Assigned Readings:
Chapter 3. Fundamentals of Organization Structure.
Chapter 4. The External Environment.
Initial Postings: Read and reflect on the assigned readings for the week. Then post what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding in each assigned textbook chapter.Your initial post should be based upon the assigned reading for the week, so the textbook should be a source listed in your reference section and cited within the body of the text. Other sources are not required but feel free to use them if they aid in your discussion.
Also, provide a graduate-level response to each of the following questions:
The manager of a consumer products firm said, “We use the brand manager position to train future executives.”  Why do you think the brand manager position is considered a good training ground?  Discuss.
[Your post must be substantive and demonstrate insight gained from the course material. Postings must be in the student’s own words – do not provide quotes!]
Chapter
Chapter 4
The External Environment
4
Organization Theory and Design
Thirteenth Edition
Richard L. Daft
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
Learning Objectives (slide 1 of 2)
1. Describe how the influence of the general environment on
an organization is different from that of the task
environment.
2. Explain the difference between environmental complexity
and environmental dynamism.
3. Describe how complexity and dynamism together can be
used to assess the level of uncertainty in an organization’s
environment.
4. Explain approaches organizations can use to adapt to
complexity and dynamism in a changing environment.
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
2
Learning Objectives (slide 2 of 2)
5. Explain how the environment affects organizational
differentiation and integration.
6. Describe how the environment affects organic versus
mechanistic management processes.
7. Describe the techniques organizations can use to control
financial resources in the external environment.
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
3
The Organization’s Environment
• Everything that exists outside the boundary of
the organization and has the potential to
affect all or part of the organization
–Domain is the chosen environmental field of
action
–The environment also contains sectors, or
subdivisions, that contain similar elements
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
4
An Organization’s Environment
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
5
The Task Environment
• Sectors that have a direct impact on the
organization’s ability to achieve its goals:
–Industry sector
–Raw materials sector
–Market sector
–Human resources sector
–International sector
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
6
General Environment
• Sectors that indirectly impact an organization:
–Government sector
–Natural sector
–Sociocultural sector
–Economic conditions
–Technology sector
–Financial resources
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
7
International Environment
• This sector can directly affect many
organizations and has become extremely
important
• International events influence domestic
sectors of the environment
• All organizations face uncertainty when they
enter international markets
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
8
The Changing Environment
• As the environment becomes more complex,
events become less stable
• As financial resources become less available,
the level of uncertainty increases
• The environment influences organizations
through:
1. The need for information changes
2. The need for resources changes
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
9
Elements of Uncertainty
• Uncertainty: Lack of sufficient information
about environmental factors and difficulty
predicting external changes
• Complexity: Number and dissimilarity of
external elements, such as suppliers
• Dynamism: Whether the organization
operates in a stable or unstable environment
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
10
Factors Causing Uncertainty
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
11
Dimensions of Environmental
Uncertainty
• Simple, stable environment: Low uncertainty
• Complex, stable environment: Somewhat
greater uncertainty
• Simple, unstable environment: Even greater
uncertainty
• Complex, unstable environment: Greatest
uncertainty
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
12
Framework for Assessing
Environmental Uncertainty
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
13
Adapting to Complexity and Dynamism
• Organizations need the right fit between internal
structure and the external environment
–Adding positions and departments
–Building relationships
• Buffering roles
• Boundary-spanning roles (such as business intelligence and
competitive intelligence)
–Differentiation and integration
–Organic vs. mechanistic management processes
–Planning, forecasting, and responsiveness
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
14
Organizational Departments Differentiate
to Meet Needs of Sub-environments
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
15
Differences in Goals and Orientations
Among Organizational Departments
Characteristic R&D Department
Manufacturing
Department
Sales
Department
Goals
New developments,
quality
Efficient production
Customer
satisfaction
Time horizon
Long
Short
Short
Interpersonal
orientation
Mostly task
Task
Social
Formality of
structure
Low
High
