GMS 200 Chapter Notes - Chapter 8: Strategic Management, Problem Solving, Organizational Structure
5 Jun 2013
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CHAPTER 8 – ORGANIZATION STRUCTURES AND DESIGNS
ORGANIZING AS A MANAGEMENT FUNCTION
-Organizing: arranges people and resources to work toward a goal
oOrganizing begins the process of implementation by clarifying jobs and
working relationships
⋅What is Organization Structure?
-Organization Structure: is a system of tasks, reporting relationships, and
communication linkages
oAny structure should both allocate tasks through a division of labour and
provide for the coordination of performance results
⋅Formal Structures
-Organization Chart: describes the arrangement of work positions within an
organization
oTypical chart shows various positions and job titles as well as lines of
authority
-Formal Structure: is the official structure of the organization
- An organization’s formal structure includes the following:
oDivision of work: positions and titles show work responsibilities
oSupervisory relationships: lines show who reports to whom
oCommunication channels: lines show formal communication flow
oMajor subunits: positions reporting to a common manager are shown
oLevels of management: vertical layers of management are shown
⋅Informal Structures
-Informal Structure: the set of unofficial relationships among an organization’s
members
- People meeting up without any official work related conversations
- Advantage – informal learning: takes place while working and interacting together
throughout the workday
-Social network analysis – is one way of identifying informal structures and their
embedded social relationships
oAsks people to identify who they turn to for help most often, and who they
communicate regularly, and who energize and de-energizes them
TRADITIONAL ORGANIZATION STRUCTURES
-Departmentalization: is the process of grouping together people and jobs into
work units
oThree major result types of organizational structures:
1. Functional
2. Divisional
3. Matrix
⋅Functional Structures
-Functional Structure: groups together people with similar skills who perform
similar tasks
- Figure 8.2, Functional Structures in a business, pg. 224
-Major advantages of a functional structure include the following:
oEconomies of scale with efficient use of resources
oTask assignments consistent with expertise and training
oHigh-quality technical problem solving
oIn-depth training and skill development within functions
oClear career paths within functions
-Major disadvantages of functional structures:
oDifficulties in pinpointing responsibilities such as cost containment, product
or service quality, timeliness, and innovation
oFunctional Chimneys Problem: is a lack of communication and
coordination across functions
⋅Divisional Structures
-Divisional Structure: groups together people working on the same product, in the
same area, with similar customers, or on the same process
- Figure 8,3, Divisional structures, pg. 225
-Advantages of divisional structure:
oMore flexibility in responding to environmental changes
oImproved coordination across functional departments
oClear points of responsibility for product or service delivery
oExpertise focused on specific customers, products, and regions
oGreater ease in changing size by adding or deleting divisions
-Disadvantages of divisional structure:
oCan reduce economies of scale
oIncrease costs through the duplication of resources and efforts across
divisions
oCreate unhealthy rivalries as divisions compete for resources and top-
management attention
-Product Structures: (sometimes called market structures) groups together people
and jobs related to a simple product or service
oThey clearly identify costs, profits, problems, and successes in a market area
with a central point of accountability
oCommon in large organizations, product structures may even extend into
global operations
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Document Summary
Organization structure: is a system of tasks, reporting relationships, and communication linkages: any structure should both allocate tasks through a division of labour and provide for the coordination of performance results. Organization chart: describes the arrangement of work positions within an: typical chart shows various positions and job titles as well as lines of organization authority. Formal structure: is the official structure of the organization. Informal structure: the set of unofficial relationships among an organization"s members. People meeting up without any official work related conversations. Advantage informal learning: takes place while working and interacting together. Departmentalization: is the process of grouping together people and jobs into: three major result types of organizational structures: work units, functional, divisional (cid:215) (cid:215, matrix. Functional structure: groups together people with similar skills who perform similar tasks. Figure 8. 2, functional structures in a business, pg.
