Division of Labour & Coordination

Division of labour
Subdivision of work into separate
jobs assigned to different people

Coordination of work
Informal communication
Formal hierarchy
Standardization
Formalization
Goals/outputs
Training/skills

J. Player, New York Times

Writing topics
How is your organization structured?
Who reports to whom? Why do you think it
is structured in this way? What works? What
doesnt work? What would help the
organization function better given the
contingencies of org structure.

Organizational Structure and

Design
Chapter 16

DIVISION OF LABOUR: A SUMMARY

Division of Labour
High

Dimension

Low

Degree of specialization

General tasks

Highly specialized tasks

Typical organizational size

Small

Large

Economic efficiency

Inefficient

Highly efficient

Elements of Organizational Structure

Departmentalization

Span of
Control

Organizational
Structure
Elements
Formalization

Centralization

Span of Control
Number of people directly
reporting to the next level
Assumes coordination
through direct supervision
Wider span of control
possible when:
with other coordinating
methods
employees perform similar
tasks
tasks are routine

Tall versus Flat Organizations: Comparison

Flat hierarchy

Tall hierarchy

Chief
Executive

Chief
Executive

Relatively wide
span of control

Relatively narrow
span of control

Forces for (De)centralization

Centralization

Organizational crises
Management desire for control
Increase consistency, reduce costs

Complexity size, diversity

Desire for empowerment

Decentralization
8

DECENTRALIZATION: BENEFITS
WHEN LOW AND WHEN HIGH
Low Decentralization
(High centralization)

High decentralization
(low centralization)

Eliminates the additional responsibility not desired by people

performing routine jobs

Can eliminate levels of management,

making a leaner organization

Permits crucial decisions to be

made by individuals who have
the big picture

Promotes greater opportunities for

decisions to be made by people closest
to problems

Formalization
The degree to which organizations
standardize behaviour through rules,
procedures, formal training and related
mechanisms.
Strengths and limits?

10

Mechanistic vs. Organic Structures

Mechanistic

Organic

High formalization

Low formalization

Narrow span of control

Wide span of control

High centralization

Low centralization

11

MECHANISTIC VERSUS ORGANIC DESIGNS:

A birds eye view
Structure
Dimension

Mechanistic

Organic

Stability

Change unlikely

Change likely

Specialization

Many specialists

Many generalists

Formal rules

Rigid rules

Considerable flexibility

Authority

Centralized in
few top people

Decentralized, diffused
throughout the
organization

Effects of Departmentalization
How are employees and their activities grouped
together?
Areas of common supervision
Establishes work teams and supervision structure
Creates common resources, measures of
performance, etc
Encourages informal communication among people
and subunits

5 pure types of departmentalization

13

Simple
Few employees reporting directly to one
person (owner)
Owner

Employee

Employee

Employee

14

Functional Organizational Structure

Organizes employees around skills or
other resources (marketing, production)
Create subordinate goals
President

Finance

Production

Marketing

15

Divisionalized Structure
Organizes employees around outputs,
clients, or geographic areas
President

Enterprise
Systems

Laserjet
Solutions

Consumer
Products

16

Project-Based Matrix Structure

Employees are temporarily assigned to a specific
project team and have a permanent functional unit
President
Engineering
Manager

Marketing
Manager

Software
Manager

Project A
Manager
Project B
Manager
Project C
Manager
17

HYBRID structures
Parts are combined to maintain balance
of power and effectiveness across
functional, product, geographic and
client focused units

18

Features of Team-Based Structures

Structure is built around Self-directed work teams rather
than individuals
Teams organized around work processes
Very flat span of control
Very little formalization
Most supervisory activities are delegated to the team
Usually found within divisionalized structure
Very responsive and flexible; empowerment is high;
reduced need for managers; time consuming; ambiquity

19

Network/Virtual Organizational
Structure
Product
Development
Firm
(France)

Customer
Service
Firm
(U.S.A.)

Marketing
Firm
(U.K.)

Core
Firm
(Canada)
Production
Firm
(China)
Accounting
Firm
(Canada)

20

Contingencies
Organizational size
Technology
External environment
Organizational strategy

21

Types of Organizational Technology

High
Analyzability

Low
Analyzability

Assembly
Line

Engineering
Projects

Skilled
Trades

Scientific
Research

Low
Variety

High
Variety
22

Org. Environment & Structure

Dynamic
High rate of change
Use team-based, network,
or other organic structure

Complex
Many elements (such as
stakeholders)
Decentralize

Stable
Steady conditions,
predictable change
Use mechanistic structure

Simple
Few environmental
elements
Less need to decentralize

23

Org. Environment & Structure (cont)

Diverse
Variety of products,
clients, locations
Divisional form aligned
with the diversity

Hostile
Competition and resource
scarcity
Use organic structure for
responsiveness

Integrated
Single product, client,
location
Dont need divisional form

Munificant
Plenty of resources and
product demand
Less need for organic
structure

24