Organizational Theory, Design And Change: Chapter 6

Front 1

functional structure

Back 1

a design that groups people together on the basis of their common expertise and experience or because they use the same resources.

Advantages: provides people with the opportunity to learn from one another and become more specialized and productive, people grouped together can supervise one another and control each other's behavior, develop norms and values that allow them to become more effective.

Disadvantages: communication problems, measurement problems, location problems, customer problems, strategic problems

Front 2

divisional structure

Back 2

a structure in which functions are grouped together according to the specific demands of products, markets, or customers.

Front 3

product structure

Back 3

a divisional structure in which products are grouped into separate divisions, according to their similarities or differences.

Front 4

product division structure

Back 4

a divisional structure in which a centralized set of support functions services the needs of a number of different product lines.

Front 5

multidivisional structure

Back 5

a structure in which support functions are placed in self contained divisions.

Front 6

self-contained division

Back 6

a division that has its own set of support functions and controls its own value creation activities.

Front 7

corporate headquarters staff

Back 7

corporate managers who are responsible for overseeing the activities of the divisional managers heading up the different divisions.

Front 8

Advantages of a multidivisional structure

Back 8

increased organizational effectiveness
increased control
profitable growth
internal labor market

Front 9

Disadvantages of multidivisional structure

Back 9

managing the corporate-divisional relationship
coordination problems between divisions
transfer pricing
bureaucratic costs
communication problems

Front 10

transfer price

Back 10

the price at which one division sells a product or information about innovations to another division.

Front 11

product team structure

Back 11

a divisional structure in which specialists from the support functions are combined into product development teams that specialize in the needs of a particular kind of product.

Front 12

geographic divisional structure

Back 12

a divisional structure in which divisions are organized according to the requirements of the different locations in which an organization operates.

Front 13

matrix structure

Back 13

a structure in which people and resources are grouped in two ways simultaneously: by function and by project or product.

Front 14

two-boss employees

Back 14

employees who report to two superiors: the product team manager and the functional manager

Front 15

Advantages of matrix structure

Back 15

reduce functional barriers and overcome the problem of subunit orientation

opens up communication between functional specialists

effectively utilize skills of its specialized employees

promotes concern for both cost and quality

Front 16

Disadvantages of matrix structure

Back 16

lacks a control structure

role conflict

conflict between functions and product teams over the use of resources

power struggles emerge between product and functional managers

Front 17

multidivisional matrix structure

Back 17

a structure that provides for more integration between corporate and divisional managers and between divisional managers.

Front 18

hybrid structure

Back 18

the structure of a large organization that has many divisions, and simultaneously uses many different types of organizational structure.

Front 19

network structure

Back 19

a cluster of different organizations whose actions are coordinated by contracts and agreements, rather than by a formal hierarchy of authority.

Advantages: production costs are reduced, avoids high bureaucratic costs, act in an organic way, can be replaced with new partners, access to low-cost over-seas sources of inputs and functional expertise

Disadvantages: a considerable level of mutual adjustment is needed, coordination problems

Front 20

Boundaryless organization

Back 20

composed of people who are linked by computers, faxes, computer-aided design systems, and video teleconferencing, and who may rarely or ever see one another face to face.

Front 21

e-commerce

Back 21

trade that takes place between organizations, and between organizations and customers using IT and the Internet.

Front 22

three types of divisional structure

Back 22

product structure
geographic structure
market structure