Lecture management a pacific rim focus chapter 9 basic elements of organisational structure

CHAPTER 9
BASIC ELEMENTS OF
ORGANISATIONAL STRUCTURE
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Lecture outline
•
•
•
•
•

Nature of organisational structure
Job design
Types of departmentalisation
Methods of vertical co-ordination
Promoting innovation
(methods of horizontal co-ordination)

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Nature of organisational
structure
Formal pattern of interactions and
co-ordination designed by management to

link the tasks of individuals and groups in
achieving organisational goals.

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Nature of organisational
structure
Four elements:
1. Assignment of tasks and responsibilities
to individuals and units.
2. Clustering these to form a hierarchy.
3. Mechanisms for vertical co-ordination.
4. Mechanisms for horizontal co-ordination.

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Nature of organisational
structure
• The organisation chart
– Line diagram depicting broad outlines of an
organisation’s structure.

• Principles chart design
– As few hierarchical levels as possible.

– Charts should show who has authority over who.
– Charts should show official lines responsibility &
communication.
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Nature of organisational
structure A B C I N C .
C .E .O .
D IR E C T O R
H .R .M .

D IR E C T O R
F IN A N C E

D IR E C T O R
SALES

MANAGER
F IN A N C E
S U B O R D IN A T E

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Job design

• Job design
Specification of task activities associated with a
particular job.

• Design jobs to enhance motivation
Job simplification: breaking jobs into small elements.
Job rotation: moving through sets of tasks in sequence.
Job enlargement: wider range of similar tasks.

• Alternative work schedules
Managing work diversity.
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Managing diversity & work
schedules

‘…
‘… balancing
balancing work
work and
and personal
personal life’.
life’.
Flexitime:
Flexitime:core
corehours
hours

to
tobe
beworked,
worked,others
others
at
Jobsharing:
sharing: two
twoor
or
atemployee
employeediscretion
discretion Job
more
morepeople
peoplesharing
sharing
aafull-time
full-timejob
job
Compressed
Compressedwork
work
week:
week:longer
longer
hours
hoursworked
worked
per

perday,
day,shorter
shorter
working
workingweek
week

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Types of departmentalisation
Departmentalisation:
Clustering of individuals into units and units
into departments and larger units to facilitate
achievement of organisational goals.
• Functional
• Divisional
• Hybrid
• Matrix.
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Types of departmentalisation
Functional:
Functional:based
basedon

on
expertise,
expertise,
skill
skill&&similarity
similarity
ofofwork
workactivity.
activity.

Divisional:
Divisional:based
basedon
on
product
product
orormarket
marketsimilarities.
similarities.

Hybrid:
Hybrid:some
some
activities
activities
grouped
groupedby
byfunction,
function,
some

some
by
byproducts
productsorormarkets.
markets.

Matrix:
Matrix:Superimpose
Superimpose
horizontal
horizontaldivisional
divisional
over
overhierarchical
hierarchical
functional
functionalstructure.
structure.

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Methods of vertical
co-ordination

Linking of activities at the top of the organisation
with those at the middle and lower levels to
achieve organisational goals.

• Formalisation
• Span of management
• Centralisation vs de-centralisation
• Delegation
• Line & staff positions.
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Methods of vertical
co-ordination
Formalisation:
• Degree to which written policies, rules,
procedures, job descriptions and other
documents specify what actions are(not) to
be taken under a given set of circumstances.
• Extent of formalisation tends to grow with
age & size.
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Methods of vertical
co-ordination

Factors influencing span of management:
–
–

–
–
–
–
–
–

High competence levels.
Low interaction requirements.
Work similarity (between organisational peers).
Low problem frequency and seriousness.
Physical proximity.
Few non-supervisory duties of managers.
Considerable available assistance.
High motivational possibilities of work.

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Methods of vertical
co-ordination
Centralisation

Extent to which power & authority are retained at the top
organisational levels.

De-centralisation
Extent to which power & authority are delegated to lower

levels.

Factors favouring centralisation
•
•
•
•

Large organisational size
Geographic dispersion
Technological complexity
Environmental uncertainty.

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Methods of vertical
co-ordination
‘…
‘…extent
extentto
towhich
whichpower
powerand
andauthority
authoritywill
willbe
beretained

retainedat
at
upper
upperlevels’.
levels’. Influenced
Influencedby:
by:
Large
Largesize:
size:larger
larger
organisations
organisations
likely
likelyto
tobe
bemore
more
Decentralised.
Decentralised.
Technological
Technologicalcomplexity:
complexity:
with
withmore
morecomplex
complex
technology,need
technology,needto
todevolve

devolve
authority
authorityto
tolower
lowerlevels.
levels.

Geographic
Geographicdispersion:
dispersion:
more
moredispersed
dispersedlikely
likelyto
tobe
be
decentralised,
decentralised,to
toenable
enable
control
controlat
ataanumber
numberof
ofsites.
sites.
Environmental
Environmentaluncertainty:
uncertainty:
with

withrapid
rapidchange,
change,need
needfor
formore
more
employees
employeesto
tobe
beinvolved
involvedinin
responding
respondingto
tochallenges.
challenges.

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Methods of vertical
co-ordination
Delegation

Assignment of part of a manager’s work to others, along with
both responsibility & authority necessary to achieve expected
results.

Factors restraining delegation

•
•
•
•
•
•

Fear subordinate failure.
Time to train subordinates.
Enjoy doing tasks.
Release of authority.
Concern for task performance.
Fear subordinate competence.

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Methods of vertical
co-ordination
Configuration of line and staff positions:
• Line authority
Authority following the chain of command
established by the formal hierarchy.

• Functional authority
Authority of staff over others in the organisation in
matters related directly to their respective functions
e.g. HRM dept.

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Methods of horizontal
co-ordination
Horizontal co-ordination:
Linking of activities across departments at similar
levels.

• Need for information processing across the
organisation.
• Promotes innovation through dissemination of
ideas & information.
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Methods of horizontal
co-ordination
Horizontal co-ordination promoted by:
• Slack resources
Cushion of resources that facilitates adaptations to
internal/external pressures, as well as initiation of
changes.

• Information systems
One information source for many users.

• Lateral relations
Direct contact, liaison roles, task forces, teams.
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Lecture summary
• The nature of organisational structure
– Definition
– Organisation chart
– Job design.

• Job design
– Designing for motivation:
• Job enlargement, rotation, enrichment, simplification.

• Types of departmentalisation
– Functional, divisional, hybrid, matrix.
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Lecture summary
• Methods of vertical co-ordination
–

–

–
–
–

Formalisation
Span of management
Centralisation vs de-centralisation
Delegation
Line & staff authority.

• Methods of horizontal co-ordination
–

–
–

Slack resources
Information systems
Lateral relations.

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