Management

CHAPTER 7: Designing Organizational Structure.

I- Designing Organizational Structure.

Organizing: is the process by which managers establish the structure of working relationships among employees to allow them to achieve organizational goals efficiently and effectively.

Organizational Structure: A formal system of task and reporting relationships that coordinates and motivates organizational members so that they work together to achieve organizational goals.

Organizational Design: The process by which managers make specific organizing choices that result in a particular kind of organizational structure.

A) The Organizational Environment.

In general, the more quickly the external environment is changing and the greater the uncertainty within it, the greater are the problems facing managers in trying to gain access to scarce resources.

In contrast, if the external environment is stable, resources are readily available, and uncertainty is low, then less coordination and communication among people and functions are needed to obtain resources.

B) Strategy.

A differentiation strategy aimed at increasing the value customers perceive in an organization’s goods and services usually succeeds the value customers perceive in an organization’s goods and services usually succeeds best in a flexible structure with a culture that values innovation.

A low-cost strategy that is aimed at driving down costs in all functions usually fares best in more formal structure with more conservative norms, which gives managers greater control over the activities of an organization’s various departments.

C) Technology.

As a rule, the more complicated the technology than an organization uses, the more difficult it is to regulate or control it because more unexpected events can arise.

D) Human Resources.

In general, the more highly skilled its workforce, and the greater the number of employees who work together in groups or teams, the more likely an organization is to use a...