Understanding Organizations: Structure and Theory

• The lesson covers the nature of organizations, types of organizational structures, organization theories, delegation, and the comparison of formal and informal organizations.

Organization vs. Organizing

• An organization is a group of people working together under a division of labor and a hierarchy to achieve a common goal.
• Organizing involves establishing consistent relationships between jobs to foster cooperation among individuals and groups to achieve the organization's goals.

Nature of an Organization

• Differentiation involves the division of labor and specialization inside organizations.
• A typical organization consists of varied units with different tasks, skills, and work activities which coordinate for a common end.

Division of Labor and Specialization

• Division of labor assigns different tasks to different people within the organization's work units.
• Specialization is the process where separate individuals and units handle different tasks

Integration of Work Units

• Integration involves the collaboration and coordination of different work units or divisions within the organization.
• Coordination connects the work activities of different work divisions/units to achieve the firm's overall goal.

Types of Organizational Structures

• Vertical Structure: Authority rights allow individuals in positions like president and manager to give orders to subordinates, based on Bateman and Snell (2008).
• Horizontal Structure: This includes departmentalization of an organization into smaller work units.
• Network Structure: This consists of independent, typically single-function organizations/companies that collaborate to produce a product or service.

Types of Departments

• Line departments deal directly with the firm's primary goods and services, like manufacturing and selling.
• Staff departments support line departments via activities like research and legal matters.
• Functional Approach: The subdivisions are formed based on management and human resources management.
• Divisional Approach: Departments are formed based on the management of products, customers, or geographic coverage.
• Matrix Approach: There is a hybrid form where managers and staff report to superiors, the functional manager, and the divisional manager.

Organization Theories and Applications: Traditional Approaches

• Traditional organization theories are considered more conventional.
• Simple Theory: Featuring few departments, a wide span of control, subordinates reporting directly to a manager, centralized authority, and little formalization.
• Functional Theory: Design which groups together similar or related specialties; functional departmentalization is typically utilized in an entire organization.
• Divisional Theory: This design is structured with separate business divisions, overseen by a parent corporation that coordinates, controls, and provides support services.

Organization Theories and Applications: Modern Approaches

• Modern organizational theories are considered contemporary designs.
• Team Design: The entire organization is structured around work groups or teams, which can boost empowerment and reduce barriers, but may have pressure with a need for a definite chain of command.
• Matrix Project Design: Specialists from different departments work on projects, supervised by a project manager.
• Boundary-Less Design: With no hierarchy, departmentalization, or boundaries from customers and suppliers.

Delegation

• Delegation assigns a new or additional task to a subordinate. Include the right to make decisions and take action,
• The steps involve defining the goal, selecting the person for the task, assigning responsibility, asking about their approach, and granting authority to act.

Formal and Informal Organizations

• Formal organizations have defined hierarchical and reporting relationships.
• Informal organizations consist of social groups formed out of the need for social affiliation.
• The difference between formal and informal organizations, formal organizations aim for task accomplishment with management-driven structure, while informal groups aim for member satisfaction with a structure driven by individual members.
• Key differences include orientation, influence, leadership, and control, with formal organizations being task-oriented and controlled via formal authority, and informal organizations via social sanctions.