Chapter 1: Organization Design PDF
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Northampton Community College
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This document provides a foundational overview of organizational design principles. It covers structural dimensions such as formalization, specialization, hierarchy, and complexity, as well as contextual factors like size, technology, environment, goals, strategy, and culture. The contrasting models of organic and mechanistic design are highlighted, along with a discussion of the emerging trend of bossless organizations.
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CHAPTER 1 What is an Organization? Organizations are social entities that are goal-directed, are designed as deliberately structured & coordinated activity systems & are linked to the external environment. What is The Importance of Organizations? Bring Together Resources to Achieve Desired Goa...
CHAPTER 1 What is an Organization? Organizations are social entities that are goal-directed, are designed as deliberately structured & coordinated activity systems & are linked to the external environment. What is The Importance of Organizations? Bring Together Resources to Achieve Desired Goals Produce Goods & Services Efficiently Facilitate Innovation Use Modern Manufacturing & Information Technologies Adapt to & Influence a Rapidly Changing Environment Create Value For owners, Customers and/or Employees Accommodate Challenges of Diversity, Ethics & Coordination Dimensions of Organzation Design Structural Dimensions Formalization The extent of written documentation (e.g., policies, procedures). Highly formalized organizations, like universities, have extensive rules, while small businesses may have little documentation & are informal. Specialization The division of labor, where a high degree means employees perform narrow tasks, and low specialization means employees handle a broader range of activities. Hierarchy of Authority Defines who reports to whom and is related to the span of control (the number of people a manager supervises). A narrow span leads to a tall hierarchy, while a wide span results in a shorter hierarchy. Complexity Refers to the number of distinct units or activities within an organization, measured vertically (levels of hierarchy), horizontally (departments) & spatially (geographical dispersion). Centralization The level where decision-making authority resides. Centralized organizations make decisions at the top, while decentralized organizations delegate authority to lower levels. Contextual Dimensions (Contingency Factors) Size Typically measured by the number of employees, it reflects the human aspect of the organization, unlike sales or assets. Organizational Technology Refers to tools, techniques, and processes used to convert inputs into outputs Environment Comprises all external elements influencing the organization Goals & Strategy Define an organization’s purpose and competitive approach. Goals express intent, while strategy details the resource allocation & activities needed to achieve them. Culture Represents shared values, beliefs, and norms among employees, providing cohesion. The Contrast of Organic & Mechanistic Designs Contextual Dimensions Organic Design Mechanistic Design Small Size Large Size Innovative Strategy Efficiency Strategy Changing Environment Stable Environment Adaptive Culture Rigid Culture Works For Service Technology Works For Manufacturing Technology Structural Dimensions Organic Design Mechanistic Design Decentralized Structure Centralized Structure Collaborative Teamwork Strict Hierarchal of Authority Empowered Roles Specialized Roles Horizontal Communication Vertical Communication Few Roles, Informal Many Roles, Formal The Emerging Bossless Design Trend A few organizations have shifted to an extremely organic, “bossless” design. In a Bossless company, there are typically no job titles, no seniority, and no managers or executives. People work together on an equal basis
