Summary of Chapter 13 - Occupational Psychology: an applied approach by Steptoe-Warren, Gail.
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Organizational structures:
• Refers to the types of coordination to organize individuals and departments.
• Structure represents the way in which people and tasks are arranged in order to maximize performance and to
reach organizational goals most effectively and efficiently.
• Development of a structure depends on the following building blocks:
o
Centralization • Degree to which decision-making authority is
concentrated, at the top levels of the organization.
• Decentralized organization?
• Decision-making is delegated to lower
levels of the organization.
Formalization • Concerns the organization's policies and
procedures & the amount of authority a person
has over decisions.
• Controls employee's behaviors through the use of
written rules.
Hierarchal level • Represent the number of levels an organization
has in its hierarchy.
• A tall structure has a high hierarchy
• A flat structure has a short hierarchy
Departmentalization • Uses either functional or product structures
• 6 major dimensions of an organizational structure (Child, 1988):
o Allocation of individual tasks and responsibilities
o Formal reporting relationships, level of authority and span of control
o Grouping together of units, sections, and departments
o Systems for communication of information
o Delegation of authority
o Motivation of employees through systems for performance appraisal
• **these types of structures are represented by organizational charts.
Organizational charts (functional, product, & matrix):
o Depicts the structure of an organization including job positions as well as the authority and reporting lines
between them,
o
, • Limitations of a functional org chart:
o May lose the perspective of the overall organizations objectives/goals and focus on their department
only.
o Individuals also tend to have fixed ways of working and there is a lack of discussion with other
departments/units.
o Hollebeck et al. (2002 --> organizations that adopt a functional structure perform poorly in unstable
environments (changes in economic climates).
▪ These unstable environments create change that overwhelms the simple subunits/departments,
whereas if they operated as whole they might have the skills, knowledge and experience to
react to the changes more efficiently.
• Product organization chart:
o
o Usually produce different product lines
o Advantage?
▪ Manager of the product can devote their resources to one product.
▪ There might be also a focus on the market segments for that particular product ---> which
results in a goof knowledge of the segment area, which aids in remaining competitive.
o Each area has a duplicate
▪ Sales team for each product rather than 1 sales team that covers all products.
• This separation will cause coordination issues where different sales consultants may be
trying to sell different products to the same customer.
• This will make the organization look unprofessional in its sales approach and confuse
the customer as to who their sales contact is.
• Matrix organization chart:
o
o Each employee has 2 managers
▪ Functional manager (sales)
▪ Product or project (computers)
o There are 3 major roles in this structure:
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