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Foundations ofOrganization Structure

Chapter 14

Essentials of Organizational Behavior, 9/e

Stephen P. Robbins/Timothy A. Judge

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After studying this chapter, you should be able to:

1. Identify the six key elements that define an organization’s structure

2. Explain the characteristics of a bureaucracy3. Describe a matrix organization4. Explain the characteristics of a virtual organization5. Summarize why managers want to create boundaryless

organizations6. Contrast mechanistic and organic structural models7. List the factors that favor different organization

structures8. Explain the behavioral implications of different

organization structures

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Organization Structure

• Defines how job tasks are formally divided, grouped, and coordinated

• Key elements to be addressed: Work specialization Departmentalization Chain of command Span of control Centralization Decentralization Formalization

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Work Specialization

• Division of labor

• Describes the degree to which activities in the organization are subdivided into separate jobs

• Creates problems when carried too far

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Departmentalization

• Basis by which jobs are grouped together Function Product Geography Process Customer

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Chain of Command

• Unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom

• Authority

• Unity of Command principle

• Fewer organizations find this is effective

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Span of control

• Determines the number of levels and managers an organization has

• Trend in recent years has been toward wider spans of control

• Wider span depends on employees knowing their jobs well

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Centralization and Decentralization

• Centralization - degree to which decision making is concentrated at a single point in the organization

• Highly centralized is when top managers make all the decisions

• More decentralized is when front line employees and managers make decisions

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Formalization

• Degree to which jobs within the organization are standardized

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Common Organizational Designs

• Simple structure

• Bureaucracy

• Matrix structure

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Simple Structure

• Low degree of departmentalization

• Wide spans of control

• Authority centralized in a single person

• Little formalization

• Difficult to maintain in anything other than small organizations

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Bureaucracy

• Highly routine operating tasks achieved through specialization

• Formalized rules and regulations• Tasks that are grouped into functional

departments• Centralized authority• Narrow spans of control• Decision making that follows the chain of

command

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Matrix Structure

• Combines two forms of departmentalization Functional Product

• Dual chain of command• Advantages: facilitates coordination and

efficient allocation of specialists• Disadvantages: possible confusion, fosters

power struggles, increased stress

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Matrix Structure for a Collegeof Business Administration

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New Options

• The Team Structure• The Virtual Organization – a small core

organization that outsources major business functions

• The Boundaryless Organization – eliminates the chain of command, has limitless spans of control, replace departments with empowered teams

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Mechanistic versus Organic Structures

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Determinants of Organization Structure

• Strategy Dimensions: Innovation Strategy Cost-Minimization Strategy Imitation Strategy

• Organization Size

• Technology

• Environmental Uncertainty

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Organizational Structure and Employee Behavior

• Consider employee preferences for: Work Specialization Span of Control Centralization

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Implications for Managers

• Structural relationships impact attitude and behavior

• Structure constrains employees

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Summary

1. Identified the six key elements that define an organization’s structure

2. Explained the characteristics of a bureaucracy3. Described a matrix organization4. Explained the characteristics of a virtual organization5. Summarized why managers want to create

boundaryless organizations6. Contrasted mechanistic and organic structural models7. Listed the factors that favor different organization

structures8. Explained the behavioral implications of different

organization structures