Chapter 15. Foundations of Organization Structure - FOUNDATIONS OF ORGANIZATION STRUCTURE Organizational Structure Defines how job tasks are formally

Chapter 15. Foundations of Organization Structure -...

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FOUNDATIONS OF ORGANIZATION STRUCTUREOrganizational Structure-Defines how job tasks are formally divided, grouped and coordinated-6 key elements:1.Work Specialization/Division of LaborDegree to which activities in the organization are subdivided into separate jobsIndividuals specialize in doing part of an activity not the entiretyMeans of making most efficient use of employees’ skillsLess time spent in changing tasks and less costly to find and train workers to do specific tasksIncreases efficiency and productivity by encouraging creation of inventionsHuman diseconomies – boredom, fatigue, stress, increased turnover/absenteeismNow productivity can be increased by enlarging scope of job activities2.DepartmentalizationBasis by which jobs are grouped together in an organization we can departmentalize jobsby:i.Function: advantage is that efficiencies are gained from putting like specialists togetherii.Product or service:major advantage is increased accountability for performance since all activities related to a specific product/service are under a single manageriii.Geography/territory: valuable when an organization’s customers are scattered over a large geographic area and have similar needsiv.Process: example going through different processes before getting a driving licensev.Customer:customers in each department have a common set of problems and needs best met by having specialists for each3.Chain of CommandIs an unbroken line of authority that extends from the top of the organization to the lowest level. It clarifies who reports to whomAuthority – rights inherent in a managerial position to give orders and have them obeyedUnity of command – idea that a subordinate should have only one superior to whom they are directly responsible. If broken employees have to cope with conflicting demands from several superiorsAdvancement in technology has enabled employees anywhere in the org to communicate with anyone else without formal channels by networked computers4.Span of ControlThe number of subordinates a manager can efficiently and effectively direct
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The wider the span the more efficient the organization in terms of cost but managers cannot spare time for the necessary leadership and support which reduces effectiveness and employee performance declinesNarrow span of control allows a manager to maintain close control. But, its expensive because the levels of management increase, it makes vertical communication more complex because of added levels of hierarchy that slow down decision making. Finally, it encourages tight supervision and employee autonomy reduces greatly.Trend: wider spans of control to reduce cost, speed up decision making, increase flexibility and empower employees.
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