Module 8 Organization Structure and Design. Module 8 What is organizing as a managerial...
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Transcript of Module 8 Organization Structure and Design. Module 8 What is organizing as a managerial...
Module 8OrganizationOrganizationStructure and DesignStructure and Design
Module 8
• What is organizing as a managerial responsibility?
• What are the most common types of organization structures?
• What are the trends in organizational design?
8.1
Organizing
• Organizing is one of the management functions
• Organization charts describe the formal structures of organizations
• Organizations also operate with informal structures
• Informal structures have good points and bad points
ORGANIZING
Management Functions
• Organizing– Arranges people and resources to work
toward a goal
ORGANIZING
Organizational Charts• Structure
– system of tasks, reporting relationships, and communication that links people and positions within an organization.
• Organization Charts – describe the formal structure, how an
organization should ideally work.
ORGANIZING
Organizational Charts
What You Can Learn from an Organization Chart
ORGANIZING
Formal Structure
ORGANIZING
Formal Structure• Division of Labor
– People and groups performing different jobs.• Formal Structure
– The official structure of the organization.• Informal Structure
– The unofficial relationships that develop among an organization’s members.
ORGANIZING
Informal Structure• Informal Structure
– Unofficial but important working relationships between members.
ORGANIZING
Informal Structure• Informal Structures have good and bad
points– Social network analysis identifies
communication relationships– Good points include problem solving, support,
friendship and fill gaps in the formal structure– Bad points include rumors, inaccurate
information and resistance to change
8.2
Common Types of Structures• Functional structures group together
people using similar skills• Divisional structures group people by
products, customers or locations• Matrix structures combine the functional
and divisional structures• Team structures use many permanent and
temporary teams• Network structures extensively use
strategic alliances and outsourcing
COMMON ORGANIZATIONAL STRUCTURES
Functional Structures
• Functional Structures group people with similar skills– Departmentalization
• Grouping people and jobs into a work unit
– Functional Structure• Work units have similar skills and tasks such as
finance, marketing, production and human resources.
– Work best in smaller or stable organizations
COMMON ORGANIZATIONAL STRUCTURES
Functional StructuresPotential Advantages of Functional Structures • Economies of scale make efficient use of
human resources. • Functional experts are good at solving
technical problems. • Training within functions promotes skill
development. • Career paths are available within each
function.
COMMON ORGANIZATIONAL STRUCTURES
Functional Structures
Common functional structure
COMMON ORGANIZATIONAL STRUCTURES
Functional Structures
Functional Chimneys or Silos
• Communication and performance decrease across functions
COMMON ORGANIZATIONAL STRUCTURES
Divisional Structures
• Divisional structures group together people who work on a similar product, work in the same geographical region, or serve the same customers
COMMON ORGANIZATIONAL STRUCTURES
Divisional Structures
Common divisional structures
COMMON ORGANIZATIONAL STRUCTURES
Divisional Structures Potential Advantages of Divisional Structures • Expertise focused on special products,
customers, regions • Better coordination across functions within
divisions • Better accountability for product or service
delivery • Easier to grow or shrink in size as conditions
change
COMMON ORGANIZATIONAL STRUCTURES
Matrix Structures
Matrix Structures combine functional and divisional structures•uses permanent cross functional teams to try to gain the advantages of both the functional and divisional approaches
COMMON ORGANIZATIONAL STRUCTURES
Matrix Structures
COMMON ORGANIZATIONAL STRUCTURES
Matrix Structures Potential advantages of Matrix structures•Performance accountability rests with program, product, or project managers. •Teams enable better communication and cooperation across functions. •Teams make more decisions and solve more problems at their levels. •Top managers spend more time on strategic issues. •A cross-functional team brings together members from different functional departments.
COMMON ORGANIZATIONAL STRUCTURES
Team Structures
Team Structures•Make use of permanent and temporary cross functional teams•Improved problem solving and project management
COMMON ORGANIZATIONAL STRUCTURES
Team Structures
Team structure example
COMMON ORGANIZATIONAL STRUCTURES
Team Structures
Possible advantages of Team structures•Team assignments improve communication, cooperation, and decision-making. •Team members get to know each other as persons, not just job titles. •Team memberships boost morale, and increase enthusiasm and ask involvement.
COMMON ORGANIZATIONAL STRUCTURES
Network Structures
Network structures•Consist of a central core with networks of relationships with contractors•Contractors and network partners supply essential services
COMMON ORGANIZATIONAL STRUCTURES
Network Structures
Network structure example
COMMON ORGANIZATIONAL STRUCTURES
Network Structures
Strategic Alliances•Cooperation with other firms to pursue mutual interests
• Outsourcing alliances – purchase services for other organizations
• Supplier alliances – preferred supplier/customer relationships that promote smooth transactions
COMMON ORGANIZATIONAL STRUCTURES
Network Structures
Virtual Organizations•Network that depends on information technology to link alliances and essential services
8.3
Organizational Design Trends• Organizations are becoming flatter, with
fewer levels of management
• Organizations are increasing decentralization
• Organizations are increasing delegation and empowerment
• Organizations are becoming more horizontal and adaptive
• Organizations are offering more alternative work schedules
ORGANIZATIONAL DESIGN TRENDS
Organizational Design
Organizational Design
• Aligns structure to best accomplish mission and respond to external environment
ORGANIZATIONAL DESIGN TRENDS
Organizational Design
Span of control
• How many people report to a manager– Narrow
• manger supervises few people
– Wide• manger supervises larger number of people• flatter organizations have wide span of control
ORGANIZATIONAL DESIGN TRENDS
Organizational Design
ORGANIZATIONAL DESIGN TRENDS
Decentralized Decision-making
Centralization
• Top management keeps strong decision-making control
Decentralization
• Decision-making is distributed throughout the organization
ORGANIZATIONAL DESIGN TRENDS
Increased DelegationDelegation• Giving others the right to make decisions and
take action• Steps
1. Assign responsibility—explain task and expectations to others.
2. Grant authority—allow others to act as needed to complete task.
3. Create accountability—require others to report back, complete task.
ORGANIZATIONAL DