Organizational Structures and Designs: Summary of Chapter 11 môn Principles of Management | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh
Organizing is the process of arranging people and other resources such as materials to work together to accomplish a goal. The purpose is to create a division of labor and then coordinateresults. Tài liệu giúp bạn tham khảo, ôn tập và đạt kết quả cao. Mời đọc đón xem!
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CHAP 11: Organizational
Organizing is the process of arranging people and other resources such as
materials to work together to accomplish a goal. The purpose is to create a
division of labor and then coordinate results.
The way where various parts of an organization are arranged is called the or
ganization structure. A good structure is the one that helps manager to
allocate tasks through a division of labor and providing the coordination o f performance. I.
Organizing as a Management Function 1. Formal Structures
Organization chart: identifies positions and job titles as well as the lines of
authority and communication between them. It shows the formal structure,
or how the organization is intended to function.
EX: the top excutives have different titles and positions between the supervisor
Division of work—Positions and titles show work responsibilities. ‒
Supervisory relationships—Lines show who reports to whom. ‒
Communication channels—Lines show formal communication flows. ‒
Major subunits—Positions reporting to a common manager are shown. ‒
Levels of management—Vertical layers of management are shown. ‒ 2. Informal Structures
Informal structure: made up of the unoffi cial, but often critical, working rel
ationships, shows how work really gets done, in contrast to the formal arran
gements shown in the organization chart. This information can be used to up
date the organization chart to better reflect the way things actually work.=>
impacts an individual’s job satisfaction
EX: Even though the CEO is the highest position in the company
according to Formal, the chief accountant sometimes still has control
over the CEO because they are aware of the CEO's violations (tax evasion, bribery,...)
Disadvantages of Informal structures:
‒May work against best interests of entire organization ‒Susceptibility to rumor
‒May carry inaccuarate resistance to change
‒Diversion of work efforts from important objectives
‒Feeling alienation by outsiders
II. Traditional Organization Structures
The basic principle of organizing is performance can be improved when ta
sks are divided and people are allowed to become experts in specific jobs.
Departmental Groups people with and jobs into work units or formal
teams are linked to create three major types of traditional organizational structures
ex: The traditional organizational chart may look like a pyramid. The
chief executive offi cer would sit at the top, and the layer underneath
would consist of department managers who report to the CEO and
oversee the overall operations of their department. Next would be fi rst-
line managers, or supervisors, who manage the daily operations of
their department or teams and below are the non-management employees who report to them.
1. Functional Structures
People with similar skills and performing similar tasks are grouped together
into formal work units. Members share technical expertise, interests, and res
ponsibilities. This structure is used in any kind of business.
Advantages of Functional structures
‒Economies of scale with efficient use of resources.
‒Task assignments consistent with expertise and training
‒High-quality technical problem solving
‒In-depth training and skill development
‒Clear career paths within functions
Disadvantages of Functional structures:
‒ Functional chimneys or functional silos problem—a lack of
communication, coordination, and problem solving across functions.
‒Excessive upward referral of decisions
‒Difficulties in pinpointing responsibilities. Ex: products’ target did
not go up bc the marketing did not good or developed product teams were not good?
‒Sense of cooperation and common purpose break down
‒The narrow view of performance objectives
2. Divisional Structures
Divisional structure groups together people who work on the same product
or process, serve similar customers, or are located in the same area or geogr
aphical region. Divisional structures are common in complex organizations w
ith diverse operations that extend across many products, territories, custom ers, and work processes.
Advantages of Divisional structures
‒More flexibility in responding to environmental changes ‒Improved coordination
‒Clear points of responsibility
‒Expertise focused on specific customers, products, and regions
‒Greater ease in restructuring
Disadvantages of Divisional structures
‒Duplication of resources and efforts across divisions.
‒Competition and poor coordination across divisions
‒Emphasis on divisional goals at expense of organizational goals 3. Matrix Structures
The matrix structure combines the functional and divisional structures. It is
an attempt to gain the advantages and minimize the disadvantages of each.
This is accomplished by creating permanent teams that cut across functions
to support specific products, projects, or programs. Matrix structures are als
o found in multinational corporations, where they offer the flexibility to deal
with regional differences while still handling multiple product, program, or p roject needs .
Ex: Imagine you work in an advertising agency as a video producer.
You will probably have to report to the media department manager,
your functional chain of command boss – the head of your department.
However, you will probably also have to report to somebody who is in
charge of a specific project for a client – the project manager – boss in the project chain of command .