High
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
16
Environmental Uncertainty and
Organizational Integrators
Industry
Plastics
Foods
Container
Environmental
uncertainty
High
Moderate
Low
Departmental
differentiation
High
Moderate
Low
Percent
management in
integrating roles
22
17
0
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
17
Mechanistic and Organic Forms
Mechanistic
• Tasks are specialized and
rigidly defined
• There is a strict hierarchy of
authority and control
• Knowledge and control of
tasks are centralized
• Communication is vertical
Organic
• Tasks are adjusted and
redefined through
teamwork
• There is less of a hierarchy
of authority and control
• Knowledge and control of
tasks are decentralized
• Communication is
horizontal
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
18
Contingency Framework for Uncertainty and
Organizational Responses
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
19
Dependence on Financial Resources
• Resource-dependence perspective means
organizations depend on the environment but
strive to acquire control over resources to
minimize dependence
–Organizations are vulnerable if resources are
controlled by other organizations
–To minimize vulnerabilities, organizations will
team up with others when resources are scarce
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
20
Influencing Financial Resources
• To maintain a balance between dependence
on other organizations and preserving their
own independence, organizations modify,
manipulate, or control elements of the
external environment
• Two strategies to achieve this balance:
–Establishing formal relationships
–Influencing key sectors
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
21
Organizing Strategies for Controlling
the External Environment
Establishing Formal Relationships
Influencing Key Sectors
1. Acquire an ownership stake
2. Form joint ventures and
partnerships
3. Lock in key players
4. Recruit executives
5. Use advertising and public
relations
1. Change where you do
business (your domain)
2. Use political activity,
regulation
3. Join in trade associations
4. Avoid illegitimate activities
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
22
Relationship Between Environmental
Characteristics and Organizational Actions
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
23
Organizational Design Essentials (slide 1 of 2)
• An organization’s environment can be understood by
analyzing its domain, which defines the external sectors with
which the organization will interact to accomplish its goals.
• Changes in the environment can be described along three
primary dimensions: dynamism, complexity, and abundance.
• The dimensions of dynamism (stable―unstable) and
complexity (simple—complex) can be combined into a
framework for assessing environmental uncertainty.
• Organizations adapt to complexity and dynamism by adding
specific departments and functions to deal with uncertainties
and by establishing buffering and boundary-spanning roles.
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
24
Organizational Design Essentials (slide 2 of 2)
• The more complex the environment, the greater
differentiation within the organization.
• An organization that operates in a stable environment can
function well with a mechanistic structure.
• An organization that operates in a rapidly changing
environment needs a more organic structure to perform well.
• When risk is great or resources are scarce, the organization
can establish linkages, such as acquisitions and joint ventures,
that minimize risk and maintain a supply of scarce resources.
• Systematic patterns exist in the relationship between an
organization and its external environment.
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
25
Chapter
Chapter 3
Fundamentals of Organization
Structure
3
Organization Theory and Design
Thirteenth Edition
Richard L. Daft
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
Learning Objectives
1. Define the three key components of organization structure.
2. Discuss the differences you see between the vertical and
horizontal information-sharing aspects of structure.
3. Describe how relational coordination differs from other
horizontal coordination mechanisms.
4. Identify the strengths and weaknesses of five common
departmental grouping options, including functional,
divisional, matrix, virtual, and holacracy.
5. Describe the symptoms of structural deficiency within an
organization.
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
2
Organization Structure
• Key components
– Designation of formal positions and reporting relationships
– Identification of the grouping together of individuals into
departments and of departments into the total
organization
– Inclusion of the design of systems to ensure effective
communication, coordination, and integration of efforts
across departments
• Organization chart: The visual representation of a
whole set of underlying activities and processes
in an organization
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
3
A Sample Organization Chart
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
4
Information-Sharing Perspective
on Structure
• Vertical and horizontal information flow
–Vertical linkages are designed primarily for control
–Horizontal linkages are designed for coordination
and collaboration
–Hierarchy levels at which decisions are made
• Centralized: Decision authority is located near the top
of the organization.
