Posted: August 3rd, 2022

Discussion

 Initial Postings: Read and reflect on the assigned readings for the week. Then post what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding in each assigned textbook chapter.

Your initial post should be based upon the assigned reading for the week, so the textbook should be a source listed in your reference section and cited within the body of the text. Other sources are not required but feel free to use them if they aid in your discussion.

Also, provide a graduate-level response to each of the following questions:

  1. Examine your own work life: consider the jobs you have held and organizations with which you have been associated. Based on your experiences, what type of organizational structure appears to suit you best? Why? Relate your own attitudes, behaviors, and values to the organizational structures described in this chapter.

[Your post must be substantive and demonstrate insight gained from the course material. Postings must be in the student’s own words – do not provide quotes!] [Your initial post should be at least 200+ words and in APA format (including Times New Roman with font size 12 and double spaced). 

Essentials of Organizational Behavior

Fifteenth Edition

Chapter 15

Foundations of

Organization Structure

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.

1

Learning Objectives
15.1 Identify seven elements of an organization’s structure.
15.2 Identify the characteristics of the simple structure, bureaucracy, and the matrix structure.
15.3 Identify the characteristics of the virtual structure, the team structure, and the circular structure.
15.4 Describe the effects of downsizing on organizational structures and employees.
15.5 Contrast the reasons for mechanistic and organic structural models.
15.6 Analyze the behavioral implications of different organizational designs.

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
What Is Organization Structure?
Learning Objective 15.1
Organizational Structure: defines how job tasks are formally divided, grouped, and coordinated
Key elements:
Work specialization
Departmentalization
Chain of command
Span of control
Centralization and decentralization
Formalization
Boundary spanning

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
Organizational structure depicts how job tasks are formally divided, grouped, and coordinated. The key elements of organizational structure include work specialization, departmentalization, chain of command, span of control, centralization and decentralization, formalization, and boundary spanning.
3

Key Design Questions and Answers for Designing the Proper Organizational Structure (Exhibit 15-1)

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
This exhibit presents each element as an answer to an important structural question.
The details are as follows:
Question 1: To what degree are activities subdivided into separate jobs?
Answer: Work specialization.
Question 2: On what basis will jobs be grouped together?
Answer: Departmentalization.
Question 3: To whom do individuals and groups report?
Answer: Chain of command.
Question 4: How many individuals can a manager efficiently and effectively direct?
Answer: Span of control.
Question 5: Where does decision-making authority lie?
Answer: Centralization and decentralization
Question 7: To what degree will there be rules and regulations to direct employees and managers?
Answer: Formalization.
Question 8: Do individuals from different areas need to regularly interact?
Answer: Boundary spanning.
4

Work Specialization
Work specialization: describes the degree to which activities in the organization are subdivided into separate jobs
Also known as division of labor
Benefits
Greater efficiency and lower costs
Costs
Human costs when carried too far
Job enlargement as a solution

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
A key part of organizational structure is understanding the degree to which tasks are divided into separate jobs or work specialization. The division of labor is helpful in creating the most efficient way to utilize employee skills, increase their skills, and maximize their input.
Work specialization can cause greater economies, but in some cases it can cause diminishing returns due to repetition that can lead to boredom. Job enlargement can be more effective at creating greater efficiencies than work specialization.
5

Economies and Diseconomies of Work Specialization (Exhibit 15-2)

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
This exhibit shows economies and diseconomies of work specialization.
6

Departmentalization
Departmentalization: basis by which jobs are grouped together so that common tasks can be coordinated
Common bases:
Functional
Product or service
Geography
Process and customer

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
Departmentalization defines how jobs are grouped together. When jobs are grouped, departments are formed. There are a number of options to choose from when grouping jobs; you could organize around function performed, product or service produced, location, or process and customer.
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Chain of Command
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: positional rights
Unity of command: one boss
Fewer organizations find this is relevant

