MANAGEMENT (6)

Organizational Structure

Ctlina RADU, MBA, PhD.

Bucharest University of Economic Studies

Organizational Structure
Proposed Quotes

"Every company has two

organizational structures
structures:: The formal one is written on the
charts;; the other is the everyday relationship of the men
charts
and women in the organization
organization.." - Harold S. Geneen
GROUPS

917

and

918::
918

GROUP 920:
920: I try to motivate people and align our
individual incentives with organizational incentives
incentives.. And
then let people do their best
best.. John Liu
GROUP 922:
922: "You have to, in your own life, get people to

want to work with you and want to help you.

you. The
organizational chart, in my opinion, means very little.
little. I
need my bosses' goodwill, but I need the goodwill of my
subordinates even more.
more." - Lloyd Blankfein

Organizing and
Organization Chart

Organizing = the process by which managers

establish working relationships among
employees to achieve goals;
Organizational structure = formal system of
task and reporting relationships;
Organization chart = A chart that shows the
structure of the organization including the title
of each managers position and, by means of
connecting lines, who is accountable to whom
and who has authority for each area.

Structure Key Terms (1)

Chain of command The continuous line of

authority that extends from upper levels of an
organisation to the lowest levels of the
organisation and clarifies who reports to who:
the management principle states that no
person should report to more than one boss
(unity of command);
command);
Span of control the number of subordinates a
manager can direct efficiently and effectively;

Structure Key Terms (2)

Authority the rights inherent in a managerial

position to give orders and expect them to be
obeyed;
Responsibility an obligation to perform
assigned activities;
Power An individuals capacity to influence
decisions.

Types of Organizational
Structures (1)

Functional structure
Function: people working together with
similar skills, tools or techniques to perform
their jobs; functional structure consists of
departments such as marketing,
production, and finance.
Di i i
Divisional
l structure
t t
Division: a collection of functions working
together to produce a product => product
structure, geographic structure, market
structure

Types of Organizational
Structures (2)

Matrix structure
Matrix: managers group people by function
and product teams simultaneously; this
structure results in a complex network of
reporting relationships; it is very flexible
and can respond rapidly to change; each
employee has two bosses,
bosses which can cause
problems.
Hybrid structure
Selection; one division may use a functional
structure, one geographic, etc.

Centralization versus
Decentralization

Centralization
A function of how much decision-making
authority is pushed down to lower levels
in an organization; the more centralized
an organization, the higher the level at
which decisions are made
D
Decentralization
t li ti
The pushing down of decision-making
authority to the lowest levels of an
organization

Centralization /
Decentralization Rules

Decentralize decisions that affect only one

division or area and that would take a long
time for upper management to make.
Ce t a e dec
Centralize
decisions
s o s tthat
at cou
could
d ad
adversely
e se y
affect the entire firm and that upper
management can fairly quickly and easily.

Formalization

Formalization refers to the degree to which

jobs within the organization are standardized
and the extent to which employee behavior is
guided by rules and procedures.
Highly
g y formalized jobs
j
offer little discretion
over what is to be done.
Low formalization means fewer constraints on
how employees do their work.

Mechanistic versus Organic

Organization
Mechanistic

Organic

High specialization

Cross-functional teams

Rigid departmentalization

Cross-hierarchical teams

Clear chain of command

Free flow of information

Narrow spans of control

Wide spans of control

Centralization

Decentralization

High formalization

Low Formalization

Factors Influencing
Organizational Structure
E i
Environment
t

Strategy

Design
or organizational
structure

Technology

Human
Resources

Job Design

Job Design refers to grouping tasks into

specific jobs, in order to obtain a division of
labor between workers that is effective and
efficient.
Job simplification: reduction of the tasks
each worker
eac
o e pe
performs;
o s;
Job enlargement: increasing tasks for a
given job in order to reduce boredom;
Job enrichment: increasing the degree of
responsibility a worker has over a job.

Job Characteristics Model

(1)
Five characteristics:
Skill variety:
i t employee
l
uses a wide
id range off
skills
Task identity: worker involved in all tasks of
job from beginning to end of the production
process
Task significance: worker feels the task is
meaningful to organization.
Autonomy: employee has freedom to schedule
tasks and carry them out.
Feedback: worker gets direct information
about how well the job is done.

Job Characteristics Model

(2)
Skill Variety
Task Identity
Task Significance

Meaningfulness
of work

Autonomy

Responsibility
for Work
Outcomes

Feedback

High:
Motivation
Performance
Satisfaction

Knowledge of
results of
work

Flexible Work Arrangements

(1)
Telecommuting: employees work at home and
are linked to the workplace by computer;
Compressed work-week: employees work
longer hours per day, but fewer days per
week;
Flextime (flexible work hours):employees are
required to work a specific number of hours a
week, but are free to vary those hours within
certain limits.

Flexible Work Arrangements

(2)
Job-sharing: the practice of having two or
more people split a full-time job;
Contingent workers: temporary, freelance or
contract workers whose employment is
contingent upon demand for their services.

*** QUOTES ABOUT OUR COURSE ***

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Organizational Structure
Proposed Quotes

"Every company has two

organizational structures
structures:: The formal one is written on the
charts;; the other is the everyday relationship of the men
charts
and women in the organization
organization.." - Harold S. Geneen
GROUPS

917

and

918::
918

GROUP 920:
920: I try to motivate people and align our

individual incentives with organizational incentives

incentives.. And
then let people do their best
best.. John Liu

GROUP 922:
922: "You have to, in your own life, get people to
want to work with you and want to help you.
you. The
organizational chart, in my opinion, means very little.
little. I
need my bosses' goodwill, but I need the goodwill of my
subordinates even more.
more." - Lloyd Blankfein

THANK YOU.
and
and

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10