Chapter 5: Designing Organizatinaa trrutrre: Arthirity
and Cintria
Tall organizaton: An organizaton in which the hierarchy has many levels relatve to the size of the
organizatonn
Flat organizaton: An organizaton that has few levels in its hierarchy relatve to its sizen
Problems with Tall Hierarchies:
1n Communicaton roblems
2n Motvaton roblems
3n Bureaucratc costs
The Parkinson’s Law: “Work ex ands so as to fll the tme availablen”
Hoe meer mensen onder je, hoe hoger je statusn Een manager zal meer managers onder zich
willenn
Managers maken werk voor elkaarn Te veel managers resulteert in te veel tjd kwijt in monitoren
van andere managersn
Princi le of Minimum Chain of Command: An organizaton should choose the minimum number of
hierarchical levels consistent with its goals and the environment in which it o eratesn
S an of control: The number of subordinates a manager directly managesn
Factors Afectng the Sha e of the Hierarchy:
1n The level of horizontal diferentatonn
2n The level of decentralizatonn
3n The level of standardizatonn
4n The strength of the informal tes and relatonshi s that exist between organized membersn
Bureaucracy: A form of organizatonal structure in which eo le can be held accountable for their
actons because they are re4uired to act in accordance with rules and standard o eratng
roceduresn
The Princi les of Bureaucratc Structure:
1n A bureaucracy is founded on the conce t of ratinaa-aegaa arthirity
2n Organizatonal roles are held on the basis of teuhniuaa uimpetenuen
3n A role’s task respinsibiaity and deuisiin-making authority and its relatonshi to other roles
should be uaearay speuifedn
4n The organizaton of roles in a bureaucracy is such that eauh aiwer ifue in the hieraruhy is rnder
the uintria and srpervisiin if a higher ifuen
5n Rraes, standard iperatng priuedrres and nirms should be used to control the behaviour and
the relatonshi between roles in an organizatonn
6n Administratve acts, decisions and rules should be formulated and prt in writngn
Ratonal-legal authority: The authority a erson ossesses because of his or her ositon in an
organizatonn
,Management by objectves MBOO: A system of evaluatng subordinates on their ability to achieve
s ecifc organizatonal goals or erformance standards and to meet o eratng budgetsn
1n S ecifc goals and objectves are established at each level of the organizatonn
2n Managers and their subordinates together determine the subordinates’ goalsn
3n Managers and their subordinates eriodically review the subordinates’ rogress toward meetng
goalsn
Em owerment: The rocess of giving em loyees throughout an organizaton the authority to make
im ortant decisions and to be res onsible for their outcomesn
Self-managed teams: Work grou s consistng of eo le who are jointly res onsible for ensuring that
the team accom lishes its goals and who are em owered to lead themselvesn
Cross-functonal teams: Formal work grou s of em loyees from across and organizaton’s diferent
functons that are em owered to direct and coordinate the value-creaton actvites necessary to
com lete diferent rograms or rojectsn
Contngent workers: Worker who are em loyed for tem orary eriods by an organizaton and who
receive no indirect benefts such as health insurance or ensionsn
Peter Princi le: Je wordt door ge romoveerd toch het niet meer lukt, ofewel mensen ziten o
functes waar ze niet goed functonerenn
Greiner’s model of Organizatonal Growth:
Je gaat van de ene naar de andere fase tjdens het groeienn Tussen elke fase zit een crisis
waar je overheen moet:
Crisis 1: leiderscha scrisis; de founder is niet meer in staat alleen leiding te geven
Crisis 2: autonomiecrisis; managers willen meer zeggenscha hebben
Crisis 3: beheerscrisis; het wordt chaos door managers die verschillende beslissingen nemen
Crisis 4: bureaucratecrisis; je schiet door in het beheren, te geformaliseerd
Crisis 5: overlegcrisis; te veel overleg, je weet niet meer hoe je moet groeien
Crisis 6: identteitscrisis; naar buiten toe om verder te groeien; bedrijven o ko en
, Chapter 6: Designing Organizatinaa trrutrre: peuiaaizatin
and Ciirdinatin
Functonal structure: A design that grou s eo le together on the basis of their common ex ertse
and ex erience or because they use the same resourcesn
Divisional structure: A structure in which functons are grou ed together according to the s ecifc
demand of roducts, markets or customersn
Product structure:
Product division structure: A divisional structure in which a centralized set of su ort
functons services the needs of a number of diferent roduct linesn
Multdivisional structure: A structure in which su ort functons are laced in self-
contained divisionsn
Product team structure: A divisional structure in which s ecialists from the su ort
functons are combined into roduct develo ment teams that s ecialize in the needs of a
artcular kind of roductn
Geogra hic structure: A divisional structure in which divisions are organized according to the
re4uirements of the diferent locatons in which an organizaton o eratesn
Market structure: Aligns functonal skills and com etences with the roduct needs of diferent
customer grou sn
Self-contained division: A division that has its own set of su ort functons and controls its own
value-creatng actvitesn
Cor orate head4uarters staf: Cor orate managers who are res onsible for overseeing the actvites
of the divisional managers heading u the diferent divisionsn
Matrix structure: A structure in which eo le and resources are grou ed in two ways simultaneously:
by functon and by roject/p roductn
Two-boss em loyees: Em loyees who re ort to two su eriors: the roduct team manager and the
functonal managern
Multdivisional matrix structure: A structure that rovides for more integraton between cor orate
and divisional managers and between divisional managersn
Hybrid structure: The structure of a large organizaton that has many divisions and simultaneously
uses many diferent ty es or organizatonal structuren
E-commerce: Trade that takes lace between organizatons and between organizatons and
