Employer-employee authority relationship extends from the top of the organization to the lowest echelon. Staff authority are positions that have been created with some authority to support, assist, and advise those holding line authority. When an employee has to report to two managers, conflict may arise. Unity of command states that each employee should report to only one manager. There is a difference between power and authority. Authority refers to someone’s position within an organization. Power refers to an individual’s capacity to influence decisions. There are different types of power as can be seen in Figuur 17. Coercive power Power based on fear Reward power Power based on the ability to distribute something that others value Legitimate power Power based on one’s position in the formal hierarchy Expert power Power based on one’s expertise, special skill, or knowledge Referent power Power based on identification with a person who has desirable resources or personal traits Figuur 17 Types of power 4. Span of control There is a limit of how many employees a manager can efficiently and effectively supervise, this is his span of control. 5. Centralization versus decentralization Centralization is the degree to which decision making takes place at upper levels of the organization. Decentralization is the degree to which lower-level managers provide input or actually make decisions. 6. Formalization Formalization refers to how standardized an organization’s jobs are and the extent to which employee behavior is guided by rules and procedures. Figuur 16 Line versus staff authority Distributing prohibited | Downloaded by yeppe yeppee ([email protected]) lOMoARcPSD|2286197
Joost Goedhart BAT 930313267130 Figuur 18 Mechanistic versus organic organizations The contingency factors that favor either the mechanistic model or the organic model of organizational design Choice between two models, seen in Figuur 18, is determined by four contingent factors: strategy, size, technology and environment. - Elaborate strategy complex structure - Simple strategy simple structure - More than 2000 employees Mechanistic organizations - Less than 2000 employees Organic design - Focus on cost control Mechanistic structure - Focus on innovation Organic structure - Stable environments Mechanistic organizations - Dynamic environments Organic design What are some common organizational designs? Most companies start with an simple structure, which is an organizational design with low departmentalization, wide spans of control, authority centralized in a single person, and little formalization. When a business grows, it transforms into a functional structure, groups of similar or related specialties are put together, rules and regulations are formed, the organization becomes more bureaucratic.
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