What Type of Organization Structure Do I Prefer?

Respond to each of the 15 statements by using one of the following numbers 1 = Strongly disagree 2 = Disagree somewhat 3 = Undecided 4 = Agree somewhat 5 = Strongly agree

What Type of Organization Structure Do I Prefer?

I prefer to work in an organization in which
1. Goals are defined by those at higher levels. 2. Clear job descriptions exist for every job. 3. Top management makes important decisions. 4. Promotions and pay increases are based as much on length of service as on level of performance. 5. Clear lines of authority and responsibility are established.

What Type of Organization Structure Do I Prefer?

I prefer to work in an organization in which
6. My career is pretty well planned out for me. 7. I have a great deal of job security. 8. I can specialize. 9. My boss is readily available. 10. Organization rules and regulations are clearly specified.

What Type of Organization Structure Do I Prefer?

I prefer to work in an organization in which
11. Information rigidly follows the chain of command. 12. There is a minimal number of new tasks for me to learn. 13. Work groups incur little turnover in members. 14. People accept authority of a leaders position. 15. I am part of a group whose members training and skills are similar to mine.

What Type of Organization Structure Do I Prefer?

Analysis and Interpretation This instrument measures your preference for working in a mechanistic or organic organization structure.
Mechanistic structures are characterized by extensive departmentalization, high formalization, a limited information network, and centralization. Organic structures are flat, use cross-hierarchical and cross-functional teams, low formalization, a comprehensive information network, and participating decisionmaking

What Type of Organization Structure Do I Prefer?

Analysis and Interpretation
Scores above 60 suggest a preference for a mechanistic design. Scores below 45 indicate a preference for an organic design Scores between 45 and 60 suggest no clear preference

Very low scores may also mean that youre likely to be frustrated by what you perceive as overly rigid structures of rules, regulations, and boss-centered leadership. Low scores indicate that you prefer small, innovative, flexible, team-oriented organizations. High scores indicate a preference for stable, rule-oriented, more bureaucratic organizations.

Organizing
PURPOSE

Divides work to be done into specific jobs and departments. Assigns tasks and responsibilities associated with individual jobs. Coordinates diverse organizational tasks. Clusters jobs into units. Establishes relationships among individuals, groups, and departments. Establishes formal lines of authority. Allocates and deploys organizational resources.

Organizing Organizing is defined as the process of creating an organizations structure. That process is important and serves many purposes. The challenge for managers is to design an organizational structure that allows employees to effectively and efficiently do their work.

Organizing
Organizational structure is the formal arrangement of jobs within an organization. When managers develop or change the structure, theyre engaged in organizational design, a process that involves decisions about six key elements:

Work specialization Departmentalization Chain of command Span of control Centralization and decentralization Formalization

Key Elements of Organizational Structure

Work Specialization

Adam Smith division of labor that contributes to increased employee productivity. The degree to which activities in an organization are divided into separate jobs. The essence is that an entire job is not done by one individual but instead is broken down into steps, and each step is completed by different person. An important organizing mechanism but not a source of everincreasing productivity. Example McDonalds uses high work specialization to efficiently make and sell its products, and most employees in health care organizations are specialized.

Key Elements of Organizational Structure (contd.) Departmentalization

Grouped back together so that common tasks can be coordinated. The basis by which jobs are grouped together is called departmentalization. Five common forms of departmentalization:
1.

Functional departmentalization

groups jobs by functions performed. can be used in all types of organizations, although the functions change to reflect the organizations purpose and work. groups jobs by product line. Each major product area is placed under the authority of a manager whos responsible for everything having to do with that product line.

1.

Product departmentalization

Key Elements of Organizational Structure (contd.) Departmentalization

3.

Geographical departmentalization

groups jobs on the basis of territory or geography such as southern, Midwestern, or northwestern regions or maybe European, Latin American, Asia-Pacific regions. groups jobs on the basis of product or customer flow. Work activities follow a natural processing flow of products or even of customers. groups jobs on the basis of customer who have common needs or problems that can best be met by having specialists for each.

4.

Process departmentalization

5.