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
The chain of command represents the line of authority present in decision making. Embedded in the chain of command is the inherent right of a manager to give orders and expect the orders to be followed. Unity of command is the idea that a subordinate should have only one superior to report to so that directions and the chain of command are clear.
As organizations change, this concept is becoming less and less important.
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Span of Control
Span of control: the number of employees a manager is expected to effectively and efficiently direct
Determines the number of levels and managers an organization has
Trend is toward wider spans of control
Wider span depends on knowledgeable employees
Affects speed of communication and decision making

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
Span of control looks at how many workers a manager can effectively direct towards organizational goals. Wider span allows for more efficiency because you need fewer managers. However, it can also limit the amount of time and direction managers can give to their employees. A narrow span can allow for more direction but can add layers of management, increase the complexity of the vertical communication, and encourage overly tight supervision, limiting employee autonomy.
9

Contrasting Spans of Control (Exhibit 15-3)

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
The exhibit illustrates that wider spans of control have fewer levels and fewer managers.
The trend in recent years has been toward wider spans of control.
Long Description:
Organizational level’s ranging from 1 to 7 is shown on a continuum next to the pyramids that depict members at each level based on assumed span of 4 and 8. In the continuum 1 is the highest level and 7 is the lowest level.
The details of the members at each level are as follows:
Organizational level 1 (Highest): Assuming Span of 4, 1; Assuming Span of 8, 1.
Organizational level 2: Assuming Span of 4, 4; Assuming Span of 8, 8.
Organizational level 3: Assuming Span of 4, 16; Assuming Span of 8, 64.
Organizational level 4: Assuming Span of 4, 64; Assuming Span of 8, 512.
Organizational level 5: Assuming Span of 4, 256; Assuming Span of 8, 4096.
Organizational level 6: Assuming Span of 4, 1024; Assuming Span of 8, NA.
Organizational level 7 (Lowest): Assuming Span of 4, 4096; Assuming Span of 8, NA.
Text below the pyramids reads:
Span of 4: Operatives is 4,096; Managers from level 1 to 6 is 1,365.
Span of 8: Operatives is 4,096; Managers from level 1 to 4 is 585.
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Centralization and Decentralization
Centralization: degree to which decision making is concentrated at a single point in the organization
Only includes formal authority: positional rights
Highly centralized when top managers make all the decisions
Decentralized when front line employees and supervisors make decisions

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
The fifth aspect of structure deals with centralization and decentralization. Centralization is the degree to which decision making is concentrated at a single point in the organization, typically at the top. Decentralization represents an organization that spreads decision making throughout the organization.
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Formalization
Formalization: degree to which jobs within the organization are standardized
High formalization: minimum discretion over what is to be done, when it is done, and how
Low formalization: freedom to act is necessary

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
Formalization is the degree to which jobs within the organization are standardized. When there is high formalization, workers have very little control over how they do their work, and they will be required to follow a number of rules and procedures. Lower formalization will tend to allow for different job behaviors to get the job done, giving workers more control over their work.
12

Boundary Spanning
Boundary spanning: when individuals form relationships outside their formally assigned groups
Liaison roles
Development activities
Job rotations
Organizational goals and shared identity

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
Organizations can use formal mechanisms to facilitate boundary-spanning activities through their structures.
One method is to assign formal liaison roles or develop committees of individuals from different areas of the organization.
Development activities can also facilitate boundary spanning. Employees with experience in multiple functions, such as accounting and marketing, are more likely to engage in boundary spanning.
Many organizations try to set the stage for these sorts of positive relationships by creating job rotation programs so new hires get a better sense of different areas of the organization.
A final method to encourage boundary spanning is to bring attention to overall organizational goals and shared identity concepts.
13

Common Organizational Frameworks and Structures
Learning Objective 15.2
Three common organizational frameworks:
Simple structure
Bureaucracy
Matrix structure

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
There are a number of organizational structures available to companies. We will look at a number of options over the next several slides.
14

