Learning Objectives

7-1. Explain the difference between mechanistic and organic organizations and the environments in which they are more effective.

Mechanistic organizations are bureaucratic, focusing on following procedures and rules through tight controls, and have specialized jobs, with decisions being made by top managers. Conversely, organic organizations are flexible, with minimal focus on procedures and rules, and have broadly defined jobs, with decisions being made at lower levels. Mechanistic organization tends to be effective in stable environments, whereas organic organization tends to work well in dynamic environments.

7-2. Contrast formal and informal authority, centralized and decentralized authority, and line and staff authority.

Formal authority involves sanctioned relationships and ways of getting the job done, whereas informal authority involves unsanctioned relationships and ways of getting the job done. With centralized authority, top managers make important decisions; with decentralized authority, middle and first-line managers make important decisions. Line authority gives responsibility to issue orders down the chain of command, whereas staff authority gives responsibility to advise and assist others.

7-3. Define what an organization chart is and list the four aspects of a firm that it shows, and also describe the four traditional departmentalization designs.

An organization chart is a graphic illustration of the organization’s management hierarchy and departments and their working relationships. It shows the level of management hierarchy, chain of command, division and type of work, and departmentalization. Functional departmentalization focuses on internal activities performed within the organization, such as operations, marketing, finance, and human resources, or process of work flow. There are three types of external departmentalization. Product/ service departmentalization creates separate units for the various same products/services it offers all its customers. Customer departmentalization creates units to make products/services that meet the unique customer group needs. Territory departmentalization creates units for the geographical areas in which the organization does business.

7-4. Discuss the two multiple forms of departmentalization, and five contemporary designs.

A matrix departmentalization commonly combines functional and product departmentalization and employees work for a department and project man-ager. A divisional structure is based on semiautonomous strategic business units, or companies within a company. Team organizations create group units. Network organizations are boundaryless interrelationships among different organizations, and include modular and virtual organizations. Modular organization firms focus on what they do best, outsource the rest to other companies, and coordinate their activities. A virtual organization is a continually evolving network of contingent workers and companies that unite temporarily to exploit specific project opportunities or to attain strategic advantage. The learning organization design focuses on continuous improvement through sharing knowledge through-out internal and external networks.

7-5. Classify each of the nine job designs under the three job design option categories 

Job simplification options are used to make jobs faster and easier with more specialization by eliminating or combining tasks and/or changing the sequence of work. Job expansion options are used to make jobs less specialized through employee job rotation to perform more jobs, job enlargement by providing more variety, and/or job enriching to make the job more interesting and challenging; and jobs can be enriched by using the Job Characteristics Model. Work team job design options include using an integrated team with a manager or self-managed teams that share the management of job designs.

7-6. Explain how to set priorities by answering three priority questions, and list the four steps in the delegation process.

A manager first answers “yes” or “no” to the three priority-determination questions: (1) Do I need to be personally involved because of my unique knowledge or skills? (2) Is the task my responsibility, or will it affect the performance or finances of my department? (3) When is the deadline—is quick action needed? Depending on the answers to these questions, the manager delegates the task or assigns it a high, medium, or low level of priority. The steps in the delegation process are (1) explain the need for delegating and the reasons for selecting the employee; (2) set objectives that define responsibility, level of authority, and deadline; (3) develop a plan; and (4) establish control checkpoints and hold employees accountable.