Management 11e John Schermerhorn Chapter 10 Organization Structures and Design.
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Transcript of Management 11e John Schermerhorn Chapter 10 Organization Structures and Design.
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Management 11e John Schermerhorn
Chapter 10Chapter 10
Organization StructuresOrganization Structuresand Designand Design
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Planning Ahead — Chapter 10 Study Questions
1. What is organizing as a management function?
2. What are the traditional organization structures?
3. What are the types of horizontal organization structures?
4. How are organizational designs changing the workplace?
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Study Question 1: What is organizing as a management function?
Organizing as a management function Organizing
Arranges people and resources to work together to accomplish a goal
Organization structure The system of tasks, workflows, reporting
relationships, and communication channels that link together diverse individuals and groups
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Figure 10.1 Organizing viewed in relationship with the other management functions
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Study Question 1: What is organizing as a management function?
Formal structures The structure of the organization in its official
state
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Study Question 1: What is organizing as a management function?
An organization chart is a diagram describing reporting relationships and the formal arrangement of work positions within an organization. It includes:
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Informal structures The set of unofficial relationships between organization
members Social network analysis
Identifies informal structures and social relationships in the organization
Potential advantages of informal structures: Helping people accomplish their work Overcoming limits of formal structure Gaining access to interpersonal networks Informal learning
Study Question 1: What is organizing as a management function?
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Study Question 1: What is organizing as a management function?
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Study Question 2: What are the traditional types of organization structures?
Traditional organization structures Departmentalization
Groups people with and jobs into work units or formal teams
These formal teams are linked to create three major types of traditional organizational structures
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Study Question 2: What are the traditional types of organization structures?
Functional structures People with similar skills and performing
similar tasks are grouped together into formal work units
Members work in their functional areas of expertise
Are not limited to businesses Work well for small organizations producing
few products or services
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Figure 10.2 Functional structures in a business, branch bank, and community hospital
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Study Question 2: What are the traditional types of organization structures?
Potential advantages of functional structures: Economies of scale Task assignments consistent with expertise
and training High-quality technical problem solving In-depth training and skill development Clear career paths within functions
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Study Question 2: What are the traditional types of organization structures?
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Study Question 2: What are the traditional types of organization structures?
Divisional structures Group together people who work on the
same product or process, serve similar customers, and/or are located in the same area or geographical region
Common in complex organizations Avoid problems associated with functional
structures
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Figure 10.3 Divisional structures based on product, geography, customer, and process
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Study Question 2: What are the traditional types of organization structures?
Types of divisional structures and how they group job and activities: Product structures
focus on a single product or service
Geographical structures focus on the same location or geographical region
Customer structures focus on the same customers or clients
Process structures focus on the same processes
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Study Question 2: What are the traditional types of organization structures?
Potential advantages of divisional structures: More flexibility in responding to
environmental changes Improved coordination Clear points of responsibility Expertise focused on specific customers,
products, and regions Greater ease in restructuring
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Study Question 2: What are the traditional types of organization structures?
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Study Question 2: What are the traditional types of organization structures?
Matrix structure Combines functional and divisional structures
to gain advantages and minimize disadvantages of each
Used in:
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Figure 10.4 Matrix structure in a small multi-project business firm
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Study Question 2: What are the traditional types of organization structures?
Potential advantages of matrix structures: Better cooperation across functions Improved decision making Increased flexibility in restructuring Better customer service Better performance accountability Improved strategic management
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Study Question 2: What are the traditional types of organization structures?
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Study Question 3: What are the types of horizontal organization structures?
Team structures Extensively use permanent and temporary
teams to solve problems, complete special projects, and accomplish day-to-day tasks
Often use cross-functional teams composed of members from different functional departments
Project teams are convened for a specific task or project and disbanded once completed
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Figure 10.5 How a team structure uses cross-functional teams for improved lateral relations
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Study Question 3: What are the types of horizontal organization structures?
Potential advantages of team structures: Eliminates difficulties with communication and
decision making Eliminates barriers between operating departments Improved morale Greater sense of involvement and identification Increased enthusiasm for work Improved quality and speed of decision making
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Study Question 3: What are the types of horizontal organization structures?
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Study Question 3: What are the types of horizontal organization structures?
Network structures Uses information technologies to link with
networks of outside suppliers and service contractors
Own only core components and use strategic alliances or outsourcing to provide other components
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Figure 10.6 A network structure for a Web-based retail business
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Study Question 3: What are the types of horizontal organization structures?
Potential advantages of network structures: Firms can operate with fewer full-time
employees and less complex internal systems
Reduced overhead costs and increased operating efficiency
Permits operations across great distances
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Study Question 3: What are the types of horizontal organization structures?
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Study Question 3: What are the types of horizontal organization structures?
Boundaryless organizations Eliminate internal boundaries among subsystems and external
boundaries with the external environment A combination of team and network structures, with the addition
of “temporariness” Key requirements:
Absence of hierarchy Empowerment of team members Technology utilization Acceptance of impermanence
Encourage creativity, quality, timeliness, flexibility, andefficiency Knowledge sharing is both a goal and essential component
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Study Question 3: What are the types of horizontal organization structures?
Virtual organization A special form of boundaryless organization Operates in a shifting network of external
alliances that are engaged as needed, using IT and the Internet
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Figure 10.7 The boundaryless organization eliminates internal and external barriers
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Study Question 4: How are organizational designs changing the workplace?
Organizational design Process of creating structures that
accomplish mission and objectives A problem-solving activity that should be
approached from a contingency perspective
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Study Question 4: How are organizational designs changing the workplace?
Bureaucracy A form of organization based on logic, order,
and the legitimate use of formal authority Bureaucratic designs feature …
Clear-cut division of labor Strict hierarchy of authority Formal rules and procedures Promotion based on competency
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Study Question 4: How are organizational designs changing the workplace?
Contingency perspective on bureaucracy asks the questions: When is a bureaucratic form a good choice for an
organization? What alternatives exist when it is not a good choice?
Environment determines the most appropriate design Mechanistic designs work in a stable environment Organic designs work in a rapidly changing and
uncertain environment Adaptive organizations operate with a minimum of
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Study Question 4: How are organizational designs changing the workplace?
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Figure 9.8 A continuum of organizational design alternatives: from bureaucratic to adaptive organizations
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Study Question 4: How are organizational designs changing the workplace?
Contemporary organizing trends include: Fewer levels of management
Shorter chains of command Less unity of command
Wider spans of control More delegation and empowerment Decentralization with centralization Reduced use of staff
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Study Question 4: How are organizational designs changing the workplace?
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Study Question 4: How are organizational designs changing the workplace?
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Study Question 4: How are organizational designs changing the workplace?
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Study Question 4: How are organizational designs changing the workplace?
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Study Question 4: How are organizational designs changing the workplace?
More delegation and empowerment Delegation is the process distributing and
entrusting work to other persons The manager assigns responsibility, grants
authority to act, and creates accountability Authority should be commensurate with
responsibility
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Study Question 4: How are organizational designs changing the workplace?
Three Steps in Delegation:
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Study Question 4: How are organizational designs changing the workplace?
Decentralization with centralization
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Study Question 4: How are organizational designs changing the workplace?
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Study Question 4: How are organizational designs changing the workplace?
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Chapter 10 Case
Nike: Spreading out to stay together