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Foundations of Organization Structure

organizational structure
the way in which job tasks are formally divided, grouped, and coordinated.
6 elements of designing organization structure
work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization
work specialization
the degree to which tasks in an organization are subdivided into separate jobs
departmentalization
the basis by which jobs in an organization are grouped together
ways to departmentalize
by functions, type of product, geography, process, and type of customer
chain of command
the unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom
authority
the rights inherent in a managerial position to give orders and to expect the orders to be obeyed
unity of command
the idea that a subordinate should have only one superior to whom he or she is directly responsible
span of control
the number of subordinates a manager can efficiently and effectively direct
centralization
the degree to which decision making is concentrated at a single point in an organization
formalization
the degree to which jobs within an organization are standardized
common organizational designs
simple structure, bureaucracy, matrix structure
simple structure
a structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization
bureaucracy
a structure with highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command
matrix structure
a structure that creates dual lines of authority and combines functional and product departmentalization
new organizational designs
the virtual organization and the boundaryless organization
virtual organization
a small, core organization that outsources major business functions. also sometimes called the network, or modular, organization
boundaryless organization
an organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams
mechanistic model
a structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization
organic model
a structure that is flat, uses cross-hierarchal and cross-funtional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making
determinants of organization structure
strategy, organization size, technology, environment
3 strategy dimensions
innovation, cost minimization, and imitation
innovation strategy
a strategy that emphasizes the introduction of major new products and services
cost minimization strategy
a strategy that emphasizes high cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting
imitation strategy
a strategy that seeks to move into new products or new markets only after their viability has already been proven
technology
he way in which an organization transfers its inputs into outputs
degree of routineness
the common theme that differentiates technologies
environment
institutions or forces outside an organization that potentially affect the organization’s performance
capacity
the degree to which an environment can support growth
volatility
the degree of instability in an environment
complexity
the degree of heterogeneity and concentration among environmental elements
3 dimensions of an environment
capacity, volatility, complexity

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