Case 16:1
Chapter Sixteen: Organizational Structure and Design
Chapter Synopsis
This chapter presents an overview of how one goes about designing an organizational structure, touching on the topics of division of labor, delegation of authority, departmentalization, and span of control. From there, it delves into the nature of the structure itself, including formalization, centralization, and complexity.
Three organizational design models are also presented and discussed: mechanistic, organic, and matrix.
Following this is a discussion of multinational structures, virtual organizations, and boundaryless organizations.
Learning Objectives
After completing this chapter, students should be able to: • Identify the choices that must be made in designing an organizational structure. • Define what is meant by the term division of labor. • Discuss the role of delegation of authority in design decisions. • Describe several forms of departmentalization. • Identify the major advantages of matrix organizational design. • Explain the importance of span of control. • Define three important dimensions of structure. • Compare mechanistic and organic organizational design. • Discuss multinational organizational structure and design issues. • Explain the meaning of the term virtual organization.
Key Terms
organizational design—A specific organizational structure that results from managers’ decisions and actions.
division of labor—The process of dividing work into relatively specialized jobs to achieve advantages of specialization.
delegation of authority—The process by which authority is distributed downward in an organization.
departmentalization—The manner in which an organization is structurally divided. Some of the more publicized divisions are by function, territory, product, customer, and project.
matrix model of organizational design—An
Chapter Synopsis
This chapter presents an overview of how one goes about designing an organizational structure, touching on the topics of division of labor, delegation of authority, departmentalization, and span of control. From there, it delves into the nature of the structure itself, including formalization, centralization, and complexity.
Three organizational design models are also presented and discussed: mechanistic, organic, and matrix.
Following this is a discussion of multinational structures, virtual organizations, and boundaryless organizations.
Learning Objectives
After completing this chapter, students should be able to: • Identify the choices that must be made in designing an organizational structure. • Define what is meant by the term division of labor. • Discuss the role of delegation of authority in design decisions. • Describe several forms of departmentalization. • Identify the major advantages of matrix organizational design. • Explain the importance of span of control. • Define three important dimensions of structure. • Compare mechanistic and organic organizational design. • Discuss multinational organizational structure and design issues. • Explain the meaning of the term virtual organization.
Key Terms
organizational design—A specific organizational structure that results from managers’ decisions and actions.
division of labor—The process of dividing work into relatively specialized jobs to achieve advantages of specialization.
delegation of authority—The process by which authority is distributed downward in an organization.
departmentalization—The manner in which an organization is structurally divided. Some of the more publicized divisions are by function, territory, product, customer, and project.
matrix model of organizational design—An