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Summary Principles of organization

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- Principles of organization
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A snapshot of the summary - Principles of organization

  • Chapter 5

  • What is the system called that is used to evaluate subordinates on their ability to achieve specific organisational goals and to meet operating budgets? What three terms is this system based on?
    Management by objectives (MBO)

    1. Goals of the organization at each level. 
    2. Managers and subordinates determine subordinates goals 
    3. Managers and subordinates review sub-ordinates progress towards the goal 
  • What is the informal organisation? What influence does the informal organisation have on the overall organisation?
    The network of personal relationships that develop over time that has nothing to do with the formal structure of the organisation.

    It influences the productivity and motivation in the organisation. 
  • Chapter 6

  • What is the structure design called that groups people together based on their common expertise and experience or because they use the same resources?
    Functional structure
  • What are the different kinds of problems in a functional structure?
    • Communication problems
    • Measurement problems
    • Location problems
    • Customer problems
    • Strategic problems
  • When is the functional structure appropriate?
    • Limits itself to producing a small number of similar products 
    • Produces those products in one or few locations 
    • Sells them to only one general type of customer
  • What is a matrix structure?
    A structure that groups people by function and by product at the same time.
    • Two-boss employees -> Team members report to product manager and functional manager
    • Matrix structure has an organic structure 
    • Flat hierarchy - high horizontal integration 
  • Product team structure and the matrix structure have similarities in their structure but that is the difference between a product team structure and a matrix structure?
    Product team structure:
    • One boss
    • Team members are fixed

    Matrix structure:
    • Two bosses
    • Team members move from team to team
  • What does the multidivisional matrix structure provide? Why would a company switch from multidivisional to multidivisional matrix?

    A multidivisional structure provides for more integration between corporate and divisional managers and between divisional managers.

    Why change? Divisional structure: High degree of differentiation -> communication and coordination problems 
    • A matrix structure can help this problem
  • What is a hybrid structure? What kinds of organisations use this structure?
    It is a structure of a larger organisation that has many divisions and simultaneously uses many different types of organisational structure.
  • What are the four advantages and disadvantages of a matrix structure?
    Advantages: 
    • Cross functional teams -> Low differentiation between teams, high integration 
    • Communication between teams -> Learning opportunities from each other 
    • Specialised employees used where needed 
    • Focus on cost and quality at the same time 
      • Functional manager -> Quality 
      • Product manager -> Costs 


    Disadvantages
    • Lacks bureaucratic structure 
    • Lack of defined hierarchy of authority 
      • Informal organisation is built to create structure 
    • Must be carefully managed
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