• Decentralized: Decision authority is pushed downward
to lower organization levels
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
5
Efficiency versus Learning Outcomes
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
6
Vertical Information Sharing
• Vertical linkages coordinate activities
between the top and the bottom of the
organization and are designed primarily for
control of the organization
–Hierarchical referral
–Rules and plans
–Vertical information systems
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
7
Horizontal Information Sharing and
Collaboration
• Horizontal linkages provide opportunities for
communication and coordination horizontally
across organizational departments
–Information systems
–Liaison roles
–Task forces
–Full-time integrator
–Cross-functional teams
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
8
Project Manager Location in the
Structure
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
9
Teams Used for Horizontal Coordination
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
10
Relational Coordination
• Frequent, timely, problem-solving communication
carried out through relationships of shared goals,
shared knowledge, and mutual respect
• Relational coordination is part of the fabric of the
organization
• Employees coordinate and collaborate directly across
units
• Rewards are based on team efforts and
accomplishments
• Managers create specific cross-functional roles that
promote coordination across boundaries
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
11
Ladder of Mechanisms for Horizontal
Linkage and Coordination
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
12
Organization Design Alternatives
• Required work activities
• Reporting relationships
• Departmental grouping options
–Functional
–Divisional
–Matrix
–Virtual network
–Holacracy team
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
13
Structural Design
Options
for Grouping
Employees
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
14
Functional Structure
• Activities are grouped by common function
• All specific skills and knowledge are
consolidated
• The functional structure is a prevalent
approach, but few companies can respond in
today’s environment without horizontal
linkages
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
15
Functional Structure:
Strengths & Weaknesses
Strengths
1. Allows economies of scale
within functional
departments
2. Enables in-depth
knowledge and skill
development
3. Enables organization to
accomplish functional
goals
4. Is best with only one or a
few products
Weaknesses
1. Slow response time to
environmental changes
2. May cause decisions to pile
on top; hierarchy overload
3. Leads to poor horizontal
coordination among
departments
4. Results in less innovation
5. Involves restricted view of
organizational goals
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
16
Divisional Structure
• Separate divisions are responsible for individual
products, services, product groups, major projects or
programs, divisions, businesses, or profit centers
• Grouping is based on organizational outputs
• Organizations tend to shift from functional to
divisional structures as they become more complex
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
17
Reorganization from Functional
to Divisional Structure
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
18
Divisional Structure:
Strengths & Weaknesses
Strengths
Weaknesses
1.
1.
2.
3.
4.
5.
6.
Suited to fast change in unstable
environment
Leads to customer satisfaction
because product responsibility
and contact points are clear
Involves high coordination
across functions
Allows units to adapt to
differences in products, regions,
customers
Best in large organizations with
several products
Decentralizes decision making
2.
3.
4.
Eliminates economies of scale in
functional departments
Leads to poor coordination
across product lines
Eliminates in-depth competence
and technical specialization
Makes integration and
standardization across product
lines difficult
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
19
Geographic Structure
• Groupings are based on the geographical locations of
the organization’s users or customers
• Many multinational corporations are organized by
country
• Managers and employees focus on specific geographic
regions
• Strengths and weaknesses are like those of a divisional
structure
• Horizontal coordination within a region is emphasized
rather than linkages across regions or to a national
office
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
20
Geographic Structure Example
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
21
Matrix Structure
• A matrix is multifocused with strong horizontal
linkage
• Product divisions and functional structures
(horizontal and vertical) are implemented
simultaneously
• Product managers and functional managers have
equal authority within the organization, and
employees report to both of them
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
22
Matrix Structure Example
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
23
Conditions for Matrix Structure
• Condition 1: Pressure exists to share scarce
resources across product lines
• Condition 2: Environmental pressure exists for
two or more critical outputs
• Condition 3: The environmental domain of the
organization is both complex and uncertain.
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
24
Matrix Structure: Strengths & Weaknesses
Strengths
Weaknesses
1.
1.
2.
3.
4.
5.
Achieves coordination necessary
to meet dual demands from
customers
Flexible sharing of human
resources across products
Suited to complex decisions and
frequent changes in unstable
environment
Provides opportunity for both
functional and product skill
development
Best in medium-sized
organizations with multiple
products
2.
