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session_6_10-11-10_ - Management 670 Session 6 Formal...

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Management 670 Session 6 Formal Organization--Structure
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Formal Structure vs. Informal Formal Structure vs. Informal Formal and Informal: Control Coordination Formal: structure (vertical control & horizontal coordination) Informal: culture (norms and values)
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General Structural General Structural Differences Differences Mechanistic Tasks specialized into separate parts Tasks are rigidly defined Strict hierarchy of authority and control; many rules Knowledge and control tasks are centralized at top Communication is vertical Organic Employees work together on common tasks Tasks are redefined and adjusted through employee teamwork Less hierarchy of authority & control; fewer rules Knowledge and control of tasks located throughout organization Communication is horizontal
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Formal Organizational Formal Organizational Structure Structure Reflects what people should do By definition the organization structure designates formal reporting relationships (number of levels in hierarchy & span of control). Identifies grouping of employees into departments and the departments in the organization. Includes any design of systems for communication, coordination, and integration across departments. Often reflected as an organization chart. Coordination and Control Vertical (control)& horizontal (coordination)
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Organization Design and Organization Design and Structural relationships Structural relationships The key question: How should an organization be designed to best implement strategy and to achieve the organization’s goals. Designing an organization for maximum efficiency and effectiveness. Structure usually follows (supports) strategy. Low-cost leadership with a Broad scope needs a structural design to support efficiencies Differentiation with a Narrow scope would need a different structural design.
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Structural Design: Balance of Structural Design: Balance of Vertical and Horizontal Vertical and Horizontal Vertical (control): Specialized tasks, hierarchy, rules & regulations, formal reporting, few teams and task forces, centralized decision making Designed for efficiency Horizontal (coordination): Shared tasks, less hierarchy, few rules, more communication, more teams and task forces, informal and decentralized decision making Designed for learning
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7 The Relationship of Organization Design The Relationship of Organization Design to Efficiency vs. Learning Outcomes to Efficiency vs. Learning Outcomes Horizontal Organization Designed for Learning Vertical Organization Designed for Efficiency Dominant Structural Approach Horizontal structure is dominant • Shared tasks, empowerment • Relaxed hierarchy, few rules • Horizontal, face-to-face communication • Many teams and task forces • Decentralized decision making Vertical structure is dominant • Specialized tasks • Strict hierarchy, many rules • Vertical communication and reporting systems • Few teams, task forces or integrators • Centralized decision making
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