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Designing effective organizational structures - DESIGNINGORGANIZATIONAL STRUCTURE: AUTHORITYAND CONTROL

5 important questions on Designing effective organizational structures - DESIGNINGORGANIZATIONAL STRUCTURE: AUTHORITYAND CONTROL

Communication problems with tall hierarchies

As the chain of command lengthens, communication between managers at the top and bottom of the hierarchy takes longer. > Decision making slows
Distortion Information becomes distorted as it flows up and down the hierarchy through many levels of management. (Message that starts at one end of a chain of people can have quite a different meaning by the time it reaches the other end of the chain). Or managers deliberately manipulate information to promote their own interests.

Motivation problems with tall hierarchies

As the number of levels in the hierarchy increases, the relative difference in the authority possessed by managers at each level decreases, as does their area of responsibility.

Control: Factors affecting the shape of the hierarchy

Keep in mind that successful organizations design requires managers to solve all these challenges simultaneously. The strength of the informal ties and relationships that exist between organized members

The level of Horizontal differentiation

Increasing horizontal differentiation thus increases vertical differentiation within an organization because many subunits hierarchies come into being.
Horizontal differentiation avoids many of the problems of tall hierarchies because the development of numerous subunit hierarchies allows the organization to remain flat.
The problems associated with horizontal differentiation such as the development of divergent subunit orientations can lead to additional coordination and motivation problems. - Managers can control these problems by making wise choices concerning centralization, standardization and the influence of the informal organization.

Three specific steps of MBO:

1. Specific goals and objectives are established at each level of the organization.
2. Managers and their subordinates together determine the subordinates’ goals.
3. Managers and their subordinates periodically review the subordinates’ progress toward meeting goals.