Chapter 8

Designing Adaptive Organizations

 Organizing

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 Organizing the Vertical Structure

Organizing Structure Defines:

 The set of formal tasks assigned to individuals and
departments
 Formal reporting relationships

 The design of the systems to ensure effective

coordination

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 3

Organizing Concepts

Work Specialization is the degree to which

organizational tasks are subdivided into
individual jobs; also called division of labor

Chain of Command is an unbroken line of

authority that links all individuals in the
organization and specifies who reports to whom

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 Authority, Responsibility, Accountability, and
Delegation
 Authority is the formal and legitimate right of a
manager to make decisions, issue orders, and allocate
resources to achieve organizational outcomes
 Authority is vested in organizational positions, not people
 Authority flows down the vertical hierarchy
 Authority is accepted by subordinates
 Responsibility
 Accountability is the mechanism through which
authority and responsibility are aligned
 Delegation is the process managers use to transfer
authority and responsibility down the chain 5
 Span of Management

The number of employees reporting to a

supervisor
•Tall Organizations have more levels and
narrow span

•Flat Organizations have a wide span and

fewer levels
10.2 Reorganization and Span of Management
Centralization and Decentralization

• Centralization – decision authority is located

near the top of the organization
• Decentralization – decision authority is
pushed downward to all levels
• Factors that influence centralization versus
decentralization:
– Change and uncertainty  decentralization
– Strategic fit
– Crisis, Failure Risk  centralization
 Departmentalization - Divisional
Divisional Structure - Grouping based on organizational
output
• Product, Program, or SBU-Based Divisions
• Geographic or Customer-Based Divisions
Departmentalization: Divisional (continued)

• Advantages:
– Fast response, flexibility in unstable environment
– Fosters concern for customer needs
– Excellent coordination across functional departments
• Disadvantages:
– Duplication of resources across divisions
– Less technical depth and specialization
– Poor coordination across divisions
10.4 Functional Versus Divisional Structures
Task Forces, Teams, and Project Management

Task Force – a temporary team Project Manager

or committee formed to solve a – person
specific short-term problem responsible for
involving several departments coordinating
activities of
several
Cross-functional Team – furthers departments for
horizontal coordination by the completion of
including members across the a specific project
organization