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

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
The first and most basic structure is the simple structure. This structure has a low degree of departmentalization, wide spans of control, and centralized decision making with little formalization in job design.
This structure is difficult to utilize in anything other than small organizations.
15

Bureaucracy
Highly routine operating tasks achieved through specialization
Formal rules and regulations
Centralized authority
Narrow spans of control
Decision making follows the chain of command

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
Another type of organizational design is bureaucracy. In a bureaucratic organization, there will be a great deal of structure. The tasks will be completed through specialization, and they tend to be formalized through rules and regulations. Departments will be highly defined by function, and authority is centralized. Decision making will follow a strict chain of command and there will be narrow spans of control. The bureaucratic organization will be one that is highly defined and very controlled.
Bureaucratic structures may result in diminished autonomy and motivation for employees within these systems, making it difficult to develop and maintain motivation.
16

Matrix Structure for a College of Business Administration (Exhibit 15-4)

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
This slide shows an example of a matrix structure within a college.
The matrix structure is another common organizational design. This structure creates dual lines of authority and combines functional and product departments in a way to effectively meet organizational goals.
The key elements of the matrix structure is that it gains the interactions between the functional and product departments by coordinating complex and interdependent activities to help reach the goals set forth in an efficient manner, opening up avenues for new ideas to achieve the company’s mission. The matrix structure also breaks down the unity-of-command concept as the lines of authority are blurred.
17

Alternate Design Options
Learning Objective 15.3
Virtual Structure: a small core organization that outsources its major business functions
Highly centralized with little or no departmentalization
Provides maximum flexibility while concentrating on what the organization does best
Reduced control over key parts of the business

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
Virtual organizations (network, or modular structure) are developing as acceptable organizational structures. This structure offers a small core organization that outsources many of its major functions to competent suppliers. Virtual organizations are highly centralized with virtually no departmentalization to provide maximum flexibility, focusing on what the organization does best. This type of organization reduces control over some of the key parts of the business.
18

A Virtual Organization (Exhibit 15-5)

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
This exhibit shows a virtual organization in which management outsources all the primary functions of the business.
19

The Team Structure
Team structure:
Eliminates the chain of command
Has limitless spans of control
Replaces departments with empowered teams
Breaks down geographical barriers

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
Boundaryless organizations are set up to reduce the structure and tight control over work. They organize in a way to try to empower teams. They eliminate vertical and horizontal boundaries, as well as geographic boundaries. Boundaryless organizations also try to break down external barriers to customers and suppliers through their structure and style of communication. These organizations also break down geographical barriers.
20

The Circular Structure
Circular structure: top management is at the center of the organization with its vision spreading outward in rings grouped by function
May be confusing for employees
May be used to spread CSR initiatives

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
Picture the concentric rings of an archery target. In the center are the executives; radiating outward in rings grouped by function are the managers, then the specialists, then the workers. This is the circular structure.
21

The Leaner Organization: Downsizing
Learning Objective 15.4
Downsizing: a systematic effort to make an organization leaner by selling off business units, closing locations, or reducing staff
Controversial because of the negative impact on employees
Impact on organizational performance has been very controversial

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
In the midst of tough economic times and the need for companies to be leaner, downsizing has been on the rise.
Downsizing is a systematic effort to make an organization leaner by ridding itself of business units, excessive locations, and staff. It has been very controversial because of the strong negative impact on employees. Because of this negative impact, the link to performance enhancement has been questioned.
22

