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Organizational structure
* The set of formal tasks assigned to individuals and departments
* Formal reporting relationships, including lines of authority, decision responsibilities, number of hierarchical levels and span of manager’s control
* Design of system to ensure coordination
Organizational chart
the visual representation of an organizations structure
Work specialization
the degree to which organizational tasks are subdivided into individual jobs: also called division of labor
– Extensive work specialization leads to efficiency
– Specialization creates separation and hinders coordination
– small firms a lot of different tasks
– big firms lets you focus on one specific task
Chain of command
unbroken line of authority that links all individuals in the organization and specifies who reports to whom
Unity of command
each employee is held accountable to only one supervisor
The scalar principles
a clearly defined line of authority in the organization that includes all employees
the formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve organizationally desired outcome
– Authority is vested in organizational positions, not people
– Authority flows down the vertical hierarchy
– Authority is accepted by subordinates
the duty to perform the task or activity as assigned
the process that managers use to transfer authority and responsibility to positions below them in the hierarchy
the people with authority and responsibility are subject to reporting and justifying task outcome to those above them in the chain of command
2 principles associated with chain of command
Unity of command and the scalar principles
Line department
performs tasks that reflect the organizations primary goal and mission
– Ex: produce and sell products and services
Staff department
include all those that provide specialized skills in support of line departments
– EX: Marketing, labor relations, research, accounting and HR
Line authority
people in management positions have formal authority to direct and control immediate subordinates
Staff authority
is narrower and includes the right to advise, recommend, counsel in the staff specialists area of expertise
Factors associated with larger span control/less supervision
• Work is stable and routine
• Subordinates perform similar work
• Subordinates are in one location
• Highly trained/ require little direction
• Rules and procedures are defined
• Few planning or non-supervisory activities
• Managers preference
5 different approaches to departmentalization (exhibit 10.9)
* Functional
* Divisional
* Matrix
* Team
* Virtual network
Functional Structure
Advantage: – Economies of scale and efficient resource use
– Development of in-depth skills and development
– Centralized decision-making
– Top manager direction and control

Disadvantages: – Poor communication across functional departments
– slow response to external changes; lagging innovation
-decisions concentrated at the top of hierarchy creating delay

Divisional structure
Advantage: -Fast response; flexibility in an unstable environment
– Foster concern for customer need
– Better coordination across functional departments

Disadvantages: – Duplication of resources
– Lack of technical specialization, expertise, and training
– poor coordination across divisions

Matrix structure
Advantage: -Highly effective in a complex, rapidly changing environment
– Efficient use of HR
– More efficient use of resources than a single hierarchy
– interdisciplinary cooperation; expertise available to all divisions

Disadvantages: -Confusion and frustration caused by the dual chain of command.
-High level of conflict
– Time lost due to meetings and discussions

Team structure
Advantage: -Improved coordination and cooperation
-Reduced barriers among departments
– Quick response to customer request and environmental changes
– Morale boost (employees are more enthusiastic)

Disadvantages: -Dual loyalties and conflict.
– Time and resource spent on meetings
– Too much decentralization

Virtual network structure
Advantage: – Flexibility and competitiveness on a global scale
-Draw on resources and expertise worldwide
– Reduced overhead

Disadvantage: – Lack of hands-on control.
– Higher uncertainty and greater demands on managers
– Weaker employee loyalty

refers to the managerial task of adjusting and synchronizing the diverse activities among different individuals and departments
a joint effort between people from two or more departments to produce outcomes that meet a common goal or shared purpose
Task force
a temporary team or committee formed to solve a specific short-term problem involving several departments
Cross-functional team
furthers horizontal coordination by including members across the organization. It meets regularly and works with continuing rather than temporary problems
Project manager
A person responsible for coordinating activities of several departments for the completion of a specific project
Which of the following typically is NOT considered a staff department?
– strategic planning
– accounting
– HR
– research and development
The matrix structure violates which of the following principles of management?
unity of command

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