Chapter 6 – Organization structure and management systems. This chapter presents the following content: Evolution of the corporation, principles of organizational design, the role of hierarchy: bureaucratic control vs. modular integration, alternative structural forms, management systems. | Organization Organization Structure Structure and and Management Management Systems Systems OUTLINE Evolution of the corporation Principles of organizational design The role of hierarchy bureaucratic control vs. modular integration Alternative structural forms Management systems Evolution Evolution of of the the Modern Modern Corporation Corporation The business Strategic Organizational environment changes consequences Early Local markets Firms specialized amp Small firms. 19th Transport slow focused on local Simple manage- century Limited mechanization markets ment structures Late Introduction of Geographical and Functional struct- 19th railroads telegraph vertical expansion ures. Line staff industrialization separation. Accou- century nting systems Early Excess capacity in Product amp Development of 20th distribution. Growth multinational multidivisional of financial institut- diversification corporation century ions amp world trade General GeneralMotors Motors Organization OrganizationStructure Structure 1921 1921 Board of Directors President Executive Committee Financial GM Acceptance Legal General Staff Corporation Department Advisory Staff Chevrolet Sheridan Canadian Oldsmobile Buick Cadillac GM Export Division Division Division Division Division Division Company GM Truck Samson Oakland Inter- Scripps Division Tractor Division company Booth Division Parts Corp. Division Source A.P. Sloan My Years with General Motors Orbit Publishing 1972 p. 57. The The Basic Basic Tasks Tasks of of Organization Organization Achieving high levels of productivity requires SPECIALIZATION Specialization by individuals necessitates COORDINATION For coordination to be effective requires COOPERATION But goals of employees goals of owners THE AGENCY PROBLEM THE ORGANIZATIONAL CHALLENGE to design structure amp systems that Permit specialization Facilitate coordination by grouping individuals amp link groups with systems of communication decision making amp control Create incentives .