Key Concepts in Management Theory and Organizational Structure

Criticism of Frederick Taylor's Principles of Scientific Management

Frederick Taylor is a controversial figure in management history. His innovations in industrial engineering led to rapid increases in productivity, but at the same time, he has been accused of destroying the soul of work and of dehumanizing factories.

Defining Span of Control in Management

Span of control refers to the number of subordinates a supervisor can manage efficiently and effectively.

Line Authority Versus Staff Authority: Key Differences

Line authority involves direct and legitimate authority over subordinates.

Staff authority is an assistant function, as it guides line managers or functions in performing specific activities.

Delegation, Centralization, and Decentralization of Decision Making

The issue of delegation is fundamentally related to the degree of centralization or decentralization of decision making within an organization.

Centralization Defined

Centralization is a process where the concentration of decision making is held in a few hands. All subjects and actions at the lower level are subject to the approval of the top manager.

Decentralization Defined

Decentralization is a systematic delegation of authority at all levels of management.

Fundamentals of Herbert Simon's Bounded Rationality Theory

Bounded rationality is the idea that, in decision making, the rationality of individuals is limited by:

• The information they have available.
• The cognitive limitations of their mind.
• The finite amount of time they have to make a decision.

This theory was proposed by Herbert Simon as an alternative basis for the mathematical modeling of decision making, which traditionally views decision making as a fully rational process focused on finding an optimal choice given the information available.

The Matrix Organizational Structure

A Matrix organizational structure is an organizational structure that facilitates the horizontal flow of skills and information.

Potential Advantages

• Better coordination and control.
• Effective utilization of resources.
• Sufficient time for top managers.

Potential Disadvantages

• Costly structure.
• Problem of work specialization (potential ambiguity).
• Feeling of insecurity (due to dual reporting lines).