Chapter 8 Organization Structure

Fundamentals of organizing
Differentiation: the organization is composed of many different units that work on different kind of tasks, using different skills and work methods.

Division of labor means the work of organization is subdivided into smaller task.
Specialization refers to the fact that different people or groups often perform specific parts of the larger task

Integration: these differentiated units are put back together so that work is coordinated into an overall product. Integration relates to how the different areas of the company coordinate their operations.


The Vertical Structure
Authority in Organization: the legitimate right to make decisions and to tell other people what to do. Organization authority refers to the hierarchy in a company from top level management to entry level employees.

Board of Director: a group that individuals that are elected as, or elected to act as, representatives of the stockholders to establish corporate management related policies and to make decision on major company.
Chief executives officer : the highest ranking executive in a company whose main responsibilities include developing and implementing high-level strategies, making major corporate decisions, managing the overall operations and resources of a company, and acting as the main point  of communication between the board of directors and the corporate operations.
Top management team

Hierarchical Levels: pyramid like ranking of ideas, individuals, items, etc., where every level (except the top and the bottom ones) has one higher and one lower neighbor. Higher level means greater authority, importance, and influence.
Span Of Control: the number of subordinates that a manager or supervisor can directly control. This number varies with the type of work: complex, variables work reduces it to six, whereas routine, fixed work increases it to twenty or more.
Delegation: the assignment of new or additional responsibilities to a subordinate
Responsibility, Authority, Accountability : responsibility means the assignment of a task that an employee is supposed to carry out; authority means that the person has  the power and the right to make decisions, give orders, draw on resources, and do whatever else is necessary to fulfill the responsibility; accountability means that the expectation that employees will perform a job, take a corrective action when necessary and report upward on the status and quality of their performance.
Advantages of Delegation: effective delegation raises the quality of subordinates and the service they provide to costumers or coworkers.

Decentralization: an organization wherein the decisions making authority does not sit with a central figure or group. Some decentralized organizations empower all levels within the hierarchy with decision influence.

The Horizontal Structure
The functional Organization: the classic organizational structure where the employees are grouped hierarchically, managed through clear lines of authority, and report ultimately to one top person.
The Divisional Organization: departmentalization that groups units around products, costumers, or geographic regions.
The Matrix Organization: an organization composed of dual reporting relationships in which some employees report to two superiors—a functional manager and a divisional manager
The Network Organization: a collection of independent, mostly single-function firms that collaborate on a good or service

Organizational Integration
Coordination by Standardization: establishing common routines and procedures that apply uniformly to everyone
Coordination by Plan: interdependent units are required to meet deadlines and objectives that contribute to a common goal
Coordination by Mutual Adjustment: units interact with one another to make accommodations to achieve flexible coordination
Coordination and Communication: To cope with high uncertainty and heavy information demands, managers can use two general strategies. First, management can act to reduce the need for information. Second, it can increase its capacity to handle more information.
Option 1: Reducing the need for information
Option 2: Increasing information-processing capability