JOB DESIGN/SPECIALIZATION AND DEPARTMENTALIZATION

Building Blocks of Organizing

1. Job design
A.  Job design is an essential part of organizational structure.
      1.  Job design is the specification of task activities, usually repeated on a regular basis, associated
      with each particular job.
            a.  Task activities need to be grouped in reasonably logical ways for each job.
            b.  The way the jobs are configured influences employee motivation.
      2.  Work specialization is the degree to which the work necessary to achieve organizational goals
            is broken down into various jobs.

In Work specialization the tasks in an organization are divided into separate jobs. Another term
for this is division of labor.
     1.  Work specialization can be traced back to the writings of Adam Smith.
     2.  Work specialization was seen as a way to make the most efficient use of workers’ skills because
          workers would be placed in jobs according to their skills and paid accordingly.
     3.  Other advantages of work specialization included improvement in employees’ skills at
          performing a task, more efficient employee training, and encouragement of special inventions
          and machinery to perform work tasks.
     4.  Work specialization was viewed as a source of unending productivity improvements. And it
          was—up to a certain point.
     5.  The human diseconomies from work specialization included boredom, fatigue, stress, lowered
          productivity, poor quality of work, increased absenteeism, and higher job turnover.

B.  There are four approaches to job design.
    1.  Job simplification is the process of configuring or designing jobs so that job holders have
         only a small number of narrow, repetitive, activities to perform.
               a.  The concept of job simplification was championed by economist Adam Smith and by
Frederick Taylor
               b.  Training new workers becomes relatively easy and workers become almost interchangeable.
               c.  The advantage is that major production efficiencies may be gained.
               d.  The disadvantages are that, if carried too far, job satisfaction may be destroyed by narrow,
                    repetitive, boring jobs and the firm may become too inflexible to serve customers with
                    varying needs.

Types of Departmentalization

Departmentalization is the clustering of individuals into units and units into departments and larger units in order to facilitate achieving organizational goals.
    1.  An organization design is an overall pattern of departmentalization.
    2.  There are four major patterns of departmentalization.
             a.  The functional structure groups jobs into units based upon similarity of expertise, skills, and
                  work activities, e.g., marketing, accounting.
             b.  The divisional structure groups jobs into units according to the similarity of products or
                  markets.
             c.  The hybrid structure combines aspects of both the functional and divisional forms, with some
                  jobs grouped into departments by functions and other grouped by products or markets.
             d.  The matrix structure superimposes a horizontal set of divisional reporting relationships onto a
                  hierarchical functional structure.

Assessing Structural Alternatives

Each of the four most common types of departmentalization has major advantages and disadvantages.
A.  Functional structure is a type of departmentalization in which positions are grouped according to
      their main functional (or specialized) area.
      1.  Typical functional form of organization has several major advantages.
      2.  The functional form of organization has several major advantages.
           a.  In-depth development of expertise is encouraged.
           b.  Employees have clear career paths within their function.
           c.  Resources are used more efficiently.
           d.  Economies of scale may be possible because of specialized people and equipment.
           e.  Intradepartmental coordination is facilitated.
           f.  Specialized technical competencies may be developed and may constitute a competitive
               advantage.
      3.  The functional form of origination has several disadvantages.
           a.  Response time on multifunctional problems may be slow due to coordination problems.
           b.  Major issues and conflicts between departments may have to be resolved by top
                management, with resultant delays.
           c.  Bottlenecks due to sequential tasks.
           d.  Over specialization may lead to a restricted view of the department’s and the organization’s
               needs.
           e.  Performance may be difficult to measure because several functions are responsible for
                organizational results.
           f.  Managers may be trained too narrowly in a single department.

4.  The functional form of departmentalization is more appropriate under certain circumstances.
     a.  The organization is small or medium-sized.
     b.  There is a limited number of related products or services, or a relatively homogeneous set
          of customers or clients.
     c.  The organization is large and diverse, but the environment is stable.

B. Divisional structure is a type of departmentalization in which positions are grouped according to
similarity of products, services, or markets.
1.  Divisional structures are also called “self-contained structures” because each division contains the major functional resources it needs to pursue its own goals with little or no reliance on
other divisions.
2.  The three major forms of divisional structure differ according to the rationale for forming the divisions.
a.  Product divisions are divisions created to concentrate on a single product or service or at least a relatively homogeneous set of products or services.
b.  Geographic divisions are divisions designed to serve different geographic areas.
c.  Customer divisions are divisions set up to service particular types of clients or customers.

3.  Divisional structure has several major advantages.
a.  Divisions can react quickly to changes in the environment.
b.  Coordination across functions is simplified.
c.  Each division can focus upon serving its customers.
d.  The division’s goals can be emphasized.
e.  Performance is more easily measured.
f.  Managers can be trained in general management skills.

4.  Divisional structure has several disadvantages.
a.  Duplication of resources in each division often occurs.
b.  In-depth expertise may be sacrificed.
c.  Divisions may compete for limited resources.
d.  Expertise across divisions may not be shared.
e.  Innovations may be restricted to single divisions.
f.  Divisional goals may take priority over overall organizational goals.

5.  The divisional structure is likely to be used in large organizations where substantial differences
exist among products or services, geographic areas, or customers served.