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information relevant to the decision – lower down in org.Organizational BoundariesoThese choices define the boundaries of the org. and how it interacts w/ the environmentoThis means making choices about the extent of horizontal and vertical integration, make-versus-buy choices for different goods and services, and choices about strategic alliances w/ other firmsThe Informal StructureoRelationships among the members of org.s that develop based on proximity, liking, friendship, advice, and shared background and interestsThe Political StructureoLike the public, there are political coalitions within org.s that have competing agendas and viewpoints about what actions the org. should takeoUsually drawn across departmental, functional, or divisional linesThe Legitimate Basis of AuthorityoRank and title do countoOther sources granted legitimacy include ones’ expertise, charisma, social statusOrganization Structure – Basic FormsThe Functional FormoWhen an org. grows beyond the affairs that can be handled by a single group of people and one boss, it usually adopts a functional structureoActivities are grouped together by common function – ex. All engineers are located in engineering dept. oEmployees in each dept. get differentiated, adopting similar values, goals,and orientationsoCross-functional info processing falls on the general manager who mediates conflicts b/w functionsoThis form is best when the dominant competitive issues and goals of the org. stress functional expertise, efficiency, and quality.oWeaknessesInability to respond to environmental changes that require coordination b/w functionsEach employee has a restricted view of the overall goals of org.Diffuse accountability since profit/loss calculated for the firm as a wholeDivisional Form
oGroups diverse functions into divisionsAll the necessary resources such as manufacturing, R&D, and marketing contained within each divisionoDivisional structure is organized according to the various outputs of org.oOne can have product, region, market-segment, or client-based divisionsoThe divisional structure is excellent when environmental uncertainty is moderate to high and the dominant competitive issue and goals of the org. emphasize coordinated action to innovate, satisfy clients, or maintaina market segmentoDisadvantagesLoses economies of scaleCoordination b/w divisions can be difficultDivisions pursue their own goalsoWorks best in medium or large sized org.s that operate in heterogeneous environments that have adopted a diversified strategy of producing multiple products, operating in different markets, serving different customers, and selling products in different geographical regionsHybrid FormsoMost large corporations do not have either a pure functional structure or apure divisional structureoOne alternative is the Matrix FormBoth Divisional and Functional Structures are implemented simultaneouslyThe Division managers and function managers have equal authority within the org. and employees report to both of them