What does “product departmentalization” mean?
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Product departmentalization groups resources according to specific products or services offered by an organization.
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Product departmentalization groups resources according to specific products or services offered by an organization.
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Customer departmentalization targets specific customer classifications in order to serve the needs of identifiable customer groups.
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Geographic departmentalization is based on the geographic markets or the locations where work is done.
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Process departmentalization is used to divide the organizations according to production process of goods or services.
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A mechanistic structure is characterized by a rigid bureaucratic structure that is controlled by rules and procedures in a clear hierarchy of authority or the chain of command. It is tightly controlled or that the span of control is narrow which leads to a relatively tall structure.
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An organic structure is the opposite end of design choices where the structure is more adaptive and flexible with looser chain of command. This means a lower level of formalization as rules and regulations are flexibly applied as employees can figure out what to do.
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Common organization structures that managers can choose from are as in the following: • Functional structure • Divisional structure • Matrix structure • Virtual network structure • Team structure • Hybrid structure
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In a functional structure, activities are grouped according to their similar or related skills, expertise and use of the same resources.
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A divisional structure is made up of separate divisions according to similarities or demands of product, customers, or geography. Each division has some autonomy; with a divisional manager who is responsible for its performance.
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A matrix structure combines advantages of both functional and divisional structures simultaneously in order to be highly responsive to changing external business environments. In other words, a matrix structure groups people and resources by function and by product or project.
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A virtual network structure is where most major functions or business processes are subcontracted to other firms. A small headquarter is used to coordinate those activities. A virtual network structure is very fluid and flexible because the core organization can add or take away parts of the network in order to meet a changing environment.
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A team structure emphasizes work groups or project type teams with little or no functional hierarchy and with team authority as its building block. Work activities are divided into projects or units; each with a team that is responsible and accountable for the assigned project. Members work together to utilize their skills and knowledge to achieve common goals.
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A hybrid structure has several business units or divisions and makes use of different forms of structures in order to tailor to an organization’s specific needs. A large and complex organization in particular often operates with a hybrid structure.
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Three important contingency factors that affect design choices are strategy, environment and technology.
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Firms may prefer to follow either the mechanistic design or the organic design to fulfill their needs.
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Environmental factors create uncertainty for managers. To be effective, managers need to manage those uncertainties.
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Environmental uncertainty is a situation where the management of a firm has little information about its external environment.
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Two characteristics influencing uncertainty are: • The number of factors in the external environment. • The rate of change of those factors in the environment
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The term technology is used here to include computers, machines, skills and knowledge, procedures, techniques and work methods. Manufacturing and service organizations employ different sets of technologies. Many service firms need to be physically close to their customers who are often in several geographic areas. Those firms would disperse their facilities into several smaller units or offices in order to provide faster and better service to their customers.50 Therefore, service firms tend to be decentralized and flexible with an overall organic structure.
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There is a pattern between technical complexity of the manufacturing process and the companies. Technical complexity is categorized according to the level of mechanization of the manufacturing process. Low technical complexity means that workers perform much of the work in the production process.
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Routine technologies are characterized by work tasks that are repetitive with work procedures, such as in an assembly line. Routine tasks are high in standardization and formalization with centralized authority.
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A team is a group of people who interact and coordinate their work together to achieve shared goals.
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A team should have a small size and must contain four elements which are as in the following: • Common commitment and purpose • Performance goals • Complementary skills • Mutual accountability
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Several types of teams can exist within an organization. Five common classifications are as follows: • problem-solving teams • self-managed teams • cross-functional teams • virtual teams • global teams
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A problem-solving team is a team that is involved in efforts to improve work activities or to solve specific problems
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