customers, using IT and Internetn
and Cintria
Tall organizaton: An organizaton in which the hierarchy has many levels relatve to the size of the
organizatonn
Flat organizaton: An organizaton that has few levels in its hierarchy relatve to its sizen
Problems with Tall Hierarchies:
1n Communicaton roblems
2n Motvaton roblems
3n Bureaucratc costs
The Parkinson’s Law: “Work ex ands so as to fll the tme availablen”
Hoe meer mensen onder je, hoe hoger je statusn Een manager zal meer managers onder zich
willenn
Managers maken werk voor elkaarn Te veel managers resulteert in te veel tjd kwijt in monitoren
van andere managersn
Princi le of Minimum Chain of Command: An organizaton should choose the minimum number of
hierarchical levels consistent with its goals and the environment in which it o eratesn
S an of control: The number of subordinates a manager directly managesn
Factors Afectng the Sha e of the Hierarchy:
1n The level of horizontal diferentatonn
2n The level of decentralizatonn
3n The level of standardizatonn
4n The strength of the informal tes and relatonshi s that exist between organized membersn
Bureaucracy: A form of organizatonal structure in which eo le can be held accountable for their
actons because they are re4uired to act in accordance with rules and standard o eratng
roceduresn
The Princi les of Bureaucratc Structure:
1n A bureaucracy is founded on the conce t of ratinaa-aegaa arthirity
2n Organizatonal roles are held on the basis of teuhniuaa uimpetenuen
3n A role’s task respinsibiaity and deuisiin-making authority and its relatonshi to other roles
should be uaearay speuifedn
4n The organizaton of roles in a bureaucracy is such that eauh aiwer ifue in the hieraruhy is rnder
the uintria and srpervisiin if a higher ifuen
5n Rraes, standard iperatng priuedrres and nirms should be used to control the behaviour and
the relatonshi between roles in an organizatonn
6n Administratve acts, decisions and rules should be formulated and prt in writngn
Ratonal-legal authority: The authority a erson ossesses because of his or her ositon in an
organizatonn
,Management by objectves MBOO: A system of evaluatng subordinates on their ability to achieve
s ecifc organizatonal goals or erformance standards and to meet o eratng budgetsn
1n S ecifc goals and objectves are established at each level of the organizatonn
2n Managers and their subordinates together determine the subordinates’ goalsn
3n Managers and their subordinates eriodically review the subordinates’ rogress toward meetng
goalsn
Em owerment: The rocess of giving em loyees throughout an organizaton the authority to make
im ortant decisions and to be res onsible for their outcomesn
Self-managed teams: Work grou s consistng of eo le who are jointly res onsible for ensuring that
the team accom lishes its goals and who are em owered to lead themselvesn
Cross-functonal teams: Formal work grou s of em loyees from across and organizaton’s diferent
functons that are em owered to direct and coordinate the value-creaton actvites necessary to
com lete diferent rograms or rojectsn
Contngent workers: Worker who are em loyed for tem orary eriods by an organizaton and who
receive no indirect benefts such as health insurance or ensionsn
Peter Princi le: Je wordt door ge romoveerd toch het niet meer lukt, ofewel mensen ziten o
functes waar ze niet goed functonerenn
Greiner’s model of Organizatonal Growth:
Je gaat van de ene naar de andere fase tjdens het groeienn Tussen elke fase zit een crisis
waar je overheen moet:
Crisis 1: leiderscha scrisis; de founder is niet meer in staat alleen leiding te geven
Crisis 2: autonomiecrisis; managers willen meer zeggenscha hebben
Crisis 3: beheerscrisis; het wordt chaos door managers die verschillende beslissingen nemen
Crisis 4: bureaucratecrisis; je schiet door in het beheren, te geformaliseerd
Crisis 5: overlegcrisis; te veel overleg, je weet niet meer hoe je moet groeien
Crisis 6: identteitscrisis; naar buiten toe om verder te groeien; bedrijven o ko en
, Chapter 6: Designing Organizatinaa trrutrre: peuiaaizatin
and Ciirdinatin
Functonal structure: A design that grou s eo le together on the basis of their common ex ertse
and ex erience or because they use the same resourcesn
Divisional structure: A structure in which functons are grou ed together according to the s ecifc
demand of roducts, markets or customersn
Product structure:
Product division structure: A divisional structure in which a centralized set of su ort
functons services the needs of a number of diferent roduct linesn
Multdivisional structure: A structure in which su ort functons are laced in self-
contained divisionsn
Product team structure: A divisional structure in which s ecialists from the su ort
functons are combined into roduct develo ment teams that s ecialize in the needs of a
artcular kind of roductn
Geogra hic structure: A divisional structure in which divisions are organized according to the
re4uirements of the diferent locatons in which an organizaton o eratesn
Market structure: Aligns functonal skills and com etences with the roduct needs of diferent
customer grou sn
Self-contained division: A division that has its own set of su ort functons and controls its own
value-creatng actvitesn
Cor orate head4uarters staf: Cor orate managers who are res onsible for overseeing the actvites
of the divisional managers heading u the diferent divisionsn
Matrix structure: A structure in which eo le and resources are grou ed in two ways simultaneously:
by functon and by roject/p roductn
Two-boss em loyees: Em loyees who re ort to two su eriors: the roduct team manager and the
functonal managern
Multdivisional matrix structure: A structure that rovides for more integraton between cor orate
and divisional managers and between divisional managersn
Hybrid structure: The structure of a large organizaton that has many divisions and simultaneously
uses many diferent ty es or organizatonal structuren
E-commerce: Trade that takes lace between organizatons and between organizatons and
customers, using IT and Internetn