Advantages of Matrix structures
‒Better cooperation across functions ‒Improved decision making
‒Increased flexibility in restructuring ‒Better customer service
‒Better performance accountability
‒Improved strategic management
Disadvantages of Matrix structures
‒Two-boss system is susceptible to power struggles
‒Two-boss system can create task confusion and conflict in work priorities
‒Team meetings are time consuming
‒Team may develop “groupitis”
‒Increased costs due to adding team leaders to structure
III. Horizontal Organization Structures 1. Team Structures
Team structures extensively use permanent and temporary teams to solve
problems, complete special projects, and accomplish day-to-day tasks. Ofte
n use cross-functional teams composed of members from different functiona
l departments. Project teams are convened for a specific task or project and disbanded once completed
Advantages of Team structures:
‒Eliminates diffi culties with communication and decision making
‒Eliminates barriers between operating departments ‒Improved morale
‒Greater sense of involvement and identification
‒Increased enthusiasm for work
‒Improved quality and speed of decision making
Disadvantages of Team structures:
‒Conflicting loyalties among members
‒Excessive time spent in meetings
‒Effective use of time depends on quality of interpersonal relations,
group dynamics, and team management 2. Network Structures
Network structure consist of a core of full-time employees surrounded by
“networks” of outside contractors and partners that supply services. Beca
use the central core is relatively small and the surrounding networks can be
expanded or shrunk as needed, the network structure helps lower costs and
improve flexibility in dealing with changing environments. Instead of doing
everything for itself with full-time employees, the network organization emp
loys a minimum staff and contracts out as much work as possible . This is
done through strategic alliances, which are agreements with other firms to
pursue business activities of mutual interest. Some are outsourcing strategi
c alliances in which they contract to purchase important services from ano
ther organization. Others may be supplier strategic alliances that link busin
esses in preferred relationships that guarantee a smooth and timely flow of q
uality supplies among the partners.
Advantages of Network structures:
‒Firms can operate with fewer full-time employees and less complex internal systems
‒Reduced overhead costs and increased operating effi ciency
‒Permits operations across great distances
Disadvantages of Network structures:
‒Control and coordination problems may arise from network complexity
‒Potential loss of control over outsourced activities
‒Potential lack of loyalty among infrequently used contractors
‒Excessively aggressive outsourcing can be dangerous
3. Boundaryless Structures
Boundaryless structure eliminates internal boundaries among subsystems
and external boundaries with the external environment. The boundaryless st
ructure is a combination of the team and network structures, with the added
feature of “temporariness.” Key requirements:
‒Spontaneous teamwork and communication replace formal lines of autho rity
‒Meetings and information sharing happen continuously
‒Little hierarchy but lots of empowerment and technology utilization ‒Impermanence is accepted
The virtual organization calls an alliance into action to meet specific operat
ing needs and objectives; when the work is complete, the alliance rests until next called into action.
IV. Organizational Designs
Organizational design is the process of choosing and implementing structur
es to accomplish the organization’s mission and objectives. Because every
organization faces its own set of unique problems and opportunities, no one
design applies in all circumstances.
The best design at any moment is the one that achieves a good match bet
ween structure and situational contingencies—including task, technology, environment, and people. 1. Bureaucratic design
A classic bureaucracy is a form of organization based on logic, order, and
the legitimate use of formal authority. It is a vertical structure, and its dist
inguishing features include a clear-cut division of labor, strict hierarchy of
authority, formal rules and procedures. Bureaucracies were supposed to
be orderly, fair, and highly effi cient.
Contingency perspective in Organizational Design, management theory asks two contingency questions.
‒When is a bureaucratic form a good choice for an organization?
‒When it isn’t, what alternatives are available?
2. Adaptive organization
Perform well in uncertain environments that demand flexibility in dealing wit h changing conditions.
Minimum of bureaucratic features and encourages empowerment and teamw ork.
=>decentralized, with fewer rules and procedures, open divisions of labor,
wide spans of control, and more personal coordination
3. Mechanistic vs Organic Designs
Organizations with more mechanistic designs are vertical structures that ty
pically operate with centralized authority, many rules and procedures, a prec
ise division of labor, narrow spans of control, and formal means of coordinati on.
‒Mechanistic designs work best for organizations doing routine tasks in st able environments.
When organizations operate in dynamic and often uncertain environment
s, their effectiveness depends on being able to change with the times. Thi
s requires the more organic designs, horizontal structures with decentral
ized authority, fewer rules and procedures, less precise division of labor,
wider spans of control, and more personal means of coordination
‒Perform well in environments that demand flexibility in dealing with chan ging conditions.
4. Trends in Organizational Designs
‒Less Chain of command: “simple” and “streamlined” in order to
“allow employees to innovate and make quick decisions”
‒Wider spans of control run with flat structures that have fewer levels of management.
‒More Delegation and Empowerment: when delegating, managers
should give employees suffi cient authorities and equally responsibilities
Step 1—The manager assigns responsibility by carefully explaining the work
or duties someone else is expected to do. This responsibility is an expectatio
n for the other person to perform assigned tasks.
Step 2—The manager grants authority to act. Along with the assigned task, t
he right to take necessary actions ( for example, to spend money, direct the
work of others, or use resources) is given to the other person.
Step 3—The manager creates accountability. By accepting an assignment, th
e person takes on a direct obligation to the manager to complete the job as a greed.
‒Decentralization with Centralization : High speed computer networks a
nd advanced information systems allow managers at higher levels to easil
y stay informed about a wide range of day-to-day performance matters th roughout an organization.
Because they have information so readily available, they can allow mor
e decentralization in decision making.
‒Reduced Use of Staff : what is best for any organization will be a cost-eff
ective staff component that satisfies needs for specialized technical assis tance to line operations.
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