Customer departmentalization

Large organizations often combine most or all of these forms of departmentalization

Key Elements of Organizational Structure (contd.) Departmentalization

Two popular trends

the increasing use of customer departmentalization the use of cross-functional teams. to monitor customers needs, and to respond to changes in those needs. Groups of individuals who are experts in various specialties and who work together. Each other believes in the use of cross-functional collaboration.

Customer departmentalization is being used

Cross-functional teams

Key Elements of Organizational Structure (contd.) Chain of Command

Concept was a cornerstone of organizational design. Today, less important.

Chain of command is the continuous line of authority that extends from upper organizational levels to the lowest levels and clarifies who reports to whom.
It helps employees answer questions such as Who do I go if I have a problem? To whom am I responsible?

Key Elements of Organizational Structure (contd.) Chain of Command

Three concepts, the main components of commands authority, responsibility, and unity of command.

Authority

the rights inherent in a managerial position to tell people what to do and to expect them to do it. To facilitate decision making and coordination A certain degree of authority to meet responsibilities. Employees assume an obligation to perform any assigned duties. This obligation or expectation to perform is known as responsibility. One of Fayols 14 principles of management Concept of a continuous line of authority. A person should report to only one manager. Without unity of command, conflicting demands and priorities from multiple bosses can create problems.

Responsibility

Unity of command

Key Elements of Organizational Structure (contd.) Span of Control

Span of control is the number of employees a manager can efficiently and effectively manage. Many factors influence the appropriate number of employees that a manager can efficiently and effectively manage. These factors include

the skills and abilities of the manager and the employees, and characteristics of the work being done.
For instance, the more training and experience employees have, the less direct supervision theyll need.

All things being equal, the wider or larger the span, the more efficient the organization

Key Elements of Organizational Structure (contd.) Span of Control Other contingency variables that determine the appropriate span include:
similarity of employee tasks the complexity of those tasks the physical proximity of subordinates the degree to which standardized procedures are in place the sophistication of the organizations information system the strength of the organizations culture, the preferred style of the manager

Key Elements of Organizational Structure (contd.) Centralization and Decentralization

Centralization describes the degree to which decision making is concentrated at a single point in the organization the top-level managers Decentralization is the degree to which lower-level employees provide input or actually make decisions. Concept of centralization-decentralization is relative, not absolute that is, an organization is never completely centralized or decentralized. Why Decentralization? Lower-level managers are closer to the action and typically have more detailed knowledge about problems and how best to solve them than do top managers.

Key Elements of Organizational Structure (contd.)

Factors That Influence the Amount of Centralization and Decentralization

More Centralization Environment is stable. Lower-level managers are not as capable or experienced at making decisions as upper-level managers. Lower-level managers do not want to have a say in decisions. Decisions are significant.

More Decentralization Environment is complex, uncertain. Lower-level managers are capable and experienced at making decisions. Lower-level managers want a voice in decisions. Decisions are relatively minor.

Key Elements of Organizational Structure (contd.)

Factors That Influence the Amount of Centralization and Decentralization

More Centralization Organization is facing a crisis or the risk of company failure. Company is large. Effective implementation of company strategies depends on managers retaining say over what happens.

More Decentralization Corporate culture is open to allowing managers to have a say in what happens. Company is geographically dispersed. Effective implementation of company strategies depends on managers having involvement and flexibility to make decisions.

Key Elements of Organizational Structure (contd.) Formalization

The degree to which jobs within the organization are standardized, and The extent to which employee behaviour is guided by rules and procedures.
there are explicit job descriptions, numerous organizational rules, and clearly defined procedures covering work processes.

In organizations with high formalization,

Where formalization is low,

job behaviours are relatively unstructured and employees have a great deal of freedom in how they do their work.

Organizational Design
Mechanistic Organization
High Specialization Rigid Departmentalization Clear Chain of Command Narrow Spans of Control Centralization High Formalization

Organic Organization
Cross-Functional Teams Cross-Hierarchical Teams Free Flow of Information Wide Spans of Control Decentralization Low Formalization

Organizational Design
The contingency factors that influence the decision, when is a mechanistic structure preferable and when is an organic one more appropriate:
1.

Strategy and Structure

Structure should follow strategy. Most current strategy frameworks tend to focus on three dimensions:

innovation; cost minimization; and imitation, (seeking to minimize risk and maximize profit opportunities by copying the market leaders).

