PowerPoint 13b: Organizational Structure: 5 Key Concepts

Organizations as Abstractions
Organizations are concepts, abstractions and ideas; these 5 concepts are ways we think about the relationships which "form" our organizations
Five Concepts of Organizational Structure
1) Span of control
2) Chain of command
3) Delegation, authority, responsibility, accountability, social responsibility
4) Centralization vs. decentralization
5) Strategic business unit
Span of Control/Management: Tall structure
Span of 4, managers are levels 5 & 6 and workers are level 7
Span of Control/Management: Flat structure
Span of 8, managers are levels 3 & 4, workers are level 5
Factors influencing span of control
1) Interaction requirements
2) competence levels
3) work similarity
4) problem frequency and seriousness
5) physical proximity
6) non-supervisory duties of manager
7) available assistance
8) motivational possibilities of work
Chain of Command
Unbroken line of authority that links each individual with top organizational position through managerial position at each successive organizational layer (Structure of organization charts)
Chief executive officer
Chief financial officer
Chief operating officer
Chief information officer
Chief medical officer
Vice president
Delegation, authority, responsibility, accountability: Delegation
Assignment of part of work to others, along with responsibility and authority necessary to achieve results
Levels of Delegation
1) You are responsible, you have authority, go do it
2) You have the authority to go do it, after the fact tell me what happened, report the results
3) You go out and scope the problem, build a plan to solve it, review the plan with me, and upon approval from me, proceed
4) Think about the problem with me, jointly formulate a plan. You execute under my supervision and report progress as it proceeds with my corrective input as we go
Barriers to Delegation
1) They can't do it as well as I can
2) Fear subordinate failure
3) Lack time to train
4) Hold tightly to authority and power
5) Enjoy task themselves
6) Threatened by subordinate competency
7) Want work done "my way"
The Authority Idea
Right to make decisions, carry out actions and direct others in matters related to duties and goals of a position (Acceptance of instructions or requests of others, formal vs. informal, circumstantial)
Authority Relationships: Line Position
Responsible for achieving major goals of organization
Authority Relationships: Staff Position
Provide specialized expertise and assistance to line positions
Authority Relationships: Personal Assistant
Provide assistance to particular person
The Responsibility Idea
Obligation to carry out duties and achieve goals related to a position (Who has the duty?, Is it imperative?, Is a value implied?)
Delegation, authority, responsibility, accountability: Accountability
Requirement to provide performance feedback or satisfactory reasons for significant deviations from duties or expected results
Delegation, authority, responsibility, accountability: Social responsibility
Obligations of an organization to protect and improve the welfare of society, owners, employees and itself
Centralization vs. Decentralization: Factors
Size, Geographics, Technology and Environment
Advantages of Centralization
1) economies of scale
2) consistency of presentation
Advantages of Decentralization
1) inspires innovation
2) accommodates to local market conditions
3) provides personal growth
Strategic Business Unit Idea
Unit of an organizational structure which may have one or more of its own: products/services, customers, marketing/distribution channels, profits, and strategy