Chapter 7 Style of OrganizationThe elements of structureContingencyvariables affecting structureOrganizationdesign applications
Chapter 7 Style of Organization The elements of structure Contingency variables affecting structure Organization design applications
Executive-LineauthorityDirectorAssistant to the.....StaffauthorityExecutiveDirectorDirector ofDirector ofDirector ofOtherHumandirectorsOperationsPurchasingResourcesUnit 2Unit 1ManagerManager:HumanHumanOtherOtherOperationsPurchasingOperationsPurchasingresourcesresourcesExhibit7-1 Line Versus Staff Authority
Exhibit7-1 Line Versus Staff Authority Other Executive Director Assistant to the Executive Director Director of Human Resources Director of Operations Director of Purchasing Other directors Unit 1 Manager Unit 2 Manager Human resources Operations Purchasing Other Human resources Operations Purchasing Line authority Staff authority
How do authority and power differ?Authority is a part of the larger concept of powerAuthority is a two-dimensional conceptIts scope of influence is defined by the horizontaldimension, its greatness is defined by the verticaldimension.(Exhibit7-4)Power is athree-dimensional conceptIt includes not only the functional and hierarchicaldimensions but also a third dimension called centralityPower is made up of both one's vertical position and one'sdistance from the organization's power core or center(Exhibit7-5)
How do authority and power differ? Authority is a part of the larger concept of power. Authority is a two-dimensional concept. Its scope of influence is defined by the horizontal dimension; its greatness is defined by the vertical dimension. (Exhibit 7-4) Power is a three-dimensional concept. It includes not only the functional and hierarchical dimensions but also a third dimension called centrality. Power is made up of both one’s vertical position and one’s distance from the organization’s power core or center. (Exhibit 7-5)
Exhibit 7-2 AuthorityChiefExecutiveOfficerHumanR&DFinanceAccountingMarketingProductionResources
Exhibit 7-2 Authority Chief Executive Officer Finance Accounting Marketing Production R&D Human Resources
PlantManagerManager,Manager,Manager,Manager,Manager,InformationHumanEngineeringAccountingPurchasingSystemResourcesExhibit 7-3 FunctionalDepartmentalization
Exhibit 7-3 Functional Departmentalization Plant Manager Manager, Engineering Manager, Accounting Manager, Information System Manager, Human Resources Manager, Purchasing
PresidentVicePresident.VicePresidentVice PresidentLubricantsFuelschemicalsand WaxesMarketingMarketingMarketingPlanning andPlanning andPlanning andEconomicEconomicEconomicSupply andSupply andSupply andDistributionDistributionDistributionManufacturingManufacturingManufacturingExhibit 7-4Product Departmentalization
Exhibit 7-4 Product Departmentalization President Vice President, Fuels Vice President, Lubricants and Waxes Vice President, chemicals Marketing Planning and Economic Supply and Distribution Manufacturing Marketing Planning and Economic Supply and Distribution Manufacturing Marketing Planning and Economic Supply and Distribution Manufacturing
Directorof SalesManager,Manager,Manager,RetailWholesalesGovernmentAccountsAccountsAccountsExhibit 7-5CustomerDepartmentalization
Exhibit 7-5 Customer Departmentalization Director of Sales Manager, Retail Accounts Manager, Wholesales Accounts Manager, Government Accounts
Vice Presidentfor SalesSalesDirector,SalesDirector,Sales Director,Sales Director,MidwesternWesternRegionEasternRegionSouthernRegionRegionExhibit 7-6 GeographicDepartmentalization
Exhibit 7-6 Geographic Departmentalization Vice President for Sales Sales Director, Western Region Sales Director, Southern Region Sales Director, Midwestern Region Sales Director, Eastern Region
MVADirectorValidationLicensingTreasuryDepartmentDepartmentDepartmentmanagermanagermanagerExhibit 7-7Process departmentalization
Exhibit 7-7 Process departmentalization MVA Director Validation Department manager Licensing Department manager Treasury Department manager
Two Types of Organizational StructureMechanistic organization(or bureaucracy)It has a structure that is high in specializationformalization, and centralization.Organic organizationIt has a structure that is low in specialization,formalization, and centralization. This type oforganization is loose, flexible, and highly adaptive
Two Types of Organizational Structure Mechanistic organization(or bureaucracy) It has a structure that is high in specialization, formalization, and centralization. Organic organization It has a structure that is low in specialization, formalization, and centralization. This type of organization is loose, flexible, and highly adaptive