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Chapter 7 Style of Organization The elements of structure Contingency variables affecting structure Organization design applications Exhibit7-1 Line Versus Staff Authority How do authority and power differ? Authority is a part of the larger concept of power. Authority is a two-dimensional concept. Its scope of influence is defined by the horizontal dimension; its greatness is defined by the vertical dimension. (Exhibit 7-4) Power is a three-dimensional concept. It includes not only the functional and hierarchical dimensions but also a third dimension called centrality. Power is made up of both one’s vertical position and one’s distance from the organization’s power core or center. (Exhibit 7-5) Exhibit 7-2 Authority Exhibit 7-3 Functional Departmentalization Exhibit 7-4 Product Departmentalization Exhibit 7-5 Customer Departmentalization Exhibit 7-6 Geographic Departmentalization Exhibit 7-7 Process departmentalization Two Types of Organizational Structure Mechanistic organization(or bureaucracy) It has a structure that is high in specialization, formalization, and centralization. Organic organization It has a structure that is low in specialization, formalization, and centralization. This type of organization is loose, flexible, and highly adaptive. Exhibit 7-8 Matrix Structure * * Other Executive Director Assistant to the Executive Director Director of Human Resources Director of Operations Director of Purchasing Other directors Unit 1 Manager Unit 2 Manager Human resources Operations Purchasing Other Human resources Operations Purchasing Line authority Staff authority Chief Executive Officer Finance Accounting Marketing Production RD Human Resources Plant Manager Manager, Engineering Manager, Accounting Manager, Information System Manager, Human Resources Manager, Purchasing President Vice President, Fuels Vice President, Lubricants and Waxes Vice President, chemicals Marketing Planning and Economic Supply and Di
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