Organizational Structure and Design. Chapter 5 BUSM 12 Ms. Stewart. Organizational Structure. How job tasks are formally divided, grouped, and coordinated within an organization When managers develop or change the structure, they are engaged in organizational design. Purposes of Organizing.
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Organizational Structure and Design Chapter 5 BUSM 12 Ms. Stewart
Organizational Structure • How job tasks are formally divided, grouped, and coordinated within an organization • When managers develop or change the structure, they are engaged in organizational design
Departmentalization • This is the basis on which jobs are grouped together • Common forms: • Functional • Geographical • Product • Process • Customer
Functional Departmentalization • Groups jobs by functions performed
Geographical Departmentalization • Groups jobs on the basis of territory or geography
Product Departmentalization • Groups jobs by product line
Process Departmentalization • Groups jobs on the basis of product or customer flow
Customer Departmentalization • Groups jobs on the basis of customer who have common needs or problems
Line and Staff Managers • Line managers are responsible for essential activities of the organization, including production and sales • Staff Managers work in supporting activities of the organizations (such as Human Resources or Accounting)
Centralization • The degree to which decision making is concentrated at a single point in the organization • Example: If the top managers make the organization's key decisions with little to no input from below
Decentralization • The degree to which lower level employees provide input or actually make decisions