Organizational Design Basics: Postgraduate Certification Session 1-2

Formal Organization

• A formal organization is a structured system of roles and relationships designed to achieve specific goals.
• It includes official policies and established procedures guiding employee behaviors and interactions.

Allocation of People and Resources

• The process involves assigning individuals and resources to various tasks within the organization for efficiency and effectiveness.

Role of Authority

• Authority defines the right to make decisions and direct the activities of others within the organization.
• It establishes a hierarchy, clarifying accountability and responsibility.

Matrix Structure

• In a matrix structure, employees report to two superiors: a product team manager and a functional manager, facilitating cross-functional collaboration.

Specialization Control

• Establishing and controlling the degree of specialization involves defining specific roles and responsibilities to enhance efficiency and expertise.

Dual-Functional Structure

• A type of structure where people and resources are grouped simultaneously by function and by project or product, optimizing resource allocation across different areas.

Subunit for Goods or Services

• A subunit consists of a collection of functions or departments focused on a specific product or service, encouraging accountability and specialized performance.

Hierarchical Design

• The design of an organization’s hierarchy determines reporting relationships, linking various roles and subunits through an established chain of command.

Interaction Patterns

• A consciously created interaction pattern is a pre-mediated structure guiding how members communicate and collaborate within the organization.

Task Grouping

• Tasks are grouped into roles, and roles are organized into subunits to ensure specialization and streamline processes.

Skill-Based Subunit

• A subunit composes individuals with similar skills or knowledge, working collaboratively to effectively perform tasks related to their expertise.

Coordination and Motivation

• The ability to coordinate and motivate individuals aligns their efforts with the organization’s objectives, enhancing overall productivity and morale.

Differentiation in Organizational Design

• The process of differentiation involves dividing tasks and roles to specialize activities, enabling better focus and efficiency within departments.

Divisional vs. Functional Structure

• Divisional structures group resources based on products or projects, differing from functional structures that organize resources by specific functions or departments.

Characteristics of Matrix Structure

• The matrix structure is characterized by dual reporting relationships, balancing project-based outcomes with functional expertise.

Vertical Differentiation

• Vertical differentiation refers to the hierarchy levels in an organization, highlighting the chain of command from lower to higher authority.

Horizontal Differentiation

• Horizontal differentiation involves grouping roles and departments by common functions or capabilities, promoting specialization at the same organizational level.

Control Role in Organization

• Control mechanisms ensure that activities align with organizational goals, monitoring progress and implementing necessary adjustments.

Function Characteristics

• A function in an organizational structure is characterized by its specific role in the overall workflow, focused on a particular set of tasks.

Division of Labor

• Division of labor refers to the process of breaking down tasks into smaller, specialized roles, improving efficiency and productivity in organizational design.

This quiz covers the fundamentals of organizational design, including the understanding of organizational environment, key elements, types of structures, and design balances. It is intended for students of the postgraduate certification in strategic management. The session also explores the consciously created interaction patterns within an organization.