Organization Structures and Design

Study Notes

Organization Structures and Design

An organization structure is a system of tasks, workflows, reporting relationships, and communication channels that link diverse individuals and groups together.
An organization chart displays major subunits and positions reporting to a common manager.
Social network analysis identifies formal structures and their social relationships. Informal networks provide emotional support and satisfy members' social needs.
Functional structures group people based on similar products, areas, customers, or processes. They work best in stable environments with limited change demands. In these structures, functions are formalized in the minds of people and on organizational charts.
One disadvantage of functional structures is that employees lack clear career paths within functions.
Divisional structures are common in organizations dealing with just one or a few products or services. Product structures enable managers to respond to changing market demands and tastes.
Geographical structures are used when there's a need to differentiate products or services in varied locations. A customer structure is a common structure in consumer product industries.
Divisional structures have reduced coordination between functional departments.
Divisional structures can also create rivalries between divisions competing for resources and top management attention.
Matrix structures have workers who are part of more than one formal group at a time. Workers report to two supervisors (one functional, one team). Matrix structures lead to poor customer service issues and may not be suitable for all scenarios.
Team structures use permanent and temporary teams to complete projects and daily tasks. Project teams are temporary and can be disbanded.
Supplier strategic alliances establish links between businesses that guarantee a smooth and timely flow of quality supplies.
Network structures have increased overhead and reduced operating efficiency, but they can be very useful for increasing flexibility and responsiveness.
Empowerment involves letting others make decisions and take discretion in their work.
Virtual organizations involve an alliance that rests until next called into action.
Delegation involves entrusting work to others, granting them the authority to act, accepting an obligation to complete the job.
Management in a matrix structure has more time for strategic issues, rather than lower level problem solving.
Team meetings are short and quick in a matrix structure.
Organization structure is a system that links roles and responsibilities to achieve a common objective.
An organization structure refers to the network of employees working together in a particular team, reporting relationships/structures, and communication linkages.
A well designed organization structure fosters efficient communication and promotes coordination among employees.
In a functional structure, people working on similar products, in the same area, with similar customers, or on the same processes, are grouped together. A product structure groups together people with skills that perform similar tasks in a business.
A customer structure focuses on groupings that align with different customer types.

Multiple Choice Questions (Examples)

An organization structure refers to a system of tasks, reporting relationships, and communication links.
Dividing up the work and assigning tasks to each employee is part of an organizing function.
Positions and titles representing work responsibilities are part of an organizational structure.
One of the basics of a formal organizational structure is the communication channels.