Organisational Structure and Design

Questions and Answers

What is the primary goal of organizing, as described in the text?

To establish a clear chain of command.

To establish clear authority and responsibility for each task.

To ensure the smooth operation of all departments.

To arrange and structure work for achieving organizational goals. (correct)

What is the defining characteristic of 'organizational structure' as described in the text?

The hierarchy of authority within an organization.

The division of labor within an organization.

The relationships between departments within an organization.

The formal arrangement of jobs within an organization. (correct)

How does Eli Lilly & Company's decision to revamp its operational structure demonstrate the concept of organizational design?

It emphasizes the need for clear departmentalization.

It highlights the importance of a strong chain of command.

It shows how structure can be adjusted to meet new challenges and opportunities. (correct)

It illustrates the importance of authority and responsibility.

What does the example of Eli Lilly & Company suggest about the importance of organizational design in addressing challenges?

A flexible structure is crucial for adapting to changes in the market. Signup and view all the answers

Which principle is directly related to the idea that each employee should report to only one supervisor?

Unity of command Signup and view all the answers

Which organizational design element focuses on grouping similar tasks or activities together?

Departmentalization Signup and view all the answers

Which concept defines the formal lines of authority within an organization, establishing who reports to whom?

Chain of command Signup and view all the answers

What does the term 'authority and responsibility' refer to in the context of organizational design?

The power to make decisions and the obligation to achieve goals. Signup and view all the answers

Which of the following best describes departmentalisation in an organisational structure?

The grouping of jobs based on similarities in functions. Signup and view all the answers

What is the primary focus of the chain of command in an organization?

The flow of authority and responsibility across the organization. Signup and view all the answers

In an organisational hierarchy, what is meant by authority?

The right to make decisions and enforce rules. Signup and view all the answers

What does the concept of unity of command refer to in a workplace?

The necessity for employees to report to only one manager. Signup and view all the answers

Which of the following is NOT a key element of organisational design?

Innovation Signup and view all the answers

What are the potential negative effects of overspecialisation in a work environment?

Boredom, fatigue, and increased turnover. Signup and view all the answers

What is the primary function of the chain of command in an organization?

To clarify who reports to whom and maintain authority Signup and view all the answers

Which aspect of the organisational structure does span of control refer to?

The number of employees supervised by a manager. Signup and view all the answers

Which term refers to the rights associated with a managerial position?

Authority Signup and view all the answers

How does decentralisation typically affect decision-making within an organization?

It allows for quicker, localized decision-making. Signup and view all the answers

Unity of command is important because it helps to:

Prevent confusion regarding reporting relationships Signup and view all the answers

Which form of departmentalization focuses on the specific functions of the organization?

Functional departmentalization Signup and view all the answers

In an organizational hierarchy, the chain of command primarily helps in:

Maintaining a clear reporting structure Signup and view all the answers

What does responsibility in the context of management refer to?

The duty to perform assigned tasks Signup and view all the answers

Which of the following is a potential downside of a strict chain of command?

Potential for slow decision making and rigidity Signup and view all the answers

In the context of departmentalization, which type focuses on customer groups?

Market departmentalization Signup and view all the answers

Study Notes

Organisational Chart

A visual representation of an organisation's structure

Designing Organisational Structure

A process involving decisions about six key elements:
- Work specialisation
- Departmentalisation
- Chain of command
- Span of control
- Centralisation and decentralisation
- Formalisation

Work Specialisation

Dividing work activities into separate job tasks
Also known as division of labour
Important organising mechanism, but can lead to overspecialisation and human diseconomies such as:
- Boredom
- Fatigue
- Stress
- Poor quality
- Increased absenteeism
- Higher turnover

Departmentalisation

Grouping jobs into manageable units to achieve organisational goals
Five common forms of departmentalisation:
- Functional departmentalisation
- Product departmentalisation
- Geographical departmentalisation
- Process departmentalisation
- Customer departmentalisation

Chain of Command

The continuous line of authority that extends from upper levels of an organisation to the lowest levels
Clarifies who reports to whom
Associated terms:
- Authority: the rights inherent in a managerial position to tell people what to do
- Responsibility: the obligation to perform tasks and duties
- Unity of command: each individual should have only one supervisor

Organising

Arranging and structuring work to accomplish an organisation's goals