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The Organizational System

The Organizational System. Organizational Structure Organizational Designs . What is Structure?. The degree of complexity, formalization and centralization in the organization. Complexity is the degree of vertical, horizontal and spatial differentiation in an organization

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The Organizational System

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  1. The Organizational System • Organizational Structure • Organizational Designs

  2. What is Structure? • The degree of complexity, formalization and centralization in the organization. • Complexity is the degree of vertical, horizontal and spatial differentiation in an organization • Formalization is the degree to which jobs within the organization are standardized. • Centralization is the degree to which decision making in concentrated at a single point in the organization

  3. Classical View of Structure • Division of Labour – Specialization; breaking jobs down into simple and repetitions tasks • Unity of Command – a subordinate should have only one superior to whom he or she is directly responsible. • Responsibility - an obligation to perform • Line Authority – authority to direct the work of a subordinate

  4. Classical View of Structure…… • Chain of Command – the superior-subordinate authority chain that extends from the top of the organization to the lowest echelon • Staff Authority – positions that support, assist and advise line managers • Span of Control – the number of subordinates a manger can efficiently and effectively divert • Departmentation: grouping of activities on some common basis

  5. Departmentation by Function

  6. Departmentalization by Product

  7. Departmentalization by Customer

  8. Departmentalization by Geography

  9. Departmentalization by Process

  10. The coming of the New Organization • Rapid and unexpected change • Increasing diversity • Change in managerial behaviour • Adoption to computer technology

  11. The Mechanistic Structure

  12. The Mechanistic Structure…… • High horizontal differentiation • Rigid hierarchical relationships • Fixed duties • High formalization • Formalized communication channels • Centralized decision authority

  13. The Organic Structure

  14. The Organic Structure….. • Low horizontal differentiation • Collaboration (both horizontal and vertical) • Adaptable duties • Low formalization • Informal communication • Decentralized decision authority

  15. Why do Structures Differ? • Strategy

  16. Why do Structures Differ?..... • Size • Increase in the number of employees results in • High complexity • High formalization • decentralization

  17. Why do Structures Differ?.... • Technology

  18. Technology… Task variability Few Exceptions Many Exceptions Routine Engineering Well-defined Problem Analyzability 1 2 Craft Non routine 3 4 Ill-defined

  19. Technology… B C D Input A Output A. Long-linked Technology Transformational Process Client A Client B B. Mediating Technology Resources A B C D Transformational Process Output Feedback C. Intensive Technology

  20. Why do Structures Differ?..... Stable Environment Abundant simple Complex Scarce Dynamic Three Dimensional Model of the Environment

  21. Why do Structures Differ?... • Power control • An organization structure is the result of power struggle by internal constituencies who are seeking to further their interests

  22. Mintzberg`s five design configurations • The operating core: Employees who perform the basic work related to the production of products and services • The strategic apex: Top level managers who are charged with the overall responsibility of the organization • The middle level: Managers who connect the operating core to the strategic apex • The technosturcture: Analysts who have the responsibility for effecting certain forms of standardization in the organization • The support staff: People who fill the staff units, who provide indirect services for the organization

  23. Basic Elements

  24. Basic Subunits SubunitExample positions from a manufacturing firm. • Strategic Apex: Board of Directors, Chief Executive Officer • Techno structure: Strategic Planning, Personnel Training, Operations Research, Systems Analysis and Design • Support Staff: Legal Counsel, Public Relations, Payroll, Mailroom Clerks, Cafeteria Workers • Middle Line: VP Operations, VP Marketing, Plant Managers Sales Managers • Operating Core: Purchasing Agents, Machine Operators, Assemblers, Sales Persons, Shippers

  25. The Simple Structure • Low complexity • Low formalization • Centralized authority

  26. The Machine Bureaucracy • High in complexity, formalization and centralization • Key part is technostructure

  27. The Professional Bureaucracy • High in complexity, formalization • Low centralization

  28. The Divisional Structure • A set of autonomous units coordinated by central headquarters

  29. The Adhocracy • A structure characterized as low in complexity, formalization centralization

  30. The Matrix Structure Programs Academic departments Matrix Structure for a College of Business Administration

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