CHAPTER 14: FOUNDATIONS OF ORGANIZATION STRUCTURE

Organizational structure is important in every company or organization in order for the

employees not to be confused in their positions. It defines how tasks are formally divided, grouped, and
coordinated. There are key elements of organizational structure which includes work specialization,
departmentalization, chain of command, span of control, centralization and decentralization and
formalization.

First to tackle is work specialization. It is the degree to which tasks in the organization are
subdivided into separate jobs. The essence of this is to divide a job into a number of steps, each
completed by a separate individual. Individual specialize in doing part of an activity rather than the
entirely. This is where the skills of the employees will be used efficiently. Next is departmentalization, it
is the basis by which jobs are grouped together. In our organization, which is in Real Estate Company,
we have this so called Functional Departmentalization which is the most popular ways to group
activities. We have our Board of Directors, HR Department, Accounting Department, Sales and
Marketing Department, Processing Department and Engineering Department. The major advantage of
this type of functional departmentalization is efficiencies gained from putting like specialist together.
Third one is chain of command, it is the unbroken line of authority that extends from the top of the
organization to the lowest echelon and clarifies who reports to whom. Next is span of control, it is the
number of subordinates a manager can efficiently and effectively direct. Fifth one is centralization and
decentralization. Centralization is the degree to which decision making is concentrated at a single point
in the organization. Decentralization is the degree to which decision making is spread throughout the
organization. Last one is formalization; it is the degree to which jobs within the organization are
standardized. It is subdivided into high formalization and low formalization.

There are three common organizational designs, these includes simple structure, bureaucracy,
and matrix structure. Simple structure is a flat organization. It is usually has only two or three vertical
levels, a loose of body employees, and one individual in whom the decision making authority is
centralized. Standardization is the key concept that underlies all bureaucracy. They all rely on
standardized work process for coordination and control. Its primary strength is its ability to perform
standardized activities in a highly efficient manner. And lastly is matrix structure, it is a structure that
creates dual lines of authority and combines functional and product departmentalization.

The four reasons that structure differ are in strategy, organizational size, technology, and
environment. Strategy includes innovation strategy, cost-minimization strategy, and imitation strategy.
Organizational size, it means as organizations grow, they become more mechanistic, more specialized,
with more rules and regulations. Technology, it is how organization transfers its inputs into outputs. The
more routine the activities, the more mechanistic the structure with greater formalization. The last one
is environment, institutions or forces outside the organization that potentially affect the organization’s
performance.
CHAPTER 15: CONFLICT AND NEGOTIATON

Conflict is inevitable in an organization especially when you are surrounded by competitive

people. And also, it arises because of employees’ different perspectives in lives. Conflict is defined a
progress that begins when one party perceives that another party has negatively affected, or is about to
negatively affect, something that the first party cares about that point in an ongoing activity when an
interaction cross over to become an interparty conflict. It encompasses a wide range of conflicts that
people experience in organizations.

Traditional view of conflict is the belief that all conflict is harmful and must be avoided. The
causes of this are poor communication, lack of openness and failure to respond to employee needs.
Human relations view of conflict is the belief that conflict is a natural and inevitable outcome in any
group. Interactionist view of conflict is the belief that conflict is not only a positive force in a group but
that it is absolutely necessary for a group to perform effectively.

Functional conflict is a conflict that supports the goals of the group and improves its
performance. While dysfunctional conflict is a conflict that hinders group performance. There are types
of conflict which includes task conflict, relationship conflict and process conflict. Task conflict refers to
conflict over content and goals of the work. Relationship conflict is a conflict based on interpersonal
relationships. And process conflict is a conflict over how work gets done.

Negotiation is a process in which two or more parties exchange goods or services and attempt
to agree on the exchange rate them. There are two types of bargaining strategies which includes
distributive bargaining and integrative bargaining. Distributive bargaining is a negotiation that seeks to
divide up a fixed amount of resources; a win-lose situation. While integrative bargaining is a negotiation
that seeks one or more settlements that can create a win-win solution. The negotiation process includes
preparation planning, definition of ground rules, clarification and justification, bargaining and problem
solving and closure and implementation. Issues in negotiation are the role of mood and personality
traits in negotiation and gender differences in negotiation.

Third party negotiation includes mediator, arbitrator, conciliator, and consultant. Mediator is a
neutral third party who facilitates a negotiated solution by using reasoning, persuasion, and suggestions
for alternatives. Arbitrator is a third party to a negotiation who has the authority to dictate an
agreement. Conciliator is a trusted third party who provides an informal communication link between
the negotiator and the opponent. Consultant is an impartial third party, skilled in conflict management,
who attempts to facilitate creative problem solving through communication and analysis.
CHAPTER 16: ORGANIZATIONAL CULTURE

Organizational culture refers to a system of shared meaning held by members that distinguishes
the organization from other organizations. Research identifies seven primary characteristics that capture
the essence of an organization’s culture. First is innovation and risk taking, which is the degree to which
employees are encouraged to do both. Second is attention to detail. Third is outcome orientation or the
degree to which employees are expected to exhibit precision, analysis, and attention to detail. Fourth is
people orientation, which is the degree to which management decisions consider the effect of outcomes
on people within the organization. Fifth is team orientation described as the degree to which work
activities are organized around teams rather than individuals. Sixth is aggressiveness, said to be the
degree to which people are aggressive and competitive. And seventh is Stability. It is the degree to
which activities emphasize maintaining the status quo (something received or given for something else).
Each of the characteristics exists on a continuum (continuation) from low to high. Organizational culture
is concerned with employees’ perception of the characteristics of the culture—not whether they like
them. Research has sought to measure how employees see their organization/ It asks such questions as ,
“Does it encourage teamwork?”, “Does it reward innovation?”, and “Does it stifle initiative?”
Organizational culture differs from job satisfaction in that job satisfaction is evaluative while
organizational culture is descriptive

Cultures can be positive or negative for organizations. The culture’s functions include a
Boundary-defining role. It conveys a sense of identity for members. It facilitates the generation of
commitment. It enhances the stability of the social system. And, culture serves as a sense-making and
control mechanism; guides and shapes attitudes and behavior of employees. In identifying the factors
that create and sustain on organization’s culture, let us know how a culture begins. Ultimate source of
an organization’s culture is its founders. Founders have vision of what the organization should be.
Unconstrained by previous ideologies or customs. New organizations are typically small; facilitates the
founders’ imparting of their vision on all organizational members.

The stages in the socialization process include prearrival stage, encounter stage, and
metamorphosis stage. Prearrival stage is the period of learning in the socialization process that occurs
before a new employee joins the organization. Encounter stage is the stage in the socialization process
in which a new employee sees what the organization is really like and confronts the possibility that
expectations and reality may diverge. Metamorphosis stage is the stage in the socialization process in
which a new employee changes and adjusts to the job, work group, and organization.