Information Technology Reference
In-Depth Information
Traditional Organizational Structure
A traditional organizational structure , also called a hierarchical structure, is like a managerial
pyramid where the hierarchy of decision making and authority flows from the strategic man-
agement at the top down to operational management and nonmanagement employees.
Compared to lower levels, the strategic level, including the president of the company and
vice presidents, has a higher degree of decision authority, more impact on corporate goals,
and more unique problems to solve (see Figure 2.4). In most cases, major department heads
report to a president or top-level manager. The major departments are usually divided ac-
cording to function and can include marketing, production, information systems, finance
and accounting, research and development, and so on (see Figure 2.5). The positions or
departments that are directly associated with making, packing, or shipping goods are called
line positions . A production supervisor who reports to a vice president of production is an
example of a line position. Other positions might not be directly involved with the formal
chain of command but instead assist a department or area. These are staff positions, such as a
legal counsel reporting to the president.
traditional organizational
structure
An organizational structure in which
major department heads report to a
president or top-level manager.
Figure 2.4
Decision dimensions
High
A simplified model of the
organization, showing the
managerial pyramid from top-
level managers to
nonmanagement employees.
Strategic
management
Tactical
management
Operational
management
Low
Nonmanagement employees
Decision
authority
Impact on
corporate
goals
Uniqueness
of problems
Marketing
Accounting
Manufacturing
Other functional
areas
Figure 2.5
A. Bailey,
Legal counsel
S. Burry,
President
Staff position
A Traditional Organizational
Structure
C. Rodrig,
VP, Information
systems
W. Osborn,
VP, Human
resources
B. Wang,
VP, Accounting
R. Henderson,
VP, Marketing
K. Kelly,
VP, Production
Line
positions
S. Samuel,
Supervisor
L. Bashran,
Supervisor
flat organizational structure
An organizational structure with a
reduced number of management
layers.
Today, the trend is to reduce the number of management levels, or layers, in the tradi-
tional organizational structure. This type of structure, often called a flat organizational
structure , empowers employees at lower levels to make decisions and solve problems without
needing permission from midlevel managers. Empowerment gives employees and their man-
agers more responsibility and authority to make decisions, take action, and have more control
over their jobs. For example, an empowered sales clerk could respond to certain customer
requests or problems without needing permission from a supervisor. Policies and programs
that let employees share ownership in a company flatten the organizational structure. The
Clark County School District in Nevada, for example, is using empowerment to give school
empowerment
Giving employees and their man-
agers more responsibility and
authority to make decisions, take
certain actions, and have more
control over their jobs.
 
 
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