11/20/2024
MANAGEMENT
TRAN THI BICH NHUNG
Tranthibichnhung.cs2@[Link] - 0938028655
Contents
Chapter 1: Introduction to management
Chapter 2: Values and organizational culture
Chapter 3: Managing business environment
Chapter 4: Managerial decision making
Chapter 5: Planning and Strategic management
Chapter 6: Designing organization structure
Chapter 7: Motivating and rewarding employees
Chapter 8: Leadership
Chapter 9: Monitoring and controlling
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CHAPTER 6: DESIGNING
ORGANIZATIONAL STRUCTURE
TRAN THI BICH NHUNG
Tranthibichnhung.cs2@[Link] - 0938028655
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Learning Objectives
1. Describe six key elements in organizational design.
Know how to delegate work to others and develop
your skill at delegating.
2. Contrast mechanistic and organic structures.
3. Discuss the contingency factors affect structural choice
4. Describe traditional organizational designs.
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Purposes of organizing
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Designing Organizational Structure
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SIX ELEMENTS
Organizational Design – a process involving
decisions about six key elements:
• Work specialization
• Departmentalization
• Chain of command
• Span of control
• Centralization and decentralization
• Formalization
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Organizational Design
1. Work specialization – dividing work activities
into separate job tasks.
• Early proponents of work specialization
believed it could lead to great increases in
productivity.
• Overspecialization can result in human
diseconomies such as boredom, fatigue,
stress, poor quality, increased absenteeism,
and higher turnover.
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Organizational Design
2. Departmentalization
– the basis by which jobs are grouped together.
• Functional • Process
– Grouping jobs by functions – Grouping jobs on the basis
performed of product or customer
• Product flow
– Grouping jobs by product line • Customer
• Geographical – Grouping jobs by type of
– Grouping jobs on the basis of customer and needs
territory or geography
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Organizational Design
Discuss types of departmentalization as
well as advantages and disadvantages
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Organizational Design
2. Departmentalization
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Organizational Design
2. Departmentalization
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Organizational Design
2. Departmentalization
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Organizational Design
2. Departmentalization
- Increasing use of customer departmentalization
- Cross-functional team – a work team composed
of individuals from various functional specialties.
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Organizational Design
3. Chain of Command
Chain of Command – the continuous line of
authority that extends from upper levels of an
organization to the lowest levels of the
organization—clarifies who reports to whom.
- Authority
- Responsibility
- Unity of command
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Organizational Design
3. Chain of Command
- Authority
the rights inherent in a managerial position to
tell people what to do and to expect them to
do it.
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Organizational Design
3. Chain of Command
- Authority
• Acceptance theory of authority – the view
that authority comes from the willingness
of subordinates to accept it.
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Organizational Design
Line and staff authority
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Organizational Design
3. Chain of Command
- Responsibility: the obligation or expectation
to perform
- Unity of command: the management principle
that each person should report to only one
manager
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Organizational Design
4. Span of control
the number of employees who can be effectively
and efficiently supervised by a manager.
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Organizational Design
5. Centralization and Decentralization
Centralization – the degree to which decision-making is
concentrated at the upper levels of the organization.
Decentralization – the degree to which lower-level
employees provide input or actually make decisions.
Employee empowerment – giving employees more
authority (power) to make decisions.
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Organizational Design
5. Centralization and Decentralization
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Organizational Design
6. Formalization
The degree to which jobs within the organization are
standardized and the extent to which employee behavior is
guided by rules and procedures.
– Highly formalized jobs offer little discretion over what
is to be done.
– Low formalization means fewer constraints on how
employees do their work.
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Mechanistic and organic structures
Mechanistic organization – an organizational
design that’s rigid and tightly controlled.
Organic organization – an organizational design
that’s highly adaptive and flexible.
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Mechanistic and organic structures
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Contingency factors
Strategy and Structure
– Changes in corporate strategy should lead to changes
in an organization’s structure that support the strategy.
– Certain structural designs work best with different
organizational strategies.
• The organic structure works well for organizations
pursuing meaningful and unique innovations.
• The mechanistic organization works best for
companies wanting to tightly control costs.
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Contingency factors
Size and Structure
– as an organization grows larger, its structure
tends to change from organic to mechanistic with
increased specialization, departmentalization,
centralization, and rules/regulations.
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Contingency factors
Technology and Structure
– Organizations adapt their structures to their
technology.
– Woodward’s classification of firms based on
the complexity of the technology employed:
• Unit production of single units or small batches.
• Mass production of large batches of output.
• Process production in continuous process of out
puts.
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Contingency factors
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Contingency factors
Environmental Uncertainty and Structure
– Mechanistic organizational structures tend to
be most effective in stable and simple
environments.
– The flexibility of organic organizational
structures is better suited for dynamic and
complex environments.
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Traditional organizational designs
Simple structure – an organizational design with
low departmentalization, wide spans of control,
centralized authority, and little formalization.
Functional structure – an organizational design
that groups together similar or related occupational
specialties.
Divisional structure – an organizational structure
made up of separate, semiautonomous units or
divisions.
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Traditional organizational designs
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Organizing for flexibility
Team structure: is one in which the entire organization is
made up of work teams that do the organization’s work
- employee empowerment is crucial because no line of
managerial authority flows from top to bottom
Matrix and project structures:
- Other popular contemporary designs are the matrix and
project structures. The matrix structure assigns specialists from
different functional departments to work on projects led by a
project manager.
- Many organizations use a project structure, in which
employees continuously work on projects
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