Mechanistic versus Organic Models (Exhibit 15-6) Learning Objective 15.5

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
This slide show two extreme models of organizational design – the mechanistic model and the organic model. Several factors, discussed next, influence which type of structure is best for an organization.
The mechanistic model is a structure characterized by extensive departmentalization, high formalization, a limited network, and centralization.
The organic model is flat, uses cross-hierarchical and cross-functional teams, has low formalization, processes a comprehensive information network, and relies on participative decision-making.
Long Description:
The details of the schematic are as below: 
In the schematic, the mechanistic model is shown as a hierarchical tree structure. The features listed at the bottom read as follows: High specialization, rigid departmentalization, clear chain of command, narrow spans of control, centralization, and high formalization.
In the schematic, the organic model is represented as a series of four interconnected teams. The features listed at the bottom read as follows: Cross-functional teams, cross-hierarchical teams, free flow of information, wide spans of control, decentralization, and low formalization.
23

The Strategy-Structure Relationship
(Exhibit 15-7)

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
Exhibit 15-7 describes the structural option that best matches each strategy.
Structures differ for a number of reasons. The first is that structure is set up to facilitate the strategy of the organization. If your organization is focusing on innovation as a key value, then it may be best served by an organic structure. Whereas, if the strategy emphasizes minimizing costs, a mechanistic structure will work better. Strategy should always dictate structure instead of structure dictating strategy.
Long Description:
The details are as below:
Innovation: Organic; A loose structure; low specialization, low formalization, decentralized.
Cost minimization: Mechanistic; Tight control; extensive work specialization, high formalization, high centralization.
Imitation: Mechanistic and organic; Mix of loose with tight properties; tight controls over current activities and looser controls for new undertakings.

24

More Determinants of Structure
Organization Size – move toward mechanistic structure as size increases
Technology – routine activities prefer mechanistic structures, non-routine prefer organic structures
Environment
Capacity
Volatility
Complexity
Institutions – guidelines for appropriate behavior

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
Structures differ for a number of reasons.
Structures will also differ by organization size; the larger the organization, the more likely it will be mechanistic. Technology also influences structure. The more routine the activities, the more mechanistic the structure should be.
Structures will also differ based on the environment in which they exist. The more dynamic the environment, the more organic the structure will need to be to facilitate quick decisions and fast turnaround. Finally, institutions play a role in organizational design by acting as guidelines for appropriate behavior.
25

The Environment (Exhibit 15-8)

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Exhibit 15-8 summarizes our definition of the environment along its three dimensions.
26

Organizational Designs and Employee Behavior
Learning Objective 15.6
Cannot generalize any link between structure and performance
Consider employee preferences for:
Span of control
Centralization
Predictability versus autonomy
National culture
High power distance cultures accept mechanistic structures

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
You cannot generalize. The effect of organizational design on employee behavior must address individual differences.
Organizational designs are not a good predictor of employee behavior. Span of control has mixed results depending on individual differences in employees and organizational factors. There is a strong link between centralization and job satisfaction. In general, less centralized organizations have a greater amount of autonomy and that appears positively related to job satisfaction. People are attracted to, are selected by, and stay with organizations that suit their personal characteristics.
Research suggests that national culture may influence organizational structure. In particular, organizations with people from high-power distance cultures typically find that employees are more accepting of mechanistic structures than employees from low power-distance countries.
Various factors will influence workers in their job satisfaction and their willingness to stay with an organization.
27

Implications for Managers
Your structure should be purpose driven.
Consider the design features that relate to specialization, departmentalization, authority, formalization, and boundary spanning to implement your strategy.
Match your structure decision to your strategy.
Downsize only if necessary.
Aim for an organic structure if your strategy prioritizes innovation, a mechanistic structure if your strategy prioritizes cost minimization, and a combination of the two if your strategy prioritizes imitation.

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
Structure does have an impact on both the attitudes and behaviors of the people within the organization, so it is important that managers effectively select and utilize structure within their organizations.
28

Discussion Questions
Discuss your organizational structure preferences. Why did you make these choices?
What has been the impact on many organizations forced to downsize during the COVID-19 pandemic?
Why do you think empowerment and transformational leadership tend to be more effective in organic structures?

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.
Copyright
This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials.

Copyright © 2022, 2018, 2016 Pearson Education, Inc. All Rights Reserved.

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