1.

Size and Structure

Beyond a certain point, size becomes a less important influence on structure as an organization grows. Size significantly affects its structure.

Organizational Design
3.Technology and Structure The processes or methods that transform an organizations inputs into outputs differ by their degree of routineness or standardization.

In general, the more routine the technology, the more mechanistic the structure can be. Organizations with more non-routine technology are more likely to have organic structures.

3.Environmental Uncertainty and Structure Stable and simple environments Vs Dynamic and complex environments.

Global competition, accelerated product innovation by competitors, and increased demands from customers for high quality and faster deliveries are examples of dynamic environmental forces. Mechanistic organizations are not equipped to respond to rapid environmental change and environmental uncertainty. As a result, were seeing organizations designed to be more organic.

Common Organizational Designs

Two types 1. Traditional Organizational Designs, and 2. Contemporary Organizational Designs

1. Traditional Organizational Designs

The designs the simple structure, functional structure, and divisional structure tend to be more mechanistic.

Common Organizational Designs 1. Traditional Organizational Designs a. Simple Structure

Most organizations start - owners and employees. Low departmentalization, wide spans of control, authority centralized in a single person, and little formalization. Commonly used by small businesses in which the owner and manager are one and the same. As the number of employees rises, the structure tends to become more specialized and formalized:

rules and regulations are introduced, work becomes specialized, departments are created, levels of management are added, and the organization becomes increasingly bureaucratic. At this point, a manager might choose to organize around a functional structure or a divisional structure.

Common Organizational Designs

1. b.

Traditional Organizational Designs Functional Structure

An organizational design that groups similar or related occupational specialties together. Its the functional approach to departmentalization applied to the entire organization.

b.

Divisional Structure

An organizational structure made up of separate business units or divisions. Each unit or division has relatively limited autonomy, with a division manager responsible for performance and who has strategic and operational authority over his or her unit.

Common Organizational Designs

Simple Structure
Strengths: Fast; flexible; inexpensive to maintain; clear accountability Weaknesses: Not appropriate as organization grows; reliance on one person is risky.

Functional Structure

Strengths: Cost-saving advantages from specialization (economies of scale, minimal duplication of people and equipment) and employees are grouped with others who have similar tasks. Weaknesses: Pursuit of functional goals can cause managers to lose sight of whats best for overall organization; functional specialists become insulated and have little understanding of what other units are doing.

Divisional Structure

Strengths: Focuses on results division managers are responsible for what happens to their products and services. Weaknesses: Duplication of activities and resources increases costs and reduces efficiency.

Common Organizational Designs

1. a.

Contemporary Organizational Designs

Newest Concepts in Organizational Design

Team Structure What it is: A structure in which the entire organization is made up of work groups of teams Advantages: Employees are more involved and empowered. Reduced barriers among functional areas. Disadvantages: No clear chain of command. Pressure on teams to perform.

Common Organizational Designs

Matrix-Project Structure What it is: Matrix is a structure that assigns specialists from different functional areas to work on projects but who return to their areas when the project is completed. Project is a structure in which employees continuously work on projects. As one project is completed, employees move on to the next project. Advantages: Fluid and flexible design that can respond to environmental changes. Faster decision making. Disadvantages: Complexity of assigning people to projects. Task and personality conflicts.
b.

Common Organizational Designs Boundaryless Structure What it is: A structure that is not defined by or limited to artificial horizontal, vertical, or external boundaries; includes virtual (film industry), networked (mfg outsourcing), and modular (assembling) types of organizations . Advantages: Highly flexible and responsive. Draws on talent wherever its found. Disadvantages: Lack of control. Communication difficulties.
c.

Common Organizational Designs Learning Organization Structure What it is: A structure that supports an organizations capacity to continuously adapt and change. Advantages: Employees are continuously sharing and applying knowledge. Ability to learn can be a source of sustainable competitive advantage. Disadvantages: Getting employees to share what they know can be difficult. Collaboration conflicts can arise.
d.

No matter what structural design managers choose for their organizations, the design should help employees do their work in the best most efficient and effective way they can. The structure should aid and facilitate organizational members as they carry out the organizations work. After all, the structure is simply a means to an end.