3.
4.
5.
Causes participants to experience
dual authority, which can be
frustrating and confusing
Means participants need good
interpersonal skills and extensive
training
Is time consuming; involves
frequent meetings and conflictresolution sessions
Will not work unless participants
understand it and adopt collegial
rather than vertical-type
relationships
Requires great effort to maintain
power balance
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
25
Virtual Network Structure and
Outsourcing
• Most common strategy to extend horizontal
coordination beyond the boundaries of the
organization is outsourcing (contracting out
certain tasks/functions)
• A virtual network (or modular) structure
subcontracts most of its major functions to
separate companies
• The virtual network organization serves as a
central hub with contracted experts
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
26
Virtual Network Structure Example
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
27
Virtual Network Structure:
Strengths and Weaknesses
Strengths
Weaknesses
1.
Enables even small organizations
to obtain talent and resources
worldwide
1.
Managers do not have hands-on
control over many activities and
employees
2.
Gives a company immediate scale
and reach without huge
investments in factories,
equipment, or distribution
facilities
2.
Requires a great deal of time to
manage relationships and potential
conflicts with contract partners
3.
There is a risk of organizational
failure if a partner fails to deliver or
goes out of business
4.
Employee loyalty and corporate
culture might be weak because
employees feel they can be replaced
by contract services
3.
4.
Enables the organization to be
highly flexible and responsive to
changing needs
Reduces administrative overhead
costs
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
28
Holacracy Team Structure
• The holacracy approach reflects an organizational
design shift toward self-management.
• “Circles” (the holacracy term for teams) are the basic
unit and building block of structure
• Each circle shares a common purpose and has decisionmaking authority over its work
• Each employee performs a variety of roles, generally
on 3–4 teams at the same time
• A holacracy team structure typically starts with a
written guideline, and employees ratify a constitution
that outlines the rules by which circles are created,
changed, or removed
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
29
Holacracy Team Structure Example
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
30
Holacracy Team Structure:
Strengths and Weaknesses
Strengths
Weaknesses
1.
1.
2.
3.
4.
5.
Promotes a focus on teamwork
and collaboration
Promotes rapid, innovative
responses to customer needs
Each employee has a broader
view of the organization’s
purpose
Decisions are made close to the
work
Improves employee growth via
sharing responsibility, making
decisions, and being
accountable for outcomes
2.
3.
4.
5.
Determining individual and team
responsibilities is time
consuming
Requires changes in
management philosophy and
culture
Traditional managers may baulk
when they have to give up
power and authority
Requires significant training of
employees in social skills
Can limit in-depth skill
development in a specific
function
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
31
Application of Structural Design
• Most large organizations often combine
characteristics of various approaches tailored to
different parts of the organization
• Structural alignment aligns structure with
organizational goals
• Symptoms of structural deficiency:
– Absence of collaboration among units
– Delay or lack of quality in decision making
– Lack of innovative response to a changing environment
– Decline in employee performance
– Unmet organizational goals
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
32
Relationship of Structure to Organization’s
Need for Efficiency vs. Learning
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
33
Organizational Design Essentials (slide 1 of 2)
• Organization structure designates formal positions and
reporting relationships, identifies the grouping of
individuals into departments, and provides mechanisms
for linking and coordinating organizational elements into
a coherent whole.
• Organization structure can be designed to provide
vertical and horizontal information linkages based on the
information processing required to meet the
organization’s overall goal.
• Functional grouping and divisional grouping are the two
most common approaches to structural design.
• The matrix structure attempts to achieve an equal
balance between the vertical and horizontal dimensions
of structure.
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
34
Organizational Design Essentials (slide 2 of 2)
• A virtual network structure extends the concept of
horizontal coordination and collaboration beyond the
boundaries of the organization.
• The most widely used model of self-management is the
holacracy team structure.
• Mixing structural characteristics enables the
organization to take advantage of the strengths of
various structures and avoid some of the weaknesses.
• The organizational chart is a guideline to encourage
people to work together, but management must
implement the structure and carry it out.
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or part.
35

Purchase answer to see full
attachment