Marketing Manager Course - Chapter 09

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.
9
Chapter
Managing the Structure and
Design of Organizations
Managing the Structure and
Design of Organizations
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
After reading this chapter, you should be able to:
z
Identify the vertical and horizontal dimensions of organization
structure.
z
Develop coordination across departments and hierarchical levels.
z
Differentiate between authority, responsibility, and
accountability.
z
Recognize when structural characteristics of centralization, span
of control, formalization, and chain of command should be used.
z
Apply the three basic approaches – functional, divisional, and
matrix – to departmentalization.
z
Use organization structure and the three basic organization
designs – mechanistic, organic, and boundaryless – to achieve
strategic goals.
z
Anticipate key strategic events likely to trigger a change in the
structure and design of an organization.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.
Organizing
z
The deployment of resources to achieve strategic
goals. It is reflected in:
¾
The organization’s division of labor that forms jobs and
departments.
¾
Formal lines of authority.
¾
The mechanisms used for coordinating diverse jobs and roles
in the organization.
z
Strategy indicates what needs to be done.
z
Organizing shows how to do it.
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.
Organization Structure
z
Formal system of relationships that determine:
¾
Lines of authority – who reports to whom.
¾
Tasks assigned to individuals and units – who does what
tasks and with which department.
z
Dimensions of organization structure:
¾
Vertical dimension

¾
Horizontal dimension
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.
The Vertical Dimension of
Organization Structure
z
Unity of Command –a
subordinate should have only
one direct supervisor.
z
A decision can be traced back
from the subordinates who
carry it out to the manager who
made it.
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.
The Vertical Dimension of
Organization Structure
(continued)
z
Authority – The formal right of a manager to make
decisions, give orders, and expect the orders to be
carried out.
z
Line Authority
z
Staff Authority
z
Responsibility – the manager’s duty to perform an
assigned task.
z

Accountability – the manager (or other employee)
with authority and responsibility must be able to
justify results to a manager at a higher level in the
organizational hierarchy.
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.
The Vertical Dimension of
Organization Structure
(continued)
z
Line Authority
¾
entitles a manager to directly control the
work of subordinates by hiring, discharging,
evaluating, and rewarding them
¾
line managers hold positions that contribute directly to the
strategic goals of the organization
¾
part of the chain of command
z
Staff Authority
¾
the right to provide advice, recommend, and
counsel line managers and others in the organization
¾
staff managers direct line managers
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.
The Vertical Dimension of
Organization Structure
(continued)

z
Span of control – the feature of vertical structure
that outlines:
¾
The number of subordinates who report to a manager.
¾
The number of managers.
¾
The layers of management within an organization.
z
Smaller span – fewer employees supervised by a
manager – creates a tall vertical organizational
structure
z
Larger span – greater number of employees
supervised – creates a flat organizational structure
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.
The Vertical Dimension of
Organization Structure
(continued)
z
Centralization – the location of decision authority at
the top of the organization hierarchy.
z
Decentralization – the location of decision authority
at lower levels in the organization.
z
Formalization – the degree of written
documentation that is used to direct and control
employees.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.