Previously on

Cross-functional team - These teams are made up of employees from about the same hierarchical level but different functional areas of the organization.

Q&A

• What is a matrix structure? Advantages & disadvantages?
• Why do some organizations choose contemporary or team-based structures and are not limited with only traditional structures?
• How an organization can benefit from contemporary and team-based structures?

Authority—Establishing Organizational Relationships

Managerial hierarchy (also called the management pyramid) is defined by the levels of management within an organization. Generally, the management structure has three levels: top, middle, and supervisory management.

An organization with a well-defined hierarchy has a clear chain of command, which is the line of authority that extends from one level of the organization to the next, from top to bottom, and makes clear who reports to whom.

Authority is legitimate power, granted by the organization and acknowledged by employees, that allows an individual to request action and expect compliance. The delegation of authority makes the employees accountable to their supervisor.

A manager’s span of control (sometimes called span of management) is the number of employees the manager directly supervises. It can be as narrow as two or three employees or as wide as 50 or more.

A manager’s span of control (sometimes called span of management) is the number of employees the manager directly supervises. It can be as narrow as two or three employees or as wide as 50 or more.

Summary

Firms typically use traditional, contemporary, or team-based approaches when designing their organizational structure. Five basic types of departmentalization are commonly used in organizations: Functional, Product, Process, Customer, Geographic

Matrix structures combine two types of traditional organizational structures (for example, geographic and functional). Matrix structures bring together people

from different functional areas of the organization to work on a special project.

Work groups share resources and coordinate efforts to help members better perform their individual duties and responsibilities. Work teams require not only coordination but also collaboration, the pooling of knowledge, skills, abilities, and resources in a collective effort to attain a common goal.

The managerial hierarchy (or the management pyramid) comprises the levels of management within the organization, and the managerial span of control is the number of employees the manager directly supervises.