Overview
This lecture covers the basics of organizational structure in business, exploring key elements like job specialization, departmentalization, delegation, chain of command, and types of organizational culture.
Defining Organizations and Org Charts
- An organization is a group of two or more people working together to achieve common goals.
- Organizational charts (org charts) visually represent positions and reporting relationships, clarifying the chain of command.
Five Dimensions of Organizational Structure
- Job Specialization: Dividing organizational activities into distinct tasks assigned to specific people increases efficiency but can cause boredom.
- Departmentalization: Grouping jobs into manageable units by function, product, location, or customer type helps organize work.
- Delegation: Assigning tasks, granting authority, and ensuring accountability enables managers to distribute workload efficiently.
- Span of Management/Control: Refers to the number of subordinates reporting to a manager; wide span = flat structure, narrow span = tall structure.
- Chain of Command: The clear line of authority from the top to the bottom of the organization.
Types of Organizational Structures
- Line Structure: Direct chain of authority; simple, fast decisions; best for small organizations.
- Line and Staff Structure: Adds specialists (staff managers) to advise line managers; can cause authority conflicts if roles are unclear.
- Matrix Structure: Combines functional and product departmentalization; employees report to more than one supervisor, fostering flexibility and innovation but may lead to confusion.
- Network Structure (Virtual Organization): Core management contracts out most functions; highly flexible but may suffer from quality control and morale issues.
Organizational Culture
- Corporate culture involves the shared values, rituals, and norms within a firm.
- Four types of corporate culture: network, mercenary, fragmented, and communal.
- Culture impacts employee behavior, retention, and public perception.
- Indicators include physical settings, company messaging, guest reception, and work styles.
Committees in Organizations
- Ad Hoc Committee: Formed for short-term, specific tasks.
- Standing Committee: Permanent and ongoing responsibilities.
- Task Force: Temporary team for major problems or decisions.
- Committees improve decision-making but can be time-consuming and prone to compromise.
Informal Organization & Communication
- Informal organization arises from personal relationships and may shape workplace dynamics.
- The grapevine is an informal communication network, often faster than official channels, and should be acknowledged by management.
Key Terms & Definitions
- Job Specialization — Assigning specific tasks to individuals.
- Departmentalization — Grouping jobs based on function, product, location, or customer.
- Delegation — Assigning responsibility, granting authority, and ensuring accountability.
- Span of Management — Number of subordinates per manager.
- Chain of Command — Direct line of authority within an organization.
- Line Manager — Direct authority over subordinates.
- Staff Manager — Advisory role, no direct authority over subordinates.
- Matrix Structure — Employees have dual reporting lines.
- Network Structure — Core firm outsources many functions.
- Corporate Culture — Shared values and practices in an organization.
- Grapevine — Informal communication network.
Action Items / Next Steps
- Review organizational structure types and their advantages/disadvantages.
- Identify the type of organizational structure and culture in a business you know.
- Prepare to discuss how organizational culture can impact employee motivation and retention.