Chapter 7- Organization Design - Organization Design Wed...

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Organization Design Wed Jan 13, 2010 Org Structure Org Design Changes at Sara Lee
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Organizational Structure Division of labour and the patterns of coordination, communication, work flow, and formal power that direct the activities of the organization. The specification of the jobs to be done within a business and how those jobs are related to one another This is a prime example of formal organization arrangements.
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Division of Labour Job specialization determining who will do what task a narrow subset of tasks required to complete the product or service ancreases work efficiency Why?
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Specialization Identify the specific jobs required and designate who will do what Small companies have fewer employees so less specialization As organizations grow, they can hire more employees and become more efficient through specialization Advantages Tasks performed more efficiently Jobs easier to learn Easier to replace people Disadvantages Narrow jobs Boredom Lose sight of overall organization
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Chain of Command Organizational charts illustrate the company s organizational structure Shows employees’ positions and how they relate to each other Demonstrates the flow of decision making power
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Types of Authority Line authority Staff authority Committee/ team authority
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Line Authority The chain of command is direct and is indicated by a solid line in the organization chart Authority flows in a straight line Authority flows from top to bottom Line departments departments linked directly to the production and sale of a product whose success is vital to the firm Line employees the “doers” in a department who must make the right decisions in order make the firm a success
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A typical org chart President Vice President Marketing Vice President Production Vice President Finance Alberta Plant Manager Quebec Plant Manager Nova Scotia Plant Manager Industrial Products Consumer Products Industrial Products Consumer Products Vice President Marketing Consumer Products Industrial Products
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Staff Authority Staff that advise or provide support to line managers do not have line authority to make decisions assist line managers in doing their jobs more efficiently Staff authority is indicated by a dotted line in the organization chart legal staff, marketing research
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Committee & Team Authority Authority is granted to committees or work teams Committee members may include top managers and specially selected employees Committees may be permanent or temporary Teams need to have decision making authority in order to complete their tasks efficiently Teams will plan their work and complete the task independently
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Coordinating Work Activities through informal communication Sharing information on mutual tasks Forming common mental models of what needs to be done and how Face-to-face communication makes this form very efficient Eg. concurrent engineering by ephemeral teams
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