HIERARCHICAL ORGANIZATIONAL STRUCTURE BASED ON DIVISION OF LABOR Adam Smith (The Wealth of Nations 17760 recognized that when biz change their organization structure, productivity increases. This is especially true for small labor division /specialization of labor.
Division / specialization of labor refers to the degree to which tasks are subdivided into separate jobs. This usually increases productivity, as R allocation is more efficient. The characteristics of the Pyramid-shaped Organizational Structure are:
- Rigid liens of communication
- Numerous levels of management, from managing director to supervisors
- Clearly distinguishable organizational positions, roles& responsibilities
- Hierarchical, linear flows of info and direction, with large amounts of info directed downwards.
- A chain of demand: it is a system that determines responsibility, supervision & accountability of members of the org.
LEADERSHIP STYLES The four main types of leadership approaches and their characteristics are as follows:
- Autocratic - Strong, centralized control with a single source of authority, expects subordinates to follow orders, 1-way communication from the top down, external motivation through sanctions and rewards
- Democratic - Authority & power decentralized throughout the organization, encouragement of employee empowerment, i.e., employees involved in the decision-making process
- Collegial - Management adopts an integrative role & establishes an environment of mutual contribution, a style frequently adopted by professional organizations where the in intellectual abilities & skills of employees are similar and/or complementary, employees are self-directed and intrinsically motivated.
- Laissez-faire - Little or no central management role other than the establishment of broad objectives & policies, a style frequently adopted in organizations where highly qualified employees work in research teams to achieves specific objectives & results.
Managers who adopt a strict classical-scientific approach commonly display an autocratic leadership style. An autocratic leadership style is one where the manager tends to:
- Make all the decisions>
- Dictating work methods
- Limiting worker knowledge about what needs to be done to the next step to be performed
- Sometimes giving feedback that is disciplinary.
This style of leadership is effective in time of crisis or when speed in meeting deadlines is important.
BEHAVIOR MANAGEMENT THEORIES
Scientific Management principles did not always work due to the repetitive and boring nature of many jobs. 50 yrs after the emergence of Scientific Management theory, Behavioral Management theories (BMT) surfaced.
BMT states that to make substantial productivity gains, worker participation in the production process was required. It acknowledged the workers' contribution to O. It stressed the importance of human K.
BMT encourages information organizations, whereas the Classical + SM theory promotes formal organizations.
Informal organization refers to the informal communication network that develops between employees throughout an organization.
Formal organization is the formal lines of communication and chain of command. The organizational structure determines how work is allocated, the levels of authority & communication patterns.
Professor Elton Mayo (1880-1949)
One major contributor to BMT is Professor Elton Mayo who is the founder of industrial psychology. The 'Hawthorne effect' came from the experiment Mayo did at the Hawthorne Company in Chicago. It demonstrates that meeting people's social needs has a significant impact on productivity (light bulb experiment). Two significant results from the research were:
- Worker satisfaction is also non-economic (economic needs + social needs).
- Being made to feel part of a team ? increase job satisfaction.
MANAGEMENT AS LEADING
Leading is having a vision of where the business should be in the Long & Short-Term and being able to direct & motivate the human R in an organization to achieve its objectives.
NB: management is different to leadership. Leadership involves more of the human aspect.
MANAGEMENT AS MOTIVATING
Motivation is the individual, internal process that energizes, directs and sustains an individual's behavior. It is the personal force that causes a person to behave in a particular way. Employee satisfaction is as important as external factors such as working environment & pay rates. Example: Yahoo! Australia & New Zealand "The trick is to exercise control but have enough faith in your staff to respect, admire and trust the steps they take to become successful." It is important to develop a workplace culture, which fosters employee motivation.
MANAGEMENT AS COMMUNICATING
Communication is the exchange of info between people: the sending and receiving of messages.
Effective communication ? sharing the same goals. According to the Karpin Report & the DDI Asia-Pacific reports, Australian managers constantly rate poorly in the area of communication.
FLAT ORGANIZATIONAL STRUCTURE
Rapid advances of technology, especially the spread of the net + significant pressure of competitive situation due to forces of globalization has resulted to changes to flatter organizational structure. Flatter organizational structures have evolved due to a "de-layering" of management structures resulting in the elimination of 1 or more management levels. The traditional structure is too costly and it is slow in responsive to changing environment (ah, English!)
Flatter structure = greater responsibility of individuals teams, responsive to change given greater freedom & autonomy to carry out their tasks.
Characteristics of flat organizational structures
