Chapter 15, Problem 1CR

Summary Introduction

To determine:

An organizational structure consists of seven elements. What are they?

Introduction:

An organizational structure is the way in which activities/job tasks are identified, divided and coordinated. 

Explanation of Solution

An organizational structure differs from organization to organization depending on the way individuals see the environment as well the organization. Organizational structure includes seven elements.

Work Specialization is the competency that an individual gains by engaging in a certain activity for a long period of time. In other words, it improves employee’s skills through repetition. It shows the degree to which activities of the organization are broken down into separate jobs. But specialization could lead to demotivation.

Departmentalization is the basis on which groups are divided.  Activities can be grouped by the functions performed, process basis, product basis, service basis etc. Amongst these the most popular way is based on the functions performed where it groups, specialists together causing it to be highly efficient.

Chain of command is a line of authority and decision making power from the top of the organization to the lowest echelon. It clarifies who reports to whom. Chain of command also addresses unity of command and Authority.

Span of control is the number of subordinates that directly reports to a manager/supervisor. However, by maintaining a narrow span with a few employees, a manager would have close control whereas a wide span of control would be more costly and managers tend to lose control.

Centralization is the process where all decision making is concentrated to the top management whereas Decentralization is the process where decision making is pushed down to the lower levels in the hierarchy. Decentralization can act up quickly and make decisions but is prone to errors rather than centralization

Formalization is the standardization of job tasks. When jobs are formalized, the employees would understand exactly what to do and how to do it resulting in a uniform and consistent output.

Boundary spanning occurs when individuals link with people outside their formally assigned groups. These types of activities enhance the organization and builds up team creativity.