BA 5201 Organization and Management Structure and design Instructor: Ça ğ rı Topal 1

Structure vs. design Structure: the sum total of the ways in which an organization divides its labor into distinct tasks and then coordinates them Differentiation Integration Design: the sum total of processual and structural ways to make an organizational structure functional so that organizational goals are achieved 2

Formal organization The official structure explicitly formulated in organizational documents and defining the way the organization is supposed to operate 3 President Vice president Department head Vice president Department head

Informal organization The unofficial structure implicitly codified into the norms and behaviors of organizational members and indicating the way the organization actually operates 4 President Vice president Department head Vice president Department head

Differentiation and integration Differentiation Division of labor into tasks Specialization Integration Coordination of specialized tasks Cohesiveness 5

Differentiation: horizontal Division of work to be done into tasks and subtasks at the same organizational level The number of different individuals or units at the same level of an organization 6 CEO FinanceHRMManufacturingMarketing

Differentiation: vertical Division of work by level of authority, hierarchy, or chain of command The number of different levels in an organization 7 President V. P. Finance Asst. V. P. Executive Finance V. P. HRM Executive HRM Asst. V. P.

Differentiation: spatial Geographical location of different organizational activities 8 Typical in multinational companies CEO African Operations European Operations Asian Operations North American Operations

Differentiation or complexity High horizontal differentiation High vertical differentiation High spatial differentiation Trend towards less complexity and more integration 9

Integration: formalization Based on rules, policies, and procedures Reliance on the written documents Employees assumed to be not well-informed, no so knowledgeable, less skilled, and possess no good judgment Related closely to spatial dispersion Not the answer to high uncertainty 10

Integration: centralization Referring to the locus of decision making Decision-making authority vested in top management Lower-level employees assumed to lack awareness of general organizational goals and focus on localized concerns Lower-level employees not having necessary skills and information to make decisions Providing consistency operations and actions Time-consuming 11

Integration: span of control The number of immediate subordinate positions a superior controls or coordinates Related closely to the number of hierarchical levels: flat or tall Depending on the ability and experience of the supervisor the ability and experience of subordinates the nature of the task being performed the spatial differentiation the amount and type of interaction 12

Integration: standardization Setting consistent input, process, and output requirements to reduce uncertainty and unpredictability Input standardization: standardizing material and human resources Process standardization: standardizing the way a task is performed Output standardization: standardizing products or services 13

Integration: nonstructural means Liaison roles Teams Culture Information systems 14

Mechanistic vs. organic organization Organization type Structural characteristic MechanisticOrganic ComplexityHighLow FormalizationHighLow CentralizationHighLow Span of controlNarrowBroad StandardizationHighLow 15