SGMT 3000 Lecture Notes - Lecture 12: Organizational Architecture, Organizational Culture, Formal System
13 Dec 2017
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Vertical differentiation: location of decisions making responsibilities within a structure, referring to a centralization or decentralization and also the number of layers in a hierarchy (tall or flat) Horizontal differentiation: formal division of the organization into sub-units. Centralization and decentralization: centralization: structure where the decision making authority is concentrated to a high level of management hierarchy, decentralization: decision making authority is distributed to lower level managers and employees. 80: concentrated power means managers have more power to make organizational change. Increased control establish autonomous, self-contained sub-units: autonomous sub-units: sub-unit that has all the resources, and decision making power for daily operations, less of an excuse for managers" poor performance and more accountability. The choice between decentralization and centralization: centralize some and decentralize others ie wal-mart centralized purchasing activities and decentralized pricing and stock decisions, overall firm strategy, finances, legal issues are usual centralized at the senior-management level.
