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Organizational Design Purposeful and goal-oriented process Decisions/actions to predetermine the way employees do their work Organizational Structure Relatively stable relationships and processes of the organization. “The anatomy of the organization, providing a foundation within which the organization functions.” Purpose is to regulate, or at least reduce, uncertainty. Decision Process Managers must decide how to divide the overall tasks of the organization into successively smaller jobs. Managers must decide the basis by which to group the individual jobs. Managers must decide the appropriate size of the group reporting to each supervisor. Managers must distribute authority among the jobs. Ways that Division of Labor Can Occur: Work can be divided into different personal specialties. Occupational and professional specialties Work can be divided into different activities necessitated by the natural sequence of the work the organization does. Horizontal specialization Work can be divided along the vertical plane of an organization. Hierarchy of authority Extent to which managers allow subordinates to make decisions without approval of higher management and exact obedience from others Major Advantage Creating efficiency and more cost effective units Major Advantages Creating profit responsibility Fostering innovation and autonomy The number of jobs to be included in a specific group determines the frequency and intensity of interpersonal relationships required of a manager. Copyright ? 2002 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 15 CHAPTER Organizational Structure and Design IDENTIFY the choices which must be made in designing an organization. DEFINE what is meant by the term division of labor. DISCUSS the role of delegation of authority in design decisions. DESCRIBE several forms of departmentalization. EXPLAIN the importance of span of control. DEFINE three
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