Organizational Structure & Design Flashcards

Which organizational structure groups employees by function (e.g., marketing, finance, operations) and is most common in smaller or single-product organizations?

Answer: Functional structure

A functional structure organizes employees by their specialized function or department, making it ideal for organizations with a single product line or limited complexity.

In a matrix organizational structure, employees typically report to:

Answer: Both a functional manager and a project manager

The defining feature of a matrix structure is dual reporting: employees report to both a functional manager (for expertise) and a project/product manager (for task direction).

Span of control refers to:

Answer: The number of subordinates a manager directly supervises

Span of control is the number of direct reports a single manager oversees, which directly influences organizational hierarchy and communication flow.

A wide span of control generally leads to:

Answer: Fewer management layers and a flatter organization

A wide span of control means each manager oversees many employees, reducing the need for multiple management layers and creating a flatter, more decentralized structure.

Which type of organizational structure is best suited for a large company that operates in multiple, distinct product markets with different customer needs?

Answer: Divisional structure

A divisional structure groups the organization by product, market, or geography, allowing each division to function semi-autonomously and respond to its specific market demands.

Centralization in organizational design means that:

Answer: Key decisions are made at the top levels of management

Centralization concentrates decision-making authority at the upper levels of the hierarchy, while decentralization delegates it to lower levels.

Which organizational design principle refers to the degree to which jobs are divided into specialized tasks?

Answer: Work specialization

Work specialization (also called division of labor) is the extent to which organizational tasks are subdivided into separate jobs, improving efficiency through focused expertise.