Weekly Faculty Guide
Week Three Study Guide: Organizing
Readings and Key Terms
• Ch. 10 of Management
o Organizational structure
o Organizational design
o Work specialization
o Departmentalization
o Cross-functional team
o Line authority
o Staff authority
o Span of control
o Centralization
o Decentralization
o Employee empowerment
o Formalization
o Mechanistic organization
o Organic organization
• Ch. 11 of Management
o Team structure
o Matrix structure
o Project structure
o Boundaryless organization
o Virtual organization
o Network organization
o Learning organization
o Collaboration
o Task force
o Open innovation
o Strategic partnerships
o Flexible work arrangements
o Contingent workers
• Ch. 13 of Management
o Groups
o Stages of group development
o Roles
o Norms
o Groupthink
o Social loafing
o Group cohesiveness
o Functional conflict
o Dysfunctional conflict
o Work teams
Content Overview
• Organizational structure
o Organizational structure refers to how an organization arranges jobs in an organization.
o Few topics in management have changed so much in the past few years as organizational structure.
• Six key elements of organizational design
o Work specialization
• Work specialization is dividing work activities into separate job tasks that allows workers to specialize in a specific skill so the organization can make efficient use of employee skill sets.
• The division of labor can cause boredom, fatigue, stress, and the like, and it no longer leads to productivity.
o Departmentalization
• Departmentalization is the basis by which jobs are grouped together.
• Common types of departmentalization include by function, by geographical area, by product line, by product or customer flow, and by specific customer needs.
• Organizations may organize departments in different ways.
• Cross-functional teams may also exist, where a team within the organization consists of members from several different departments.
o Chain of command
• Chain of command clarifies who reports to whom within the organization.
• Authority can appear in one of the two following forms:
o Line authority is where a manager directs an employee in his or her chain of command.
o Staff authority is where a manager works with other managers to complete the organization’s tasks.
• Many traditional chain of command concepts are no longer found necessary, if proper communication exists within the organization.
o Span of control
• Span of control looks at how many employees a manager can efficiently and effectively supervise.
• All other things being equal, the larger the span of control, the more efficient the organization.
• The ideal span of control number is different for each organization, and it depends on employee skill level and the characteristics of the work.
o Centralization and decentralization
• Centralization occurs when most of the decision making takes place at the organization’s upper levels without input from lower level employees.
• Decentralization occurs when more lower level employees have input into or make decisions themselves.
• In recent years, there has been a push toward decentralization to make organizations more efficient and effective.
• Employee empowerment is the trend toward decentralization, which gives employees more power over decisions.
o Formalization
• Formalization refers to how jobs roles are structured and the extent to which employee behavior is governed by rules and procedures.
• Although some formalization will probably always be needed, organizations today are becoming increasingly less formal.
• Mechanistic and organic structures
o A mechanistic organization is structured like a traditional bureaucracy.
• Specialization is high.
• Departmentalization is rigid.
• Chain of command is clear.
• Span of control is narrow.
• A high level of centralization is used.
• Formalization is high.
o An organic organization is a highly adaptive.
• Cross-functional and cross-hierarchical teams are used.
• A free flow of information occurs.
• The spans of control are wide.
• The formalization is low.
• Decentralization is the standard.
• Contingency factors affecting structural choice:
o Strategy of the organization
o Business size
o Technology used in the organization.
o Degree of environmental uncertainty
• Traditional organizational designs
o The traditional organizational design is used when a firm is created may change as the firm grows and expands.
o Traditional organizational designs include the simple structure, a functional structure, and a divisional structure.
• Contemporary organizational designs
o Team structure
• Team structure is when an organization consists of work teams that complete the organization’s work.
• Employee empowerment is crucial in team structures.
• In large organizations, team structures complement a traditional functional or divisional structure.
o Matrix and project structures
• In a matrix structure, specialists from different functional departments work on projects led by a project manager.
• Matrix structures create a dual chain of command, as employees have their regular manager plus their project manager.
• IA project structure is a flexible organizational design that has employees work in teams on many projects.
o Boundaryless organization
• A boundaryless organization is one whose design is not constrained by horizontal, vertical, or external boundaries.
• Virtual organizations often consist of a group of full-time employees and specialists hired externally as needed.
