Organizational structures. Lecture 7. Definitions of organizational structures. They define the levels of management in organizations; Org.structures define relationships between jobs; They define the centers of decisions in any organization.
The decision making is centralized at the top of the organization.
Each department is not an independent profit center;
Divisional design considers output such as product, customer or location.
Each division is independent profit center;Differences between functional and divisional design
Tasks are rigidly defined.
Strict hierarchy of authority and control is used as well as too many rules are applied.
Knowledge and control of tasks are centralized at the top of organizations.
Communication is vertical.
In the organic design, employees contribute to the tasks of the department;
Tasks are defined and adjusted through the employee interactions;
Less hierarchy and control and few rules;
Knowledge and control are located anywhere in the organizations;
Communication is horizontal.Differences between mechanistic and organic designs
Strategy: To protect the organization’s market
Problem: how to maintain strict control of the organization
Structure: Divisional design, centralized control.
Strategy: Seek high growth of the organization’s market
Problem: How to facilitate and coordinate numerous activities
Structure: Divisional design and decentralized control.Strategies by Chandler
Strategy: protect some markets while seeking growth in other markets
Problem: How to differentiate the organization’s structure and processes to accommodate both stable and dynamic areas of operation.
Structure: Matrix design, centralized control.
Woodward identified three categories of technology: