Documente Academic
Documente Profesional
Documente Cultură
October 6, 2015
MGMT 3301.04 - Voelker
Task #2 - SEE-I
Statement
Simply put, the organizational structure is how work is done inside of an
organization. Having a reliable organizational structure is important because it
controls the flow of how smoothly things are done. This becomes more apparent
when you start to analyze the advantages and disadvantages of using a
centralized structure, where the decisions are made by top managers, or a
decentralized structure, where decisions are made by a team. There are four
elements that make up organizational structure: centralization, formalization,
hierarchal levels, and departmentalization.
Explanation
It is the responsibility of top level managers to find the organizational structure
that works the best for their needs.
Centralization means exactly how much is higher management involved in
making business decisions. Are they completely responsible or only partly
responsible?
Formalization means how formal is the work culture. Is the organization one that
enforces a strict by the book environment or is the environment more relaxed?
Hierarchal levels means how many levels are there in an organizations
structure. Are there few or many? Are managers more hands on in their
employees work or are they distanced from their employees?
Departmentalization means dividing parts of a business into different
departments according to what they do or other commonalities between the
departments. Think of how businesses have different types of departments (i.e. IT
department, marketing department, etc.).
Example
Alex decided to open his own finance firm. He decided to enlist some of his
former peers from grad school.
They ranged from backgrounds in finance, to backgrounds in law and math.
While building a business plan and meeting with his future coworkers, a question
that arose was who would be making the decisions that would impact the
companys future.
After an hour of discussion, the group concluded that the top managers would be
responsible for the companys decision, because of the credentials they bought to
the table.
Their business structure would be more centralized and employees in nonmanagerial positions would report information to them, as managers, before
decisions were made about the company.
Illustration
Think of a centralized organization as the relationship between one of a child and
a teacher. Managerial authorities can be seen as the teacher while nonmanagerial employees can be seen as the child.
Before a child is able to do something, they must go to their teacher for approval.
If the teacher says yes, the child may do it, but they are only able to do it if their
teacher explicitly states it is okay.
The decision power is completely up to the child and if the child disobeys, they
will be remanded for their actions.
This dynamic is advantageous because it takes the pressure off of the child to
make important decisions alone.