Organization Behavior


Leadership in Action
Human Relations and Organizational Behavior

Smith & Falmouth (S & F) is a midsize tele-shopping and mail order network with operations in the United States and Canada.   The company has recently opened a new division, S & F Online, that company leaders hope will result in an increased profit and a competitive advantage in on-line sales.   S & F, the parent company of the on-line division, has a typical hierarchical structure with decisions flowing from senior leaders to management teams and project leaders who in turn direct the activities of teams under their jurisdiction.
In organizations with a formal hierarchy, power is given to individuals who direct work and allocate resources through direct supervision, and communication is vertical rather than horizontal (McShane & VonGlinow, 2005).   This form of organizational structure is referred to as centralized because decisions are typically made by a small group of people within the organizational hierarchy (McShane & vonGlinow, 2005, p. 451).   In contrast, organic organizational structures have very little formal or central decision making and allow decisions to be made at the local operational level allowing management to adjust quickly to changing needs.   Communication is horizontal rather than vertical (McShane & VonGlinow, 2005, p. 453).     Team-based and networks are additional types of organizational structures. Team-based structures have a flat organizational design and consist of self-directed work groups whose work is organized around a specific product or customer type (McShane & VonGlinow, 2005, p.461).   Network structures comprise a group of many organizations who form alliances centered on providing a specific product or service. Typically   a central firm serves to direct all processes within the network alliance (McShane & VonGlinow, 2005, p. 463).   Each organizational type has within its structure both a formal and an informal...