Designing Organizational Structure: Authority and Control

15 important questions on Designing Organizational Structure: Authority and Control

What is a flat organisation?

An organization that has few levels in its hierarchy relative to its size.

What are some of the problems that tall organisations may experience?


Communication, motivation and cost problems. 
Communication: Communication takes longer when the chain of command longer is. Decision making gets slower
Distortion: A message has a different meaning by the time it reaches the top as people interpret messages to their own needs and interests.
Deliberately manipulation of information: Managers may manipulate information to their own interests.

Motivation: The taller the organisation gets the worse the motivation gets - less responsibility lays with each manager.

Bureaucratic costs: Managers cost a lot of money.

What is the "principle of minimum chain of command"?

An organization should choose the minimum number of hierarchical levels consistent with its goals and the environment in which it operates.
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What is meant with span of control? What is the advantage of this?

The number of subordinates a manager directly manages.

The number of employees can increase while the number of managers remains the same -> Saves the company costs for managers.

What is the advantage of decentralising authority in tall organisations?

It makes the organisation more flexible to its external environment because it reduces the amount of direct supervision required.

How do you call a form of organizational structure in which people can be held accountable for their actions because they are required to act in accordance with rules and standard operating procedures?

Bureaucracy

How do you call the authority a person possesses because of his or her position in an organization?

Rational-legal authority

What are the advantages and disadvantages of bureaucracy?

Advantages:
- Organisational levels are clearly defined 
- No questions about each person's role in the organisation
- Individuals are held accountable for their actions
- Separates the position from the person

Disadvantages:
- Bureaucratic organisations often become tall, centralised and inflexible.
- Decision making slows down
- Members often rely too much on rules and rely on managers to make decisions

How do you call the state of opposition that occurs when two or more people have different views of what another person should do and, as a result, make conflicting demands on the person?

Role conflict

What is management by objectives?

A system of evaluating subordinates on their ability to achieve specific organizational goals or performance standards and to meet operating budgets.

How do you call the uncertainty that occurs for a person whose tasks or authority are not clearly defined?

Role ambiguity

How do you call the process of giving employees throughout an organization the authority to make important decisions and to be responsible for their outcomes?

Empowerment

How do you call work groups consisting of people who are jointly responsible for ensuring that the team accomplishes its goals and who are empowered to lead themselves?

Self-managed teams

How do you call formal work groups of employees from across an organization's different functions that are empowered to direct and coordinate the value-creation activities necessary to complete different programs or projects?

Cross-functional teams

How do you call workers who are employed for temporary periods by an organization and who receive no indirect benefits such as health insurance or pensions?

Contingent workers

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