A large organization contains several types of structure at different levels Issues in Organization structure 1 Formal and Informal 2 Centralized and Decentralized 3 Tall and flat 4 Span of control 5. FormalizationStandardization
Lecture Unit Organizations and Behaviour Other Issues in Organization Structure Scope for Today 1.Issues in Organization Theory 2.Assignment – Case Study New Method for Sharing Teaching Material itpf02.ba@gmail.com pass: itpf02ba itpf03.ba@gmail.com pass: itpf03ba Types of Organization Structure Simply Structure (no structure !) Functional Structure Team Structure Matrix Structure Division Structure (Federal Decentralization) Stimulated Decentralization Network or Systems Structure (non – organization) A large organization contains several types of structure at different levels Issues in Organization structure Formal and Informal Centralized and Decentralized Tall and flat Span of control Formalization/Standardization Formal vs Informal Page 58 – 59 of Text book Formal Structure CEO Information Technology Authority Purchasing Reporting Incoming Inspection Human Resource s Communication Assembly Assembly Assembly Division of labour Assembly Quality Control Sales Formal Structure describes how work is organized (division of labour), authority (Unity of Command), and how information is passed down (Scalar Chain of Command) Informal Structure There is an informal structure that exists alone side the formal structure – social network, cliques, and temporary networks - Unwritten Rules (How we things here) - Informal channel of communication (Grapevine) Delayering Reduce the number of layers Very little value added there is by the intermediate level It is much feasible now with advances in information technology What is the minimum number of layers 3? 5? 6? Centralization vs Decentralization The degree of concentration of authority Decentralize if it works Certain Functions Should be Centralized Corporate Finance Purchasing e.g Wal-mart Other – The agency successfully managed Yellow River in China There should be reasons and designed into organization structure Yellow River in China Its successful taming required a centraliz Span of control Number of subordinates immediate report to the superior Span of Control Information Technology Purchasing CEO Incoming Inspection Human Resource s Assembly Assembly Span of Control for CEO = Assembly Assembly Quality Control Sales Excluding ‘supervisory’, span of control should not be too large, to This assumption is being challenged by Sergio Marchionne CEO Fiat and Chrysler After Fiat taking over of Chrysler, he has all his top 25 Chrysler executives – everyone from engineering to and manufacturing to legal and HR – report directly to him Sergio Marchionne Formalization/Standardizatio n Formalization is the degree to which organizations standardize behavior through rules, procedures, formal training, And related mechanism Examples The Story of Asean Hotel Formalization/Standardizatio n Formalization increases efficiency and compliance Dark Side of Formalization Older and larger companies tend to have formalization, and less flexibility, creativity And given a source of stress Formalization The key issue is how to identify good practice (quantification), and formalize un-formalize it ... Structure Simply Structure (no structure !) Functional Structure Team Structure Matrix Structure Division Structure (Federal Decentralization) Stimulated Decentralization Network or Systems Structure. .. Formalization/Standardization Formal vs Informal Page 58 – 59 of Text book Formal Structure CEO Information Technology Authority Purchasing Reporting Incoming Inspection Human Resource s Communication... Corporate Finance Purchasing e.g Wal-mart Other – The agency successfully managed Yellow River in China There should be reasons and designed into organization structure Yellow River in China Its