29. Vertical Differentiation
Vertical differentiation in the distribution of
decision-making authority.
Span of control (division of authority)
The number of subordinates that a single
manager directly manages.
30. Organizational Hierarchy Choices
Flat structures
Few organizational levels
Wide spans of control
Tall structures
Many organizational levels
Narrow spans of control
31. Horizontal Differentiation
Focus is on division and grouping of tasks to
meet business objectives.
Simple structure:
Characteristic of small entrepreneurial
companies.
Entrepreneur takes on most managerial roles.
No formal organization arrangements.
Horizontal differentiation is low.
33. Simple Structure:
Stage I:
• Entrepreneur
• Decision making tightly
controlled
• Little formal structure
• Planning short range/reactive
34. Functional Structure:
Stage II:
• Management team
• Functional specialization
• Delegation decision making
• Concentration/specialization in industry
41. Information & Control System
• Pay, reward system
• Budget allocations
• Information systems
• Rules/procedures
42. Human Resources
Task:
1. Helping employees to understand the strategy.
2. Augmenting employee commitment to the strategy.
3. Streamlining local effort with the strategy.
4. Inducing cross-system cooperation.