchical structure.

It promotes specialization within functional departments.

Which structural approach is most likely to be found in a large organization with diverse operations and departments?

Product Team Design Structure

Flat Structure

Tall Structure

Hybrid Structure (correct)

What is the primary function of a staff manager?

Coordinate activities across different departments to achieve organizational goals.

Make decisions independently regarding operations and resource allocation.

Directly supervise employees and resources within a specific functional area.

Provide strategic guidance to line managers based on functional expertise. (correct)

What is a key difference between a tall organization and a flat organization?

Tall organizations have a more centralized decision-making process. (B) Signup and view all the answers

Which of the following is NOT a potential drawback of a tall organizational structure?

Greater flexibility and adaptability to change. (A) Signup and view all the answers

What is the relationship between the span of control and the number of hierarchical levels in an organization?

A wider span of control generally leads to fewer hierarchical levels. (B) Signup and view all the answers

Which organizational structure emphasizes the allocation of authority based on the specific functions or activities performed?

Functional Structure (B) Signup and view all the answers

What is the primary goal of a federated hybrid structure?

Promote innovation and flexibility across various divisions. (D) Signup and view all the answers

What is the primary benefit of departmentalization in a company?

It allows for specialized training and management. (D) Signup and view all the answers

Which of the following factors does NOT contribute to difficulties in interdepartmental coordination?

Shared accountability across departments. (B) Signup and view all the answers

In a divisional structure, what is the primary focus of each business unit?

Producing a specific kind of product for a specific customer. (C) Signup and view all the answers

Which type of structure organizes a business according to different geographic regions?

Geographic Structure (C) Signup and view all the answers

When a company produces multiple products for various markets, which organizational structure is likely to be adopted?

Divisional Structure (C) Signup and view all the answers

What is one of the challenges associated with departmentalization?

Difficulties in monitoring overall performance. (B) Signup and view all the answers

Which type of departmentalization focuses on the customers served?

Customer Departmentalization (C) Signup and view all the answers

What is a key disadvantage of a divisional structure?

It leads to redundancy in resources across divisions. (A) Signup and view all the answers

What is one primary advantage of divisional management?

Enhances managers' expertise in product areas (C) Signup and view all the answers

What characterizes a global geographic structure?

Managers are located in each world region where the organization operates (D) Signup and view all the answers

What effect does a market structure have on organizational flexibility?

Allows managers to respond effectively to changing customer demands (B) Signup and view all the answers

Which structure leads to employees reporting to dual managers?

Matrix structure (B) Signup and view all the answers

What is a key feature of the global product structure?

Each division decides its manufacturing and marketing strategies (B) Signup and view all the answers

Which of the following is NOT a benefit of divisional structures?

Greater overall organizational complexity (D) Signup and view all the answers

The matrix structure is defined primarily by which of the following?

Simultaneously grouping by function and product (D) Signup and view all the answers

What is a characteristic of the global geographic structure in relation to strategy?

Aligns with a multi-domestic strategy for local responsiveness (A) Signup and view all the answers

What is the relationship between organizational ethics and organizational culture?

Organizational ethics and culture are separate but interconnected, influencing each other. (A) Signup and view all the answers

What is a potential disadvantage of decentralized authority?

Loss of control and potential pursuit of individual goals over organizational goals. (A) Signup and view all the answers

How does a flat organizational structure contribute to a culture of innovation?

By giving employees greater autonomy and control over their work, encouraging creative risk-taking. (B) Signup and view all the answers

Which of the following is NOT a source of an organization's culture?

The level of employee motivation and performance. (A) Signup and view all the answers

What is the main purpose of a minimum chain of command in an organization?

To minimize the number of levels of authority, maximizing organizational efficiency. (A) Signup and view all the answers

How can human resource policies influence an organization's culture?

By influencing how employees perceive their work environment and their commitment to the organization. (B) Signup and view all the answers

Which characteristic of organizational members is most likely to hinder an organization's ability to adapt to change?

Increased homogeneity in values and beliefs over time. (B) Signup and view all the answers

What is the primary goal of a flat, decentralized organizational structure?

To empower employees and encourage innovation and flexibility. (D) Signup and view all the answers

Study Notes

MFGA 3309: Managing Organizational Structure and Culture

The course is MFGA 3309, Managing Organizational Structure and Culture, offered at the International Islamic University Malaysia.

Departmentalization

Departmentalization is adopted by companies expanding to supply goods/services, produce varied products, and operate in multiple markets.
Forms of Departmentalization include:
- Functional (arranging by department function, e.g., marketing, finance, production).
- Product (organizing by specific products).
- Customer (grouping by customer type).
- Geographic (grouping by location).
- Process (grouping activities by process).

Pros of Departmentalization

Specialized training for departments.
Shared responsibilities within management.
Easier coordination within departments.
Streamlined supervision.

