29 Questions
What type of environment favors decentralization according to the text?
Complex and uncertain
Which of the following is NOT a factor that influences the amount of centralization?
Highly formalized jobs
What does low formalization within an organization imply about employee behavior?
Employees have significant discretion in their work
In which scenario is centralization likely favored based on the text?
Company strategies depend on managers retaining say over what happens
When are highly formalized jobs most likely to be present in an organization?
When jobs need little discretion in task execution
What type of organizational structure is most effective in stable and simple environments?
Mechanistic
In Woodward's classification, which type of technology is associated with organic organizations?
Process production
What type of structure is needed for an organization focusing on tightly controlling costs?
Mechanistic
As an organization grows larger, what tends to change in its structure?
Rules and regulations increase
Which type of environment is best suited for an organic organizational structure?
Dynamic and complex
When an organization imitates market leaders to maximize profitability, what elements are required in its structure according to the text?
Organic and mechanistic elements
What is the main purpose of work specialization in organizational structure?
To divide tasks into specific jobs completed by different individuals
What are some potential negative outcomes of overspecialization in an organization?
Increased absenteeism and higher turnover
Which of the following is NOT a key element in organizational design decisions?
Budget allocation
What does departmentalization involve in organizational design?
Grouping jobs into units based on some reasonable scheme
Why is a proper chain of command crucial in organizational design?
To establish lines of authority and responsibility
How does centralization differ from decentralization in organizational design?
Centralization involves decision-making by top management, while decentralization allows decision-making at lower levels.
What is a key advantage of a boundaryless structure?
High responsiveness
In a team structure, what is the composition of the entire organization?
Work groups or self-managed teams
What characterizes a matrix or project structure?
Continuous work on projects with different managers
What is the primary aim of a boundaryless organization?
Breaking down external barriers
What type of organizational design eliminates the chain of command and uses empowered teams instead of departments?
Boundaryless organization
Which organizational structure type draws on talent wherever it is found and is highly flexible?
Boundaryless structure
What type of organization consists of a small core of full-time employees and hires specialists temporarily?
Virtual Organization
In a network organization, what does the small core organization do with its major business functions?
Outsources them
What type of organization uses outside suppliers to provide product components for its final assembly operations?
Modular Organization
What are the characteristics of a learning organization?
Open team-based structure, extensive information sharing, supportive leadership, strong culture of shared values
Which organizational design challenge involves managing the cultural implications of design elements?
Managing Global Structural Issues
What is the key practice that helps an organization continuously learn, adapt, and change?
Knowledge management by employees
Study Notes
Factors Influencing Centralization and Decentralization
- Complex and uncertain environment favors decentralization
- Lower-level managers being capable and experienced in decision-making favors decentralization
- Lower-level managers wanting a voice in decisions favors decentralization
- Significant decisions favor decentralization
- Open corporate culture favors decentralization
- Geographically dispersed companies favor decentralization
Formalization
- Highly formalized jobs offer little discretion over what is to be done
- Low formalization means fewer constraints on how employees do their work
Organizational Design Types
- Virtual Organization: a small core of full-time employees with temporary hires for opportunities
- Network Organization: a small core organization that outsources major business functions
- Modular Organization: a manufacturing organization that uses outside suppliers for product components
Organizational Design Challenges
- Keeping employees connected in a dispersed and mobile workforce
- Building a learning organization
- Managing global structural issues and cultural implications
The Learning Organization
- An organization that continuously learns, adapts, and changes through knowledge management
- Characteristics: open team-based organization design, extensive information sharing, leadership with a shared vision, and a strong culture of shared values and trust
Strategy and Structure
- Achievement of strategic goals is facilitated by changes in organizational structure
- Cost minimization requires a mechanistic structure
- Imitation requires both organic and mechanistic elements in the organization's structure
Size and Structure
- As an organization grows, its structure tends to change from organic to mechanistic with increased specialization, departmentalization, centralization, and rules
Technology and Structure
- Organizations adapt their structures to their technology
- Woodward's classification: unit production, mass production, and process production
- Routine technology = mechanistic organizations, non-routine technology = organic organizations
Environmental Uncertainty and Structure
- Mechanistic structures are effective in stable and simple environments
- Organic structures are better suited for dynamic and complex environments
Contemporary Organizational Designs
- Boundaryless Structure: highly flexible and responsive, draws on talent wherever it's found
- Team Structures: the entire organization is made up of work groups or self-managed teams of empowered employees
- Matrix and Project Structures: specialists from different functional departments are assigned to work on projects led by project managers
- Boundaryless Organization: an flexible and unstructured organizational design that breaks down external barriers between the organization and its customers and suppliers
Test your knowledge about organizational structure and design, including key elements such as work specialization, departmentalization, chain of command, span of control, centralization, decentralization, and formalization. Learn about the purposes of organizing and how it divides work into specific jobs and departments.
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