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MGMT 3000 Midterm 2 Exam Questions and Answers
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MGMT 3000 Midterm 2 ExamQuestions and Answers
Organizational Design - -The formal systems, levers, and decisions an
organization adopts or employs in pursuit of its strategy
- Several important decisions:
-> How will jobs be divided and how much autonomy will be allowed
throughout the organization?
-> Should jobs be formalized, structured, and standardized?
-> Should the company organize around customers, geographic regions,
product categories, functions, or some combination of these?
- The choices made in each of these areas will influence the overall context
of the organization.
- Functions of an Organization - -- Defines the roles of the labor force
- Coordinates activities between members
- Identifies the borders of the firm and external relationships
- Mechanistic Organization - -* comes from scientific view of management,
Organizers
- high degree of job standardization and job specialization
- specific definitions of roles and responsibilities
- more hierarchical leadership with clear lines of authority
- information communicated in a hierarchical manner from superior to
employee
- employees encouraged to develop job-specific knowledge within their
narrow area of specialization
- Mechanistic Organization: Types - -- Bureaucratic Approach: an extreme
form organizational control in which systems are highly formalized and are
characterized by extensive rules, procedures, policies, and instructions
-> close personal surveillance of superiors over subordinates
-> not suited to creative environments
- Mechanistic Organization - Bureaucratic Approach: Advantages + When
Appropriate - -Advantages:
- efficient
- can withstand high turnover
- provides focus for diverse workforce
When Appropriate:
- large, complex organizations
- measurable tasks
,- price-competitive and cost-sensitive industries
- Organic Organization - -* comes from human relations view of
management, Behaviorists
- low degree of job standardization and job specialization
- loose definitions of roles and responsibilities
- less hierarchical leadership with less emphasis on lines of authority;
- information communicated more laterally; information and advice rather
than top-down orders
- employees encouraged to develop knowledge outside their area of
specialization
- Organic Organization - Types - -- Clan Approach: A type of organizational
control that includes self-supervising teams that are responsible for a set of
tasks
- Holocracy: a method of decentralized management and organizational
governance, which claims to distribute authority and decision-making
through a holarchy of self-organizing teams rather than being vested in a
management hierarchy
-> suited for creative environment
- Organic Organization - Clan Approach: Advantages + When Appropriate - -
Advantages:
- elicits commitment
- employees are self-regulating
- can easily adapt to environment
When Appropriate:
- uncertain conditions
- quickly changing industry
- work activities difficult to measure
- Elements of Organizational Structure (5) - -1) Work Specialization: degree
to which tasks in an organization are divided into separate jobs.
2) Chain of Command: answers the question of "who reports to whom" and
signifies formal authority relationships
3) Span of Control: represents how many employees each manager manages
in the organization
4) Centralization: refers to where decisions are formally made in the
organization
5) Formalization: the degree to which rules and procedures are used to
standardize behaviors and decisions in an organization
- 1) Work Specialization (division of labor) - -The manner in which work in a
firm is divided among employees
- Vertical specialization: how much an employee creates, executes, and
administers activities in a certain area of the firm
, - Horizontal specialization: the breadth of activities that are performed in a
certain job
- Highly Specialized Jobs: Advantages + Disadvantages - -* Advantages:
- creation of highly specialized jobs can help develop expertise or
competency in a certain skill or function
- repetitive and specialized nature of jobs helps in quick and efficient training
of new resources
* Disadvantages:
- extreme specialization resulting in tedious repetitive work can lead to low
job satisfaction
- due to high levels of job specialization, firms are unable to prevent turnover
- 3) Centralization - -- Centralized Organization: An organizational structure
characterized by formal structures that control employee behavior by
concentrating decisions in a top-down, hierarchical fashion
- Consistent with a mechanistic, bureaucratic organizational structure
- Decentralized Organization: An organizational structure where key
decisions are made at all levels of the firm, not mandated from the top
- Consistent with an organic, clan organizational structure
- 4 Constructs of Organizational Structure - -1) Functional structure:
organizes a firm in terms of the main activities that need to be performed,
such as production, marketing, sales, and accounting
2) Divisional structure: groups diverse functions into separate divisions
3) Matrix structure: both divisional and functional managers have equal
authority in the organization
4) Network structure: knowledge workers are organized to work as individual
contributors, or to be a part of a work cluster that provides a certain
expertise for the organization
- 1) Functional Organizational Structure - -- Each functional department
conducts its own budgeting and planning processes
- Works well for small businesses and businesses with a limited number of
products or services
- Supports:
-> Easy flow of communication
-> Straightforward approach to supervision
-> Reduced level of redundancy
- Best suited for competitive situations that require efficiency of production
or functional expertise
- 2) Divisional Organizational Structure - -- Can be organized around
products, geographies, or clients
- Each division is accountable for its own profit and loss
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