• Network organizations (or modular organizations) use their own employees to complete some types of work activities and networks of outside suppliers to complete other types of work activities. This type of structure allows an organization to focus on its core competencies and contract out other activities.
o Learning organization
• A learning organization has become proficient at continuously learning, adapting, and changing.
• Employees in learning organizations continually acquire and share new knowledge and apply that knowledge in improving the organization and their work.
• Employee empowerment and minimal barriers are necessary for a learning organization’s structure to work effectively.
• Organization for collaboration
o Collaboration between employees and with parties outside of organizations can lead to enhanced operations.
o Internal collaboration occurs in an organization and can be structured in different ways.
• Cross-functional teams are work teams within the organization made up of members from several different departments, collaborating with one another to achieve organizational goals.
• A task force is a temporary group formed to work on a specific short-term problem affecting many departments.
• Communities of practice are groups of people who share their knowledge and experiences about a topic and benefit from this interaction. Communities of practice can be formalized into employee councils and networks.
o External collaboration involves collaboration between an organization and its stakeholders.
• Open innovation is one type of external collaboration in which organizations communicate ideas about new products and services to stakeholders (including customers), and then use the feedback they receive to improve operations.
• Strategic partnerships are another type of external collaboration. In this type, an organization builds a collaborative relationship with another organization to share resources and capabilities for a business purpose.
• Flexible work arrangements
o Many types of flexible work arrangements exist in today’s organizations.
o Types of flexible work arrangements include telecommuting, compressed workweeks, and flexible work hours.
• Contingent workers
o Temporary or part time workers who are contracted to work for an organization when there is demand for their services.
o Some organizations prefer to use contingent workers due to reduced overhead costs associated with them, and some employees prefer the flexibility of serving in this capacity.
• Overview of groups
o Two or more individuals coming together to achieve prescribed goals.
o Can be formal or informal
o Commonly follow five stages of group development:
• Forming is where members join the group and the group’s purpose, structure, and leadership is defined. This stage involves uncertainty as members shift from thinking of themselves as individuals to members of a group.
• Storming is where intragroup conflict occurs, either over who will control the group or what the group must be doing.
• Norming is when close relationships develop among group members and the group develops a strong sense of camaraderie. A common set of norms are developed in this stage.
• Performing is the stage when the group has settled in and can focus on accomplishing its objectives.
• Adjourning is when a group disbands. Activities include wrapping up any projects and saying goodbye to other group members.
• Groups may not progress sequentially through the stages, and may go back and repeat stages at different times.
• Group structure
o Is internal and shapes members’ behaviors and influences group performance
o Structure determine major aspects of the group, including:
• Roles are expected behavior patterns; these roles are contingent on that person’s position in the social unit. Individuals may sometimes run into role conflict if they perform more than one role within a group.
• Norms are expectations that are accepted and shared by members of a group. Output levels, absenteeism, and promptness are all dictated by norms. Members of a group who behave outside of the norms are pressured to fall back in line with the other members.
• Conformity has an impact on an individual’s judgment by making that individual want to be consistent with other members of a group.
• Groupthink occurs when a group exerts intense pressure on a member to align his or her opinions to those of the group.
• Status is a ranking in a group, and it may be formally or informally conferred.
• Group size depends on the scope of the project, and in groups where members perceive that workload is not even, social loafing (or free riding) may occur.
• Group cohesiveness is the extent to which members are attracted to a group and share the group’s goals.
• Conflict management in groups
o Conflict in groups occurs when members perceive that incompatible differences exist.
o Three main views of group conflict exist, and they differ based on how valuable they find conflict to be to group success.
o Conflicts differ depending on whether they are helpful to the team.
o Functional conflicts are constructive and help the group to improve performance.
o Dysfunctional conflicts are destructive and prevent a group from achieving its goals.
o Five conflict management techniques exist:
• Avoidance
• Accommodation
• Forcing
• Compromise
• Collaboration
o Conflicts should be assessed before determining which management technique best fits the situation.
• Turning groups into teams
o Work teams differ from work groups.
• The members of work teams use their complementary skills to work on a specific, common goal.
• Work teams have evolved through time and now include cross-functional teams and virtual teams.
• Effective work teams can be created when:
o Clear goals are established
o Members have relevant skills
o Mutual trust exists
o A unified commitment has been reached
o Good communication is present
o Negotiating skills come into play
o Appropriate leadership occurs
o Internal and external support is given
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