Designing Organizational Structures – Chapter 13
organizational structure
the division of labor as well as the patterns of coordination, communication,
workflow, and formal power that direct organizational activities
Coordinating mechanisms to ensure that everyone is working effectively toward the same objectives
Division of labor
Subdivision of work into separate jobs assigned to different people optimal level of specialization is
limited by the feasibility of
Coordination of work activities coordinating the work
Every organization uses one or more coordinating mechanisms
Coordination through informational communication
sharing information on mutual tasks; forming common mental models to synchronize work
activities
Formal hierarchy
assigning legitimate power to individuals, who then use this power to direct work processes and
allocate resources
Standardization
creating routine patterns of behavior or output by three distinct forms
1. standardized processes
standardizing work activities through job descriptions and procedures
e.g. flowcharts
2. standardized outputs
clearly defined goals and output measures
e.g. customer satisfaction, production efficiency
3. standardized skills
ensuring that job incumbents have the necessary knowledge and skills
e.g. by in-house training programs where employees learn how to perform tasks
Elements of Organizational Structure
Four elements that apply to every organization span of control
1. Span of control the number of people directly reporting
narrow span of control: very few people report directly to a manager to the next level above in the hierarchy
wide span of control: a manager has many direct reports
- if company A has a wider span of control (more direct reports per manager)
than company B, then company A necessarily has fewer layers of management
(i.e., flatter structure)
2. Centralization and decentralization centralization
- larger organizations typically decentralize; the degree to which formal decision authority is held by
a small group of people, typically those at the top of the
they disperse decision authority and power
organizational hierarchy
throughout the organization
3. Formalization
- older companies tend to become more formalized formalization
the degree to which organizations standardize
because work activities become routinized behavior through rules, procedures, formal
4. Departmentalization training, and related mechanisms
Six types of departmentalization
I. simple structure
the company employs only a few people and typically offer only one distinct product
organizational structure
the division of labor as well as the patterns of coordination, communication,
workflow, and formal power that direct organizational activities
Coordinating mechanisms to ensure that everyone is working effectively toward the same objectives
Division of labor
Subdivision of work into separate jobs assigned to different people optimal level of specialization is
limited by the feasibility of
Coordination of work activities coordinating the work
Every organization uses one or more coordinating mechanisms
Coordination through informational communication
sharing information on mutual tasks; forming common mental models to synchronize work
activities
Formal hierarchy
assigning legitimate power to individuals, who then use this power to direct work processes and
allocate resources
Standardization
creating routine patterns of behavior or output by three distinct forms
1. standardized processes
standardizing work activities through job descriptions and procedures
e.g. flowcharts
2. standardized outputs
clearly defined goals and output measures
e.g. customer satisfaction, production efficiency
3. standardized skills
ensuring that job incumbents have the necessary knowledge and skills
e.g. by in-house training programs where employees learn how to perform tasks
Elements of Organizational Structure
Four elements that apply to every organization span of control
1. Span of control the number of people directly reporting
narrow span of control: very few people report directly to a manager to the next level above in the hierarchy
wide span of control: a manager has many direct reports
- if company A has a wider span of control (more direct reports per manager)
than company B, then company A necessarily has fewer layers of management
(i.e., flatter structure)
2. Centralization and decentralization centralization
- larger organizations typically decentralize; the degree to which formal decision authority is held by
a small group of people, typically those at the top of the
they disperse decision authority and power
organizational hierarchy
throughout the organization
3. Formalization
- older companies tend to become more formalized formalization
the degree to which organizations standardize
because work activities become routinized behavior through rules, procedures, formal
4. Departmentalization training, and related mechanisms
Six types of departmentalization
I. simple structure
the company employs only a few people and typically offer only one distinct product