Cons of Departmentalization

Inter-departmental documentation challenges.
Decision-making delays.
Difficulty monitoring accountability and performance.

Divisional Structures

Divisional structure involves multiple business units producing specific products for particular customer segments.

Divisional Organizational Chart Example

A hierarchical structure with a CEO at the top overseeing various Vice Presidents (V.P.s) for product/service areas, each with R&D, operations, human resources, finance, and marketing heads.

Product, Market, and Geographic Structures

These diagrams visually represent different organizational structures (product, geographic, and market). They clarify how divisions, managers, and functions are categorized in companies. Specific example structures were illustrated for washing machines, lighting, and TV/stereo divisions.

Product Departmentalization

Arranging departments based on the type of products generated. Example: cosmetics, clothing, appliances under a president.

Product Structure Overview (Summary)

Product structure enhances specialization in product areas and expertise for division managers. It reduces corporate manager supervision needs and improves resource use efficiency.

Types of Divisional Structures: Geographic Structure

Divisions are categorized by geographic location and potentially further divided into regional offices globally.
Global Geographic structure means locating divisional offices worldwide.
Multi-domestic strategy use cases often feature this structure.

Geographic Departmentalization

Division based on geographical location, example: Central, Northeast, Southwest under a president.

Global Product Structure

Each product division has responsibility for global manufacturing and marketing decisions.

Global Geographic and Product Structures Diagrams

Illustrative organizational charts (diagrammatic representations of reporting relationships). They detail how global geographic and product structures are organized.

Market Structure

Divisions grouped by specific customer types (e.g., large businesses, small businesses, educational institutions).
This structure allows managers to react quickly to customer needs.

Matrix Design Structure

An organizational structure that groups people and resources based on both function and product simultaneously. This structure is highly flexible, allowing rapid adaptation to changing needs. Each employee reports to two managers, potentially a functional manager and a product manager.

Product Team Structure

A cross-functional team of managers from different departments focuses on a particular product. The structure eliminates dual reporting and empowers teams for new or redesigned product development.

Hybrid Structures

Found in large organizations, hybrid structures use multiple organizational structures simultaneously. Example presented was Federated's structure with corporations.

Coordinating Functions: Allocating Authority

Authority: The manager's power to make decisions and utilize resources based on their organizational position.
Hierarchy of Authority: The organization's chain of command detailing authority levels for each manager.
- Span of Control: The number of direct reports (subordinates) for each manager.
Line Managers: Those in the organizational chain who have formal authority over people and resources.
Staff Managers: Functional area specialists who provide guidance to line managers.

Tall and Flat Organizations

Tall Organizations: Many levels of authority, narrow spans of control; communication difficulties and expense.
Flat Organizations: Fewer authority levels, wide spans of control; faster communication, but potentially overworked managers.

Minimum Chain of Command

Top managers should create the hierarchy with the least needed levels of authority, effectively using organizational resources.

Centralization and Decentralization of Authority

Centralization: Top managers retain decision-making authority. Results in stability and predictability but less employee input.
Decentralization: Lower-level managers/employees make decisions. Fosters flexibility but may lead to conflicting goals and communication difficulties.

Integrating Mechanisms

Mechanisms that are used for coordination: direct contact, liaison roles, task forces, cross-functional teams, integrating roles. The examples illustrate how teams with different functions may come together for a common goal within a larger company.

Organizational Culture

A shared set of beliefs, expectations, values, and norms that shape how members interact and achieve organizational goals.

Sources of Organizational Culture

Organizational culture emerges from many sources including organizational ethics, organizational structure, the employment relationship, and its members' characteristics.

Characteristics of Organizational Members

Members' characteristics (values and norms) over time can become similar to a degree. This has the potential to hinder the ability to adapt to change and the environment.

Organizational Ethics

Moral values, beliefs, and rules for the appropriate conduct of the company/its people among themselves and externally.

Employment Relationship

HR policies affect how much employees are invested and influenced in organizational goals.

Organizational Structure

In a centralized organization, people have little autonomy; norms of cautiousness, obedience, and traditions prevail. Stability and predictability are key factors.
In a flat, decentralized structure, people have more freedom; creative and courageous norms; innovations and adaptability are desired goals.

Strong, Adaptive Cultures Versus Weak, Inert Cultures

Adaptive Cultures: Values/norms help the organization build momentum, grow and change effectively in pursuit of goals.
Inert Cultures: Values/norms fail to motivate people, hence can lead to organizational stagnation and failure over time.

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Description

Explore the various forms and implications of departmentalization in organizations. This quiz covers the pros and cons of different departmental structures, such as functional, product, customer, geographic, and process-based arrangements. Gain insights into how these divisions impact management and coordination.