The network structure is a newer type of organizational structure, often seen as less hierarchical (or more "flat"), more decentralized, and more flexible, in which managers coordinate and control relations, both internal and external to the firm .
At the industry level, complex networks can include technological and innovation networks that may span several geographic areas and organizations.
As a decentralized structure, the network structure shows fewer tiers in the organizational structure, a wider span of control, and a bottom-to-top flow of decision making and ideas.
In the network structure, managers coordinate and control relations, both internal and external to the firm.
Managerial Assumption: McGregor Douglas McGregor was a management professor at the MIT Sloan School of Management who wrote a book called The Human Side of Management in 1960, which suggested motivating employees through authoritative direction and employee self-control.
In Theory Y, management assumes employees are ambitious and self-motivated and exercise self-control and generally enjoy mental and physical work duties.
Complex hierarchical structures are needed in order to offer a narrow span of control at every level of the organization.
Given the proper conditions, theory Y managers believe that employees will learn to seek out and accept responsibility and to exercise self-control and self-direction in accomplishing objectives to which they are committed.
Formal reporting relationships include lines of authority, decision responsibility, number of hierarchical levels, and span of managers control.
Managers may find delegation difficult, since control over the task assigned (and eventual outcome) is relinquished.
Organizational Structure and Control/Decision-Making Tall structure: A management structure characterized by an overall narrow span of management and a relatively large number of hierarchical levels; tight control; reduced communication overhead.
Flat structure: A management structure characterized by a wide span of control and relatively few hierarchical levels; loose control; facilitates delegation.
Formalization: The written documentation used to direct and control employees.
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