DescribesixkeyelementsinorganizationaldesignContrastmechanisticandorganicstructuresDiscussthecontingencyfactorsthatfavoreitherthemechanisticmodelortheorganicmodeloforganizationaldesignDescribetraditional

organizationaldesignsDesigningOrganizationalStructureOrganizing-arrangingandstructuringworktoaccomplishanorganization’sgoals.OrganizationalStructure-theformalarrangementofjobswithinanorganization.OrganizationalDesign-aprocessinvolvingdecisionsaboutsixkeyelements:WorkspecializationDepartmentalizationChainofcommandSpanofcontrolCentralizationanddecentralizationFormalizationExhibit10-1:PurposesofOrganizingOrganizationalStructureWorkSpecializationThedegreetowhichtasksintheorganizationaredividedintoseparatejobswitheachstepcompletedbyadifferentperson.Overspecializationcanresultinhumandiseconomiessuchasboredom,fatigue,stress,poorquality,increasedabsenteeism,andhigherturnover.Exhibit10-2:EconomiesandDiseconomiesofWorkSpecializationDepartmentalizationbyTypeFunctionalGroupingjobsbyfunctionsperformedProductGroupingjobsbyproductlineGeographicalGroupingjobsonthebasisofterritoryorgeographyProcessGroupingjobsonthebasisofproductorcustomerflowCustomerGroupingjobsbytypeofcustomerandneedsOrganizationalStructure(cont.)ChainofCommand-thecontinuouslineofauthoritythatextendsfromupperlevelsofanorganizationtothelowestlevelsoftheorganization—clarifieswhoreportstowhom.OrganizationalStructure(cont.)Authority-therightsinherentinamanagerialpositiontotellpeoplewhattodoandtoexpectthemtodoit.Responsibility-theobligationorexpectationtoperform.UnityofCommand-theconceptthatapersonshouldhaveonebossandshouldreportonlytothatperson.Exhibit10-3:TheFiveCommon

FormsofDepartmentalizationExhibit10-3:TheFiveCommonFormsofDepartmentalization(cont.)Exhibit10-3:TheFiveCommonFormsofDepartmentalization(cont.)Exhibit10-4:ChainofCommand

andLineAuthorityExhibit10-5:Linevs.StaffAuthoritySpanofControlSpanofControl-thenumberofemployeeswhocanbeeffectivelyandefficientlysupervisedbyamanager.Widthofspanisaffectedby:SkillsandabilitiesofthemanagerEmployeecharacteristicsCharacteristicsoftheworkbeingdoneSimilarityoftasksComplexityoftasksPhysicalproximityofsubordinatesStandardizationoftasksSophisticationoftheorganization’sinformationsystemStrengthoftheorganization’sculturePreferredstyleofthemanagerExhibit10-6:ContrastingSpansofControlCentralizationCentralization

-thedegreetowhichdecisionmakingisconcentratedatupperlevelsintheorganization.Thisiscommoninorganizationsinwhichtopmanagersmakeallthedecisionsandlower-levelemployeessimplycarryoutthoseorders.DecentralizationDecentralization-whenanorganizationrelegatesdecisionmakingtomanagerswhoareclosesttotheaction.EmployeeEmpowermentIncreasingthedecision-makingauthority(power)ofemployeesExhibit10-7:CentralizationorDecentralizationFormalizationFormalization-thedegreetowhichjobswithintheorganizationarestandardizedandtheextenttowhichemployeebehaviorisguidedbyrulesandprocedures.Highlyformalizedjobsofferlittlediscretionoverwhatistobedone.Lowformalizationmeansfewerconstraintsonhowemployeesdotheirwork.Exhibit10-8:MechanisticVersus

OrganicOrganizationsContingencyFactorsStructuraldecisionsareinfluencedby:OverallstrategyoftheorganizationSizeoftheorganizationTechnologyuseemployedbytheorganizationDegreeofenvironmentaluncertaintyContingencyFactors(cont.)StrategyFrameworks:InnovationPursuingcompetitiveadvantagethroughmeaningfulanduniqueinnovationsfavorsanorganicstructuringCostminimizationFocusingontightlycontrollingcostsrequiresamechanisticstructurefortheorganizationContingencyFactors(cont.)StrategyandStructureAchievementofstrategicgoalsisfacilitatedbychangesinorganizationalstructurethataccommodateandsupportchange.SizeandStructureAsanorganizationgrowslarger,itsstructuretendstochangefromorganictomechanisticwithincreasedspecialization,departmentalization,centralization,andrules/regulations.ContingencyFactors(cont.)TechnologyandStructureOrganizationsadapttheirstructurestotheirtechnology.Woodward’sclassificationoffirmsbasedonthecomplexityofthetechnologyemployed:UnitproductionofsingleunitsorsmallbatchesMassproductionoflargebatchesofoutputProcessproductionincontinuousprocessofoutputsRoutinetechnology=mechanisticorganizationsNon-routinetechnology=organicorganizationsContingencyFactors(cont.)EnvironmentalUncertaintyandStructureMechanisticorganizationalstructurestendtobemosteffectiveinstableandsimpleenvironments.Theflexibilityoforganicorganizationalstructuresisbettersuitedfordynamicandcomplexenvironments.Exhibit10-9:Woodward’sFindingson

TechnologyandStructureTraditionalDesignsSimplestructureLowdepartmentalization,widespansofcontrol,centralizedauthority,littleformalizationFunctionalstructureDepartmentalizationbyfunctionOperations,finance,marketing,humanresources,andproductresearchanddevelopmentDivisionalstructureComposedofseparatebusinessunitsordivisionswithlimitedautonomyunderthecoordinationandcontroloftheparentcorporationExhibit10-10:Tra