Management and Organizational Studies 2181A/B Chapter 14: Chapter 14 – Organizational Structure
13 Feb 2017
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Chapter 14 – Organizational Structure
Organizational structure: formally dictates how jobs and tasks are divided and coordinated between individuals
and groups within the company
the system of task, reporting, and authority relationships within which the work of the organization is done
Why Do Some Organizations Have Different Structures Than Others?
Organizational chart: a drawing that represents every job in the organization and the formal reporting
relationships between those jobs
Elements of Organizational Structure
Work Specialization: the degree to which tasks in an organization are divided into separate jobs
o Can be referred to as division of labour
o Highly specialized jobs a uderie eploees’ fleiilit – problematic in smaller firms where
employees should be more versatile
o Organizations with highly specialized jobs may also struggle with job satisfaction
Chain of Command: specifies who reports to whom; signifies formal authority relationships
o “peifi flo of authorit do through the leels of a orgaizatio’s struture
Span of Control: represents how many employees each manager in the organization has responsibility for
o Narrow spans of control – managers are much more hands-on with employees – requires organizations
to hire many managers – increase labour costs
o Organizational Performance INCREASES as Span of Control INCREASES
o A orgaizatio’s spa of otrol affets ho tall or flat its orgaizatioal hart eoes
Centralization: aspect of structure that dictates where decisions are formally made in organizations
o Highly Centralized Structure – only top managers within a company have the authority to make final
decisions
o Decentralized Structure – lower-level employees are given authority to make decisions
Becomes necessary as a company grows larger
Formalization: degree to which rules and procedures are used to standardize behaviours and decisions in an
organization
o High formalization – many specific rules and procedures used to standardize behaviours and decisions
Elements in Combination
o Mechanistic organizations: efficient, rigid, predictable, and standardized organizations that thrive in
stable environments
o Organic Organizations: flexible, adaptive, outward-focused organizations that thrive in dynamic
environments
Mechanistic Organizations
Organic Organizations
High degree of work specialization; employees are given a
very narrow view of the tasks they are to perform
Low degree of work specialization; employees are
encourage to take a broad view of the tasks they are to
perform
Very clear lines of authority; employees know exactly
whom they report to
Specified chain but employees think more broadly in
terms of where their responsibilities lie
High levels of hierarchical control; employees are not
encourages to make decisions without managers consent
Knowledge and expertise are decentralized; employees
encouraged to make own decisions when appropriate
Information is passed through vertical communication
between employee and supervisor
Lateral communication is encouraged, focusing on
information and advice as opposed to orders
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Document Summary
Organizational structure: formally dictates how jobs and tasks are divided and coordinated between individuals and groups within the company the system of task, reporting, and authority relationships within which the work of the organization is done. Organizational chart: a drawing that represents every job in the organization and the formal reporting relationships between those jobs. Chain of command: specifies who reports to whom; signifies formal authority relationships: pe(cid:272)ifi(cid:272) flo(cid:449) of authorit(cid:455) do(cid:449)(cid:374) through the le(cid:448)els of a(cid:374) orga(cid:374)izatio(cid:374)"s stru(cid:272)ture. Becomes necessary as a company grows larger. Formalization: degree to which rules and procedures are used to standardize behaviours and decisions in an organization: high formalization many specific rules and procedures used to standardize behaviours and decisions. Elements in combination: mechanistic organizations: efficient, rigid, predictable, and standardized organizations that thrive in stable environments, organic organizations: flexible, adaptive, outward-focused organizations that thrive in dynamic environments.
