Division of Labour

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Division of Labour Coordination

• Division of labour
• Subdivision of work into separate jobs assigned
  to different people
• Coordination of work
• Informal communication
• Formal hierarchy
• Standardization
• Formalization
• Goals/outputs
• Training/skills

J. Player, New York Times
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Organizational Structure and Design

• Chapter 16

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DIVISION OF LABOUR A SUMMARY
Division of
Labour Dimension Low High
Degree of specialization General tasks Highly
specialized tasks Typical organizational
size Small Large Economic efficiency Inefficient
Highly efficient
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Elements of Organizational Structure
Span of Control
Department- alization
Organizational Structure Elements
Centralization
Formalization
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Span of Control

• Number of people directly reporting to the next
  level
• Assumes coordination through direct supervision
• Wider span of control possible when
• with other coordinating methods
• employees perform similar tasks
• tasks are routine

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Tall versus Flat Organizations Comparison
Tall hierarchy
Relatively narrow span of control
Flat hierarchy
Relatively wide span of control
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Forces for (De)centralization
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DECENTRALIZATION BENEFITS WHEN LOW AND WHEN HIGH
Low Decentralization High decentralization (High
centralization) (low centralization)
Eliminates the additional respon- Can eliminate
levels of management, sibility not desired by
people making a leaner organization performing
routine jobs Permits crucial decisions to
be Promotes greater opportunities for made by
individuals who have decisions to be made by
people closest the big picture to problems
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Formalization

• The degree to which organizations standardize
  behaviour through rules, procedures, formal
  training and related mechanisms.
• Strengths and limits?

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Mechanistic vs. Organic Structures
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MECHANISTIC VERSUS ORGANIC DESIGNS A birds eye
view
Structure Dimension Mecha
nistic Organic
Stability Change unlikely Change
likely Specialization Many specialists Many
generalists Formal rules Rigid
rules Considerable flexibility Authority
Centralized in Decentralized, diffused few top
people throughout the organization
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Effects of Departmentalization

• How are employees and their activities grouped
  together?
• Areas of common supervision
• Establishes work teams and supervision structure
• Creates common resources, measures of
  performance, etc
• Encourages informal communication among people
  and subunits
• 5 pure types of departmentalization

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Simple

• Few employees reporting directly to one person
  (owner)

Owner
Employee
Employee
Employee
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Functional Organizational Structure

• Organizes employees around skills orother
  resources (marketing, production)
• Create subordinate goals

President
Marketing
Finance
Production
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Divisionalized Structure
Organizes employees around outputs,clients, or
geographic areas
President
Consumer Products
Enterprise Systems
Laserjet Solutions
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Project-Based Matrix Structure
Employees are temporarily assigned to a
specificproject team and have a permanent
functional unit
President
Project A Manager
Project B Manager
Project C Manager
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HYBRID structures

• Parts are combined to maintain balance of power
  and effectiveness across functional, product,
  geographic and client focused units

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Features of Team-Based Structures

• Structure is built around Self-directed work
  teams rather than individuals
• Teams organized around work processes
• Very flat span of control
• Very little formalization
• Most supervisory activities are delegated to the
  team
• Usually found within divisionalized structure
• Very responsive and flexible empowerment is
  high reduced need for managers time consuming
  ambiquity

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Network/Virtual Organizational Structure
MarketingFirm(U.K.)
ProductDevelopmentFirm(France)
CoreFirm(Canada)
CustomerServiceFirm(U.S.A.)
ProductionFirm(China)
AccountingFirm(Canada)
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Contingencies

• Organizational size
• Technology
• External environment
• Organizational strategy

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Types of Organizational Technology
Assembly Line
Engineering Projects
High Analyzability
Scientific Research
Skilled Trades
Low Analyzability
High Variety
Low Variety
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Org. Environment Structure
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Org. Environment Structure (cont)