Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part...

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Page 1: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

Basic Basic

Organization Organization

DesignsDesignswww.epowerpoint.comwww.epowerpoint.com

Page 2: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

Where We AreWhere We Are

Part 1 Introduction

Part 2 Planning

Part 3 Organizing

Part 4 Leading

Part 5 Controlling

Part 3 Organizing

Chapter 5 Basic Organization Designs

Chapter 6 Staffing and Human Resource Management

Chapter 7Managing Change and Innovation

Chapter 5 Basic Organization Designs

Page 3: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

Chapter GuideChapter Guide

• 6 Basic elements of organization structure– Work specialization, chain of command,

span of control, authority and power, degree of centralization, departmentalization

• 5 Types of organization design – Simple structure, bureaucracies, matrix

structure, team based structure, boundaryless organization

Page 4: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

Organizational Organizational StructureStructure

The formal

arrangement

of jobs

within an

organization.

Page 5: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

Work SpecializationWork SpecializationWork SpecializationWork Specialization Chain of CommandChain of CommandChain of CommandChain of Command

Span of ControlSpan of ControlSpan of ControlSpan of Control Authority and Authority and ResponsibilityResponsibilityAuthority and Authority and ResponsibilityResponsibility

DepartmentalizationDepartmentalizationDepartmentalizationDepartmentalizationDegree of Degree of CentralizationCentralization

Degree of Degree of CentralizationCentralization

Basic Elements of StructureBasic Elements of StructureBasic Elements of StructureBasic Elements of Structure

Basic elements: Overview

Page 6: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

Work SpecializationWork Specialization

– The degree to which tasks in the organization are divided into separate jobs with each step completed by a different person.

– Overspecialization can result in human diseconomies from boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnover.

Basic elements: 1 Work specialization

Page 7: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

Economies of Work Economies of Work

SpecializationSpecialization

Impact fromEconomies ofSpecialization

Impact fromHuman

Diseconomies

Work SpecializationWork Specialization HighHighLowLowLo

wL

ow

Hig

hH

igh

Pro

du

ctiv

ity

Pro

du

ctiv

ity

Basic elements: Work specialization

Page 8: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

Chain of CommandChain of Command

The continuous line of authority that extends from upper levels of an

organization to the lowest levels of the organization

and clarifies who reports to who.

Basic elements: 2 Chain of command

Page 9: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

The Chain of CommandThe Chain of Command

DistrictA

DistrictA

DistrictB

DistrictB

DistrictC

DistrictC

DistrictD

DistrictD

DistrictE

DistrictE

DistrictF

DistrictF

DistrictG

DistrictG

Region1

Region1

Region2

Region2

Region3

Region3

Region4

Region4

Region5

Region5

VicePresident

VicePresident

VicePresident

VicePresident

VicePresident

VicePresident

VicePresident

VicePresident

VicePresident

VicePresident

Chief ExecutiveOfficer

Chief ExecutiveOfficer

ExecutiveVice President

ExecutiveVice President

ExecutiveVice President

ExecutiveVice President PresidentPresident

Basic elements: Chain of command

Unity of commandUnity of command : No person should report to more than one boss

Page 10: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

The Span of The Span of ControlControl

The Span of The Span of ControlControl

ContingencyContingency

VariablesVariablesContingencyContingency

VariablesVariablesLevel in theLevel in the

OrganizationOrganizationLevel in theLevel in the

OrganizationOrganization

Basic elements: 3 Span of control

Page 11: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

AuthorityAuthorityandand

ResponsibilityResponsibility

AuthorityAuthorityandand

ResponsibilityResponsibility

Responsibility refers the

obligation to perform assigned

activities

Authority refers the right

inherent in a managerial positionmanagerial position

to give orders

Basic elements: 4 Authority and responsibility

Page 12: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

ExecutiveDirector

Assistant to theExecutive Director

Unit 2Manager

Unit 1Manager

OtherHuman

ResourcesOperationsPurchasing

OtherDirectors

Director of Purchasing

Director of HumanResources

Director ofOperations

Other Operations PurchasingHuman

Resources

Line AuthorityLine Authority

Staff AuthorityStaff Authority

Basic elements: Authority and responsibility

Line Versus Staff AuthorityLine Versus Staff Authority

Page 13: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

Authority Authority Power Power

Defining …Defining …

An individual’s

capacitycapacity to

influence decisionsdecisions

An individual’s

capacitycapacity to

influence decisionsdecisions

The right inherent

in a managerialmanagerial

positionposition to give

orders

The right inherent

in a managerialmanagerial

positionposition to give

orders

Basic elements: Authority and responsibility

Page 14: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

Authority vs. PowerAuthority vs. Power

Marketing

HumanResources

ProductionAccounting

Finance

Chief ExecutiveOfficer

Research andDevelopment

FinanceAccounting

Marketing

HumanResources

Production Research andDevelopment

Function

AuthorityLevelThe Power Core

AuthorityAuthority is a right based one one’s position in an organization, while PowerPower refers to individual‘s capacity

to influence decisions.

AuthorityAuthority is a right based one one’s position in an organization, while PowerPower refers to individual‘s capacity

to influence decisions.

Authority is a two dimensional concept,

while Power is a three dimensional one.

Authority is a two dimensional concept,

while Power is a three dimensional one.

Basic elements: Authority and responsibility

Page 15: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

The Degree of The Degree of CentralizationCentralization

Higher

Em

plo

yee

Em

po

we

rme

nt

CentralizationCentralization

DecentralizationDecentralization

HigherLower

To

p M

ana

gem

en

t C

on

tro

l

Lower

Basic elements: 5 Degree of centralization

Page 16: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

Five Ways to Departmentalize

ProcessProcessProcessProcess

FunctionalFunctionalFunctionalFunctional

CustomerCustomerCustomerCustomer

ProductProductProductProduct

GeographicGeographicGeographicGeographic

Basic elements: 6 Departmentalization

Page 17: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

OrganicOrganic

Collaboration

Adaptable Duties

Few Rules

Informal Communication

Decentralized Decisions

Flatter Structures

MechanisticMechanistic

Rigid Hierarchy

Fixed Duties

Many Rules

Formal Communication

Centralized Decisions

Taller Structures

Organizational FormsOrganizational Forms

Two forms of organizational structure

Page 18: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

Organization Organization Design Design

ApplicationsApplications

Simple Structure

Bureaucracy

Matrix structures

Team based

Boundaryless

Types of design

Page 19: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

Wide SpansWide Spansof Controlof Control

FewFewDepartmentsDepartments

LittleLittleFormalizationFormalization

The Simple StructureThe Simple Structure

Types of design: 1 Simple structure (Traditional design)

CentralizedCentralizedAuthorityAuthority

Page 20: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

TheTheBureaucracyBureaucracy

DivisionalDivisional

StructureStructureFunctionalFunctional

StructureStructure

Types of design: 2 The bureaucracy (Traditional design)

Page 21: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

The Matrix StructureThe Matrix Structure

DesignEngineering

ContractEngineering

Manufacturing Purchasing AccountingHuman

Resources

DesignGroup

ContractGroup

ManufacturingGroup

HumanResources

Group

AlphaProject

OmegaProject

Repeatedas abovefor eachproject

PurchasingGroup

AccountingGroup

BetaProject

GammaProject

Types of design: 3 The matrix (Contemporary design)

Page 22: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

The Matrix StructureThe Matrix Structure

Cross-FunctionalCross-FunctionalCoordinationCoordination

ClearClearAccountabilityAccountability

Allocation Allocation of Specialistsof Specialists

Dual ChainDual Chainof Commandof Command

Types of design: The matrix (Contemporary design)

Page 23: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

The Team-BasedThe Team-BasedStructureStructure

Hold TeamsHold Teams

AccountableAccountableEmpowerEmpower

WorkersWorkers

Types of design: 4 Team based (Contemporary design)

Page 24: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

The The BoundarylessBoundarylessOrganizationOrganization

The The BoundarylessBoundarylessOrganizationOrganization

Limited ChainLimited ChainOf CommandOf CommandLimited ChainLimited ChainOf CommandOf Command

Widened SpansWidened Spans

Of ControlOf ControlWidened SpansWidened Spans

Of ControlOf Control

EmpoweredEmpowered

Employee TeamsEmployee TeamsEmpoweredEmpowered

Employee TeamsEmployee Teams

Types of design: 5 Boundaryless (Contemporary design)

Page 25: Basic Organization Designs . Where We Are Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Part.

• 6 elements of organization structure

• Authority vs. power

• 5 ways of departmentalization

• Mechanistic vs. organic organizations

• Strengths of the matrix structure

• Boundaryless organization

Chapter SummaryChapter Summary


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