Chapter 5 Structure and Design

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Organization Structure and

Design

Chapter 5

November 28, 2010


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Announcements

1.Leadership information session

2.Schedule

Structure/Human Resources today

Human Resources on Thursday

Third short report due in one week

3.Any News?

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Structure: What is It?

1. Structure is the arrangement, ordering, and

allocation of resources (capital and labor) in

order to efficiently achieve organizationalobjectives

Organizing (Organization Design) is the process of

structuring both human and physical resources to

accomplish organizational objectives.

Organization structure defines how job tasks are

formally divided, grouped, and coordinated

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Structure: Why Care About It?

1.Structure significantly impacts the ability of

an organization to achieve its objectives

efficiently

2.Structure must be consistent with the

strategy (structure follows strategy)

3.Managements responsibility is to develop astructure that enhances the organizations

overall strategy.

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Organizational Structure and Design:

Six Key Issues

1.Work Specialization

2.Unity of Command

3.Span of Control

4.Authority and Responsibility

5.Centralization v. Decentralization

6.Departmentalization

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Work Specialization/Division of

Labor

1.Describes the degree to which activities in

the organization are subdivided into

separate jobs

2.Involves having each discrete step of a job

done by a different individual rather than

having one individual do the whole job.

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Economies and Diseconomies of

Work Specialization

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Unity of Command

1.Chain of Command

The continuous line of authority that extends

from upper organizational levels to the lowestlevels and clarifies who reports to whom.

2.Unity of Command

The management principle that no personshould report to more than one boss.

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Chain of Command

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Types of Organizational Authority

1.Line Authority

The position authority (given and defined by the

organization) that entitles a manager to directthe work of operative employees.

2.StaffAuthority

Positions that have some authority (e.g.,

organization policy enforcement) but that arecreated to support, assist, and advise the holdersof line authority.

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Line Versus StaffAuthority

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Span of Control

1.The number of subordinates a manager can

direct efficiently and effectively.

2.Decisions aboutspans of controlhave

significant impact on communication,

speed, flexibility, empowerment, the

number of organizational levels, andorganization size

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Centralization And Decentralization

1.Centralization

A function of how much decision-making

authority is pushed down to lower levels in anorganization; the more centralized anorganization, the higher the level at whichdecisions are made.

2.Decentralization The pushing down of decision-making authority

to the lowest levels of an organization.

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Types of Departmentalization

Functional Groups employees based on work performed(e.g., engineering, accounting informationsystems, human resources)

Product Groups employees based on major product areasin the corporation (e.g., womens footwear, mens

footwear, and apparel and accessories)

Customer Groups employees based on customers problemand needs (e.g., wholesale, retail, government)

Geographic Groups employees based on location served(e.g., North, South, Midwest, East)

Process Groups employees based on the basis of workor customer flow (e.g., testing, payment)

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Contingency Variables Affecting

Structure

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Organizational

Structure

Environment

Size Technology

Strategy


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Contingency Variables Affecting

Structure

1.Mechanistic Organization

The bureaucracy: a structure that is high in

specialization, formalization, and centralization

2.Organic Organization

An adhocracy: a structure that is low in

specialization, formalization, and centralization3.Structure follows the organizations chosen

strategychange strategy, change structure.

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Mechanistic Versus Organic

Organizations

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Technology and Structure

1.Unit Production

Production in terms of units or small batches

2.Mass Production

Production in terms of large batch

manufacturing

3.Process Production Production in terms of continuous processing

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Organization Design

Applications

1.Simple Structure

Is low in specialization and formalization but

high in centralization.

2.Functional Structure

Has similar and related occupational specialties

that are grouped together.3.Divisional structure

Is made up of self-contained units.

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Functional Structure

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Divisional Structure

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Other Organizational Structures

1. Matrix Structure

Is comprised of specialists from functional

departments who are assigned to work on one ormore projects led by a project manager.

2. Team-Based Structure

Consists entirely of work groups or teams.

3. Boundaryless Organization Is not defined or limited by boundaries or

categories imposed by traditional structures.

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Sample Matrix Structure

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The Learning Organization

1.An organization that has developed thecapacity to continuously adapt and change

because all members take an active role inidentifying and resolving work-related issues.

2. Characteristics:

Organization design

Information sharing Leadership

Organizational culture

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Characteristics of a Learning

Organization

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Organization Culture

1. Is a system of shared meanings within an organizationthat determine how employees act.

2. Has shared values in its cultural elements

Stories, rituals, material symbols, and language unique to theorganization

3. Results from the interaction between The founders biases and assumptions

What the first employees learn subsequently from their own

experiences.4. Influences structure

Strong culture substitutes for rules and regulations.

Cultural norms and values can serve as social control

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Ten Characteristics of Organization

Culture

1. Member identity

2. Group emphasis

3. People focus

4. Unit integration

5. Control

6. Risk tolerance

7. Reward criteria

8. Conflict tolerance

9. Meansend

orientation

10.Open-systems focus

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Chapter 5 Structure and Design

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Transcript of Chapter 5 Structure and Design