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MANSGE. CHP10 T STUDY GUIDE PROFESSOR SU WHAT IS ORGANIZATIONAL STURCTURE 3 parts: Organizing is the deployment of organizational resources to achieve strategic goals. The deployment of resources is reflected in the organization's division of labor into specific departments and jobs, formal lines of authority, and mechanisms for coordinating diverse organization tasks. Organizing is important because it follows strategy—the topic of Part 3 of this book. Strategy defines what to do; organizing defines how to do it. Structure is a powerful tool for reaching strategic goals, and a strategy's success often is determined by its fit with or¬ ganizational structure. Organizing the Vertical Structure The organizing process leads to the creation of organization structure, which defines how tasks are divided and resources deployed. Organization structure is defined as (1) the set of formal tasks assigned to individuals and departments; (2) formal reporting relationships, including lines of authority, decision responsibility, number of hierarchical levels, and span of managers' control; and (3) the design of systems to ensure effective coordination of employees across departments.6 1. The set of formal tasks and formal reporting relationships provides a framework for vertical control of the organization. The characteristics of vertical structure are portrayed in the organization chart, which is the visual representation of an organization's structure. A sample organization chart for a water bottling plant is illustrated in Exhibit 10.1. The plant has four major departments— accounting, HR, production, and marketing. The organization chart delineates the chain of command, indicates departmental tasks and how they fit together, and provides order and logic for the organization. Every employee has an appointed task, line of authority, and decision responsibility. The following sections discuss several important features of vertical structure in more detail. 2. Work Specialization Organizations perform a wide variety of tasks. A fundamental principle is that work can be performed more efficiently if employees are allowed to specialize.7 Work specialization, sometimes called division of labor, is the degree to which organizational tasks are subdivided into separate jobs. Work specialization in Exhibit 10.1 is illustrated by the separation of production tasks into bottling, quality control, and maintenance. Employees within each department perform only the tasks relevant to their specialized function. When organiza¬ tions face new strategic issues, managers often create new positions or departments to deal with them. Remember This Managers in every organization face the question about how to organize for maximum efficiency and effectiveness.
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  • Spring '08
  • Horne

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