A disadvantage of the traditional functional approach to departmentalization is that

Organization design is the overall configuration of structural components that define jobs, groupings of jobs, the hierarchy, patterns of authority, approaches to coordination, and line-staff differentiation into a single, unified organizational system.

The structural components discussed previously can be arranged to create a variety of organization designs. Organizations manipulate these components to create a design that supports their mission and the achievement of their goals and objectives.

Early, so-called universal, approaches focused on identifying ideal designs that could be used in a variety of settings with equal effectiveness. Two universal approaches are the bureaucratic model and the System 4 approach.

The stereotypical belief about bureaucracies is that they are inflexible, monolithic organizations with uncaring employees who create 'red tape'.

The bureaucratic model of organizations was described by Max Weber, a German sociologist. Weber believed that the bureaucratic model was an ideal approach to structuring organizations based on a rational set of guidelines and procedures.

Clear division of labor, consistent rules, hierarchy of positions, impersonality, and employment and advancement based on technical expertise.

Advantages:

Bureaucracy can enhance efficiency, logic, and rationality in large organizations.

Disadvantages:

Bureaucracy tends to lead to inflexibility and rigidity, which slow decision making and create a general inability to respond to rapid changes or crises. Because of the drawbacks, businesses and other types of organizations looked for alternative approaches.

Rensis Likert distinguished between what he called System 1 and System 4 organizations.

System 1 is the traditional bureaucratic organization. The antithesis of System 1 is System 4.

System 1 organizations are relatively formal, rigid, and mechanistic. System 4 organizations are likely to be informal and flexible.

Likert's model suggests that System 1 organizations should try to change and become more like System 4 organizations. Because such a radical change would be difficult for most organizations to manage, Likert also describes intermediate stages: System 2 and System 3.

Blindly adopting a System 4 design was no more a guarantee of success than was relying on the bureaucratic model. Most managers recognized that the most appropriate design for an organization depends on a number of variables.

Key situational determinants of organization design: technology, the organizational environment, and organization size and life cycle.

Technology, the set of processes an organization uses to transform various resources into products or services, can have a major impact on any of the structural components previously discussed.

Joan Woodward, one of the first researchers to identify the link between technology and organization design, defined three basic types of technology:

• Unit or small-batch technology (the least complex):

Products are custom-made or produced in small quantities.

• Large-batch or mass production technology:

Products are manufactured in assembly-line manner.

• Continuous-process technology (the most complex):

Products are transformed from raw materials into finished goods through a series of machine transformations that change the composition of the materials.

When Woodward classified organizations by technology, the organizations within each set had similar designs. Woodward thus concluded that different forms of technology are likely to necessitate different types of organization design.

The environment of an organization comprises all the factors and conditions external to the organization that might affect the organization.

• Tom Burns and G.M. Stalker were among the first to identify a relationship between an organization's environment and its design. They classified environments as stable or unstable.

• Stable environments are relatively placid and do not change very much. Organizations in stable environments resemble System 1 organizations. Burns and Stalker called them mechanistic organizations.
• Unstable environments are more volatile and prone to rapid and major changes. Organizations in unstable environments have the basic characteristics of System 4 organizations. Burns and Stalker called them organic organizations.

• Paul R. Lawrence and Jay W. Lorsch extended Burns and Stalker's studies and found that subunits or department adapt to their environment just as the overall organization does.

• Lawrence and Lorsch identified two important concepts: differentiation, the extent to which the organization is broken down into subunits or departments; and integration, the extent to which subunits created through differentiation must coordinate their activities and functions.
• Organizations need more differentiation when they are faced with unstable and dynamic environments; and the more an organization is differentiated, the more it needs integration.

Organization size refers to how large the organization is, usually in terms of the number of full-time employees. Organization size can affect organization design.

Researchers at the University of Aston found that large organizations tend to have more job specialization, more standard operating procedures, more rules and regulations, and more decentralization than small organizations. An organization's size is related to its life cycle.

Life cycle is the organization's maturity relative to that of other organizations. Organizations tend to follow a fairly predictable pattern of growth. This pattern is one of creation, growth, and stability.

The design of an organization depends on the technology the organization uses, the limits and potentials of its environments, and the life cycle stage it is in. These factors influence specialization, departmentalization, and coordination. Although every organization has its own unique design, five basic structural arrangements can be identified.

The U-form organization (U stands for unity), also called functional design, relies almost exclusively on the functional approach to departmentalization . The U-form design is used to implement a single-product strategy. Because of the emphasis on functional activities, coordination is extremely important.

Although culture is not strictly a part of organization design, culture and design must complement each other in order for the organization to function smoothly.

Organizational culture is the set of values that defines for members what the organization stands for, how it operates, and what it considers important. The organizational culture communicates important information about acceptable and unacceptable behavior.

Most managers acknowledge that a strong and clear organizational culture helps provide a common frame of reference for managerial decision making and other organizational activities.

An organization's culture normally forms over time and is often deeply influenced by the values of the firm's founders. As organizational culture evolves, various symbols, stories, heroes, slogans, and ceremonies emerge. These facilitate the perpetuation of the culture, the change is often made in response to the firm's inability to carry out its strategic goals.

Which of the following is not an advantage of functional departmentalization?

Which of the following is a disadvantage of functional departmentalization?

What is the primary disadvantage of customer departmentalization?

What are the advantages of functional departmentalization?