Topic Nine Organization: Includes

10-1
Topic Nine
Organization
includes:
R&C Ch. 11 Foundations of Organizational
Design
R&C Ch. 12 Contemporary Organizational
Design
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as Pearson Education
Management, Eleventh Edition, Global Edition by Stephen
P. Robbins & Inc.
Mary Coulter
Prentice Hall
Describe six key elements in

organizational design.
Contrast mechanistic and organic
structures.
Discuss the contingency factors
that favor either the mechanistic
model or the organic model of
Describe traditional organizational
designs.
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11-2
Designing Organizational Structure

Organizing - arranging and structuring
work to accomplish an organizations
goals.
Organizational Structure - the formal
arrangement of jobs within an
organization.
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Designing Organizational Structure

Organizational chart - the visual representation of an
organizations structure.
Organizational Design - a process involving decisions
about six key elements:
Work specialization
Departmentalization
Chain of command
Span of control
Centralization and decentralization
Formalization
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Exhibit 11-1
Purposes of Organizing
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Organizational Structure
Work specialization - dividing work
activities into separate job tasks
Early proponents of work specialization
believed it could lead to great increases in
productivity
Overspecialization can result in human
diseconomies such as boredom, fatigue,
stress, poor quality, increased
absenteeism, and higher turnover.
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Exhibit 11-2 Economies and Diseconomies

of Work Specialization
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Departmentalization
Departmentalization - the basis by which jobs are
grouped together
Functional
Grouping jobs by functions
performed
Product
Grouping jobs by product
line
Geographical
Process
Grouping jobs on the basis
of product or customer flow
Customer
Grouping jobs by type of
customer and needs
Grouping jobs on the basis

of territory or geography
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11-8
Exhibit 11-3 The Five Common

Forms of Departmentalization
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Exhibit 11-3 (cont.)
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Exhibit 11-3 (cont.)
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Departmentalization Trends
Increasing use of customer
departmentalization
Cross-functional team - a work team
composed of individuals from various
functional specialties
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Chain of Command
Chain of Command - the continuous line
of authority that extends from upper levels
of an organization to the lowest levels of
the organizationclarifies who reports to
whom
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Authority
Authority - the rights inherent in a
managerial position to tell people what to
do and to expect them to do it.
Acceptance theory of authority - the
view that authority comes from the
willingness of subordinates to accept it.
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Responsibility and Unity of Command

Responsibility - the obligation or
expectation to perform.
Unity of command - the management
principle that each person should report to
only one manager
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Span of Control
Span of Control - the number of
employees who can be effectively and
efficiently supervised by a manager.
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Exhibit 11-6
Contrasting Spans of Control
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Centralization and Decentralization

Centralization - the degree to which decision
making is concentrated at upper levels of the
organization
Decentralization - the degree to which

lower-level employees provide input or actually
make decisions
Employee empowerment - giving

employees more authority (power) to make
decisions
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Formalization
Formalization - the degree to which jobs
within the organization are standardized
and the extent to which employee
behavior is guided by rules and
procedures.
Highly formalized jobs offer little discretion
over what is to be done.
Low formalization means fewer constraints on
how employees do their work.
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Mechanistic and Organic Structures

Mechanistic organization - an organizational
design thats rigid and tightly controlled
Organic organization - an organizational
design thats highly adaptive and flexible
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Exhibit 11-8 Mechanistic Versus

Organic Organizations
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Contingency Factors Affecting

Structural Choice
Strategy and Structure
Changes in corporate strategy should lead to
changes in an organizations structure that
support the strategy.
Certain structural designs work best with
different organizational strategies
The organic structure works well for organizations
pursuing meaningful and unique innovations
The mechanistic organization works best for
companies wanting to tightly control costs
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Contingency Factors (cont.)

Size and Structure - as an organization
grows larger, its structure tends to change
from organic to mechanistic with increased
specialization, departmentalization,
centralization, and rules/regulations.
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Technology and Structure
Organizations adapt their structures to their
technology.
Woodwards classification of firms based on
the complexity of the technology employed:
Unit production of single units or small batches
Mass production of large batches of output
Process production in continuous process of
outputs
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Environmental Uncertainty and Structure
Mechanistic organizational structures tend to
be most effective in stable and simple
environments.
The flexibility of organic organizational
structures is better suited for dynamic and
complex environments.
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Traditional Organizational Designs

Simple structure - an organizational design
with low departmentalization, wide spans of
control, centralized authority, and little
formalization
Functional structure - an organizational
design that groups together similar or related
occupational specialties
Divisional structure - an organizational
structure made up of separate, semiautonomous
units or divisions
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Exhibit 11-10
Traditional Organizational Designs
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Review Learning Outcome 11.1

Describe six key elements in organizational
design.
The key elements in organizational design
are:
Work specialization
Chain of command
Span of control
Departmentalization
Centralization-decentralization
Formalization
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Contrast mechanistic and organic
structures.
Mechanistic organization - a rigid and
tightly controlled structure
Organic organization - highly adaptive
and flexible
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Discuss the contingency factors that favor either
the mechanistic model or the organic model of
Structural decisions are influenced by:

Overall strategy of the organization
Size of the organization
Technology use employed by the
organization
Degree of environmental uncertainty
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Describe traditional organizational designs.
Simple structure - low departmentalization,
wide spans of control, authority centralized in
a single person, and little formalization.
Functional structure - groups similar or
related occupational specialties together.
Divisional structure is made up of separate
business units or divisions.
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10-32
The following materials

are from R&C Ch. 12

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as Pearson Education
Management, Eleventh Edition, Global Edition by Stephen
P. Robbins & Inc.
Mary Coulter
Prentice Hall
Contemporary Organizational Designs

Team Structure - an organizational structure in
which the entire organization is made up of work
teams
Matrix Structure - an organizational structure
that assigns specialists from different functional
departments to work on one or more projects
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Exhibit 12-1 Contemporary

Organizational Designs
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Exhibit 12-2
Example of a Matrix Organization
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Contemporary Organizational
Designs (cont.)
Project Structure - an organizational structure
in which employees continuously work on
projects
Boundaryless Organization - an organization
whose design is not defined by, or limited to, the
horizontal, vertical, or external boundaries
imposed by a predefined structure
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Exhibit 12-1 Contemporary

Organizational Designs (cont.)
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Designs (cont.)
Virtual Organization an organization that
consists of a small
core of full-time
employees and
outside specialists
temporarily hired as
needed to work on
projects.
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Designs (cont.)
Network Organization - an organization that
uses its own employees to do some work
activities and networks of outside suppliers to
provide other needed product components or
work processes.
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Describe contemporary organizational designs
Team structure - the entire organization is
made up of work teams.
Matrix structure - assigns specialists from
different functional departments to work on
one or more projects being led by project
managers
Project structure - Employees continuously
work on projects.
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(cont.)
Virtual organization - consists of a small core of
full-time employees and outside specialists
temporarily hired as needed to work on projects
Network organization - uses its own employees
to do some work activities and networks of
outside suppliers to provide other needed
product components or work processes.
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10-42
Chapter Review
1. Which of the following is NOT the
elements in organizational design?
A.
B.
C.
D.
Market position
Work specialization
Chain of command
Formalization

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10-43
Chapter Review
2. A mechanistic organization has a
relatively ________ span of control
compared with an organic
organization.
A.
B.
C.
D.
simple
narrow
complicated
wide

Prentice Hall
10-44
Chapter Review
3. Employees are ____________ when
organizations decentralize decision
making power to employees who
are closet to actions.
A.
B.
C.
D.
enlarged
employed
empowered
encrypted

Prentice Hall
10-45
Chapter Review
4. Which of the following is true about
project structure?
A. Project structure is the most suitable for large
organization.
B. Employees have to go back to their functional
departments after the project is finished.
C. Project structure is identical with matrix
structure.
D. Employees in project structure continuously
work on projects.
Prentice Hall
10-46
Chapter Review
5. The __________ determines the number of
levels and managers in an organisation.
A. delegation of authority
B. unity of command
C. chain of command
D. span of control

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10-47
Terms to Know
organizing
organizational structure
organizational chart
organizational design
work specialization
departmentalization
cross-functional teams
chain of command
authority
acceptance theory of
authority
responsibility
unity of command
span of control
centralization
decentralization
employee empowerment
formalization
mechanistic organization
organic organization
simple structure
functional structure
divisional structure
team structure
matrix structure
project structure
boundaryless organisation
virtual organisation
network organisation

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10-47

Topic Nine Organization: Includes

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10-1

Describe six key elements in

Designing Organizational Structure

Designing Organizational Structure

Exhibit 11-2 Economies and Diseconomies

Grouping jobs on the basis

Exhibit 11-3 The Five Common

Exhibit 11-3 (cont.)

Exhibit 11-3 (cont.)

Responsibility and Unity of Command

Centralization and Decentralization

Decentralization - the degree to which

Employee empowerment - giving

Mechanistic and Organic Structures

Exhibit 11-8 Mechanistic Versus

Contingency Factors Affecting

Contingency Factors (cont.)

Contingency Factors (cont.)

Contingency Factors (cont.)

Traditional Organizational Designs

Review Learning Outcome 11.1

Review Learning Outcome 11.2

Review Learning Outcome 11.3

Structural decisions are influenced by:

Review Learning Outcome 11.4

The following materials

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Contemporary Organizational Designs

Exhibit 12-1 Contemporary

Exhibit 12-1 Contemporary

Review Learning Outcome 12.1

Review Learning Outcome 12.1

Copyright 2012 Pearson

Copyright 2012 Pearson

Copyright 2012 Pearson

Copyright 2012 Pearson

Copyright 2012 Pearson

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