OB Chp 14

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Questions and Answers

What characterizes a mechanistic structure?

Emphasis on job rotation and team collaboration

Decentralized decision-making and flexibility

Focus on local responsiveness to areas

Tall hierarchy and rigid rules (correct)

Which type of departmentation is associated with grouping by expertise?

Geographic

Product

Matrix

Functional (correct)

What impact does a wide span of control have on an organization?

Requires stricter formalization and procedures

Improves communication and fosters autonomy (correct)

Increases hierarchy and limits autonomy

Encourages close supervision and micromanagement

What is a disadvantage of product-based departmentation?

Duplication of efforts across product lines Signup and view all the answers

How do organic structures differ from mechanistic structures?

Organic structures emphasize flexibility and decentralized decisions Signup and view all the answers

What is considered a primary advantage of matrix departmentation?

Flexibility and balance in management Signup and view all the answers

What disadvantage is associated with high formalization in an organization?

Limited adaptability to change Signup and view all the answers

Which departmentation type is designed to be responsive to specific customer groups?

Customer Signup and view all the answers

Which organization structure is best for environments requiring adaptability and responsiveness?

Organic Organization Signup and view all the answers

Which of the following best describes a closed system?

Self-contained and ignores environmental changes Signup and view all the answers

What mechanism allows for flexible communication between departments?

Mutual Adjustment Signup and view all the answers

What does the principle of loose coupling refer to?

A disconnect between the objective and perceived environment Signup and view all the answers

Which type of organization retains core functions and outsources others?

Modular Organization Signup and view all the answers

What is the primary purpose of scanning in environmental diagnosis?

To identify current environmental conditions Signup and view all the answers

What type of vertical integration involves a manufacturer opening its own retail stores?

Forward Integration Signup and view all the answers

In which type of environment is an organic structure most suited?

Dynamic and uncertain Signup and view all the answers

Which of the following is NOT a component of an organizational environment?

Employee Autonomy Signup and view all the answers

n the Duncan Model, what type of environment is characterized by high complexity and dynamic change?

Complex and dynamic Signup and view all the answers

What determines the power of systems in organizational environments?

The ability to adapt to external pressures Signup and view all the answers

Which structure is most suitable for an organization pursuing innovation as a strategy?

Organic Structure Signup and view all the answers

Study Notes

Organizational Structure

Structure defines how an organization divides tasks to achieve goals, requiring vertical and horizontal divisions of labor.
Vertical division assigns decision-making authority, creating a hierarchy impacting autonomy and communication.
Horizontal division groups tasks into jobs and departments aligning with organizational goals, leading to potential departmental silos and misalignment.
Key structural elements include job specialization (vertical and horizontal), departmentation (functional, product, matrix, geographic, customer, hybrid), integration/coordination methods, span of control (wide/narrow), formalization (rigid/flexible), and centralization (top-down/distributed).

Departmentation Types

Functional: Groups employees by expertise (e.g., finance, marketing), promoting efficiency and specialization but potentially hindering communication.
Product: Organizes based on product lines (e.g., product divisions), improving coordination but potentially leading to redundancy in resources.
Matrix: Employees report to both functional and project managers for flexibility and balance, but potentially leading to role conflict and stress.
Geographic: Divides based on region (e.g., regional offices), enabling local responsiveness but potentially duplicating resources.
Customer: Groups based on customer types (e.g., commercial vs. personal clients) enabling specialized service but potentially impacting economies of scale.
Hybrid: Combines different departmentation types, maximizing strengths and minimizing weaknesses.

Structure Types: Mechanistic vs. Organic

Mechanistic: Tall hierarchy, rigid rules, centralized decisions, best for stable, routine environments (e.g., fast-food restaurants) – efficient and predictable, but slow to adapt.
Organic: Flat hierarchy, decentralized decisions, flexible roles, best for dynamic, innovation-driven environments (e.g., custom jewelry design) – adaptable and responsive, but less predictable and controllable.

Contemporary Structures

Network Organization: Connects specialized organizations through liaison roles (e.g., Daimler Chrysler).
Virtual Organization: Dynamic networks of independent entities (e.g., publishing houses outsourcing to authors).
Modular Organization: Retains core functions, outsourcing others (e.g., Nike outsourcing production).
Holacracy: Decentralized, self-managing teams (e.g., Zappos).
Ambidextrous Organization: Combines exploitation of current strengths with exploration of new opportunities (e.g., Apple).

Organizational Environment

Open Systems: Interact with the environment for resources (inputs) and products/services (outputs), in contrast to closed systems.
Environmental Components: Include economy, customers, suppliers, competitors, social/political factors, technology, and interest groups (e.g., donors).
Loose Coupling: Explains the disconnect between the perceived and actual environment.
Environmental Uncertainty: A key concept in determining optimal structure, characterized by complexity (simple/complex) and rate of change (static/dynamic). Mechanistic structures suit stable, predictable environments; organic structures fit uncertain, dynamic environments.

Integration/Coordination Mechanisms

Direct Supervision: Managers overseeing tasks directly.
Standardization: Includes standardization of work processes (rules), outputs (budgets, deliverables), and skills (specialized training).
Mutual Adjustment: Informal communication, most flexible coordination method.
Liaison Roles: Individuals bridging departments.
Task Forces: Temporary teams addressing cross-departmental issues.
Integrators: Permanent members assigned to resolve conflicts and enhance coordination.

Diagnosing Environments

Strategy-Structure Fit: Corresponding structures and strategies are crucial.
Scanning and Forecasting: Identifying current and predicting future environmental conditions.

Vertical Integration

Definition: Combining various stages of production or the supply chain under one organization.
Examples:
- Forward: Manufacturer opening its own retail stores.
- Backward: Retailer initiating goods manufacturing.

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Description

Test your knowledge on organizational structure concepts, including vertical and horizontal divisions of labor. Explore different departmentation types and their impacts on efficiency and communication within organizations. Understand the key elements that shape how organizations achieve their goals.