Exam 11: Designing Organizational Structure

The appropriate structure for an organization is based on four contingency variables: strategy,size,degree of environmental uncertainty,and ________.

In a short essay,describe the five common forms of departmentalization with examples and samples of advantage and disadvantages of each where possible.

Project structures tend to be rigid and inflexible organizational designs.

If top managers make key decisions with little input from below,then the organization is ________.

estructuring at Prairie Farm Equipment (Scenario) Jim Johnson is the CEO of Prairie Farm Equipment Corp, a major Canadian manufacturer. Prairie has been in business for more than 110 years and has been very profitable. Today, the company has a tall structure with formalized communication channels and rigid hierarchical relationships. All major decisions are made by Mr. Johnson. This arrangement has worked well until recently, when the company began to encounter some major global competition. Foreign companies have begun to export new, lower-priced products into the Canadian market. At the same time, foreign markets appear to be opening their doors to more Canadian products. A few days ago, one of the vice-presidents presented some exciting news about a major market opportunity overseas. Several managers were now working on an international expansion proposal to be presented at the next board meeting. As the company's strategy was beginning to change, Mr. Johnson realized that its structure would also need to change. But change how? The company was very large and used routine technology to produce its products. What should he do? -To effectively compete against lower-priced foreign manufacturers,Mr.Johnson concludes that Prairie needs to pursue a strategy of cost minimization.The efficiency and tight controls associated with this strategy are best achieved through a(n)________ structure.

Which type of organization structure assigns specialists from different functional departments to work on one or more projects led by a project manager?

In a short essay,list the three common traditional organizational designs.Describe the characteristics that are commonly associated with each.

Organizational Design at Custom Leather (Scenario) Lacey has been hired as a consultant for XYZ Consulting. Her first assignment is to work with one of XYZ's newest clients, Custom Leather, Ltd., a manufacturer of high-end leather furniture. Custom Leather was founded more than a decade ago with the idea that great-looking, comfortable leather furniture could be custom made and delivered to customers in 30 days. Traditionally, retailers stocked leather sofas to satisfy customers' desire to receive new furniture fast, which resulted in limited colour choices and styles. Traditional sofa manufacturers produced their products in large batches on standardized assembly lines. In contrast, Custom Leather offers 13 different styles in more than 70 different colours through a select group of retail outlets. Each sofa is built to the customer's individual requirements and is shipped within two to three weeks. However, the emergence of a new manufacturing technology has enabled some of the traditional competitors to offer greater customization, thereby reducing some of Custom Leather's competitive advantage. As a result, Custom Leather's president, Miles Standish, is considering several changes to their current work processes and organizational structure. -The traditional sofa manufacturers used which category of production?

In a short essay,briefly explain the concepts of mechanistic and organic structures; and the benefits and drawbacks of each.

Innovators need the efficiency,stability,and tight controls of the mechanistic structure in order not to get out of control.

Restructuring at Digital Arts (Scenario) Victor Lee is the founder and president of Digital Arts, a Vancouver-based company that makes games for popular electronic game consoles. The company has experienced tremendous growth over the years, but now Victor is concerned that the company's structure has become too tall and rigid. He explains, "Twenty years ago we started with five people and one product. Today we are a global operation with 500 people employed in six countries producing over 200 game titles." Digital Arts is currently organized into five specialized departments: product development, production, marketing, accounting, and human resources. To coordinate the workflow, many rules and regulations have been introduced. Victor now worries that the increased bureaucracy is beginning to stifle innovation. He ponders several restructuring options. -Twenty years ago,Digital Arts had a ________ structure.

Work teams composed of individuals from various departments are known as ________ teams.

The chain of command is a principle that states that a person should report to only one boss.

Which type of structure tends to work best with a cost minimization strategy?

The principle that each employee should report to only one manager is called ________.

Organizational structure is defined as ________.

Universal Office Supply has organized its sales department under its three main account types: wholesale,retail,and government.Universal is using ________ departmentalization.

Metro General Hospital (Scenario) Joyce is the chief administrator in charge of a department at Metro General Hospital. When she worked as a registered nurse at a smaller community hospital, Joyce enjoyed the flexible structure, minimal rules, and team approach to decision making by nurses, administrators, and doctors. However, the situation at Metro is different. Metro has a tall, rigid structure with many rules and procedures designed to standardize jobs and guide employee behaviour. One such rule requires that all decisions in Joyce's department must be signed off by her alone) As a result, Joyce seems to spend most of her time filling out forms and signing documents. She also feels that the numerous levels of hierarchy are unnecessary and place barriers between herself and her staff. Joyce is not exactly sure why things have to be so "organized" and is planning to talk to her boss about making some changes to increase flexibility and reduce the number of rules and procedures. -Which of the following best describes the type of organizational design at Metro General Hospital?

Departmentalization at Art & Craft Depot (Scenario) John is president of a chain of stores called Art & Craft Depot. He is aware that the structure of his organization must change in order to compete more effectively in today's global marketplace. However, he is not sure which structure would work best for his company. His company is currently organized under the following departments: accounting, human resources, sales, purchasing, and distribution. However, there are other choices available. He has considered reorganizing around their primary product groups: silk flowers, art supplies, craft supplies, pottery, and fabric. However, equally important are the different types of clients they serve, including homemakers, artists, interior decorators, industrial display contractors, and art schools. The business is growing, and they now have stores in six provinces across Canada. Furthermore, his customers seldom shop for just one type of item. For example, a customer who buys flowers will frequently purchase a vase and other supplies that are required to create a full floral arrangement. This means that individual customers often shop in several merchandise areas of the store. -If John bases the new structure on silk flowers,art supplies,craft supplies,pottery and fabric,they would be using ________ departmentalization.

Restructuring at Digital Arts (Scenario) Victor Lee is the founder and president of Digital Arts, a Vancouver-based company that makes games for popular electronic game consoles. The company has experienced tremendous growth over the years, but now Victor is concerned that the company's structure has become too tall and rigid. He explains, "Twenty years ago we started with five people and one product. Today we are a global operation with 500 people employed in six countries producing over 200 game titles." Digital Arts is currently organized into five specialized departments: product development, production, marketing, accounting, and human resources. To coordinate the workflow, many rules and regulations have been introduced. Victor now worries that the increased bureaucracy is beginning to stifle innovation. He ponders several restructuring options. -Victor begins to wonder if they would not be better off to simply refocus their efforts on what they have always done best: design games.They could shrink the company back to a small core of game designers and contract out the other major business functions.This strategy is most consistent with a ________ organization.