Organizational Boundaries o These choices define the boundaries of the org and

Organizational boundaries o these choices define the

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information relevant to the decision – lower down in org. Organizational Boundaries o These choices define the boundaries of the org. and how it interacts w/ the environment o This 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 firms The Informal Structure o Relationships among the members of org.s that develop based on proximity, liking, friendship, advice, and shared background and interests The Political Structure o Like the public, there are political coalitions within org.s that have competing agendas and viewpoints about what actions the org. should take o Usually drawn across departmental, functional, or divisional lines The Legitimate Basis of Authority o Rank and title do count o Other sources granted legitimacy include ones’ expertise, charisma, social status Organization Structure – Basic Forms The Functional Form o When an org. grows beyond the affairs that can be handled by a single group of people and one boss, it usually adopts a functional structure o Activities are grouped together by common function – ex. All engineers are located in engineering dept. o Employees in each dept. get differentiated, adopting similar values, goals, and orientations o Cross-functional info processing falls on the general manager who mediates conflicts b/w functions o This form is best when the dominant competitive issues and goals of the org. stress functional expertise, efficiency, and quality. o Weaknesses Inability to respond to environmental changes that require coordination b/w functions Each employee has a restricted view of the overall goals of org. Diffuse accountability since profit/loss calculated for the firm as a whole Divisional Form
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o Groups diverse functions into divisions All the necessary resources such as manufacturing, R&D, and marketing contained within each division o Divisional structure is organized according to the various outputs of org. o One can have product, region, market-segment, or client-based divisions o The 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 maintain a market segment o Disadvantages Loses economies of scale Coordination b/w divisions can be difficult Divisions pursue their own goals o Works 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 regions Hybrid Forms o Most large corporations do not have either a pure functional structure or a pure divisional structure o One alternative is the Matrix Form Both Divisional and Functional Structures are implemented simultaneously The Division managers and function managers have equal authority within the org. and employees report to both of them
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