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coordinate the separate activities?
The first issue, specialization, is reflected in the organizational structure of the
firm: the departments or divisions that focus on particular activities. This is "horizontal"
specialization. The different levels of management we refer to as "vertical"
specialization. We can obtain a picture of the way the firm has chosen to specialize by
inspecting its organization chart (see Figure 5.1). The most basic form of specialization
is by function, which is explored in the next section. Staff can also be grouped in other
ways: by product or product group, by type of customer, by market or geography, or by
project. There are advantages to grouping in particular ways as it helps to focus the
development of expertise, and it facilitates the sharing of knowledge. However,
specializing and grouping people around, for example, a project can lead to a gradual
reduction in particular functional competences that are combined to deliver the project.
This can happen because specialist engineers spend little time with other engineering
colleagues, which reduces the flow of ideas and experience between these specialists.
So each way of specializing has advantages and some disadvantages.
The second issue, coordination, is achieved through organizational processes that are
designed to ensure that the separate activities are linked together in such a way that the
overall mission of the firm is achieved. Six basic ways of achieving coordination can be
identified, as follows:
a. Direct, face-to-face discussion and communication. That is, between those
engaged in different activities. This has been called "mutual adjustment". It can
be a purely informal activity assisted by locating people in close proximity, or it
can be facilitated by setting up formal meetings, project teams or task forces.
The advantages of this coordinating mechanism are that it can help to achieve
rapid changes to the way things are done, and it can encourage creativity by
bringing together different specialists to work on a problem. The disadvantages
are that it might be an ad hoc process leading to poor coordination; it can be
time-consuming if extensive consultations are required, and it is not appropriate
if large numbers of people are involved.
b. Direct supervision. Here instructions about how to do parts of the overall task
are issued by the manager to subordinates, and as long as the staff carry out their
instructions the overall task is accomplished. This coordinating mechanism
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