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Foundations of Organizational Structure

Foundations of Organizational Structure - Foundations of...

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Foundations of Organizational Structure Organizational Structure define how job tasks are formally divided, grouped or coordinated Six key elements that managers need to address when designing an organization’s structure: Work Specialization (division of labor) o Describe the degree to which activities in the organization are subdivided into separate jobs o Higher specialization increases efficiency and productivity Departmentalization o The basis by which jobs are grouped together o Can be grouped together by: Functions Product Geography Customer Chain of Command o An unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom o Authority refers to the rights inherent in a managerial position to give orders and expect the orders to be obeyed o The unity-of-command principle helps preserve the concept of an unbroken line of authority. If the unity of command is broken, an employee might have to cope with conflicting demands or priorities form several supervisors Span of Control o Determines the number of levels and managers an organization has, answers the question of how many employees a manager can efficiently and effectively direct o The trend in recent years has been toward a wider span of control, to reduce costs, cut overhead, speed up decision making, increase flexibility, get closer to customers and empower employees Centralization and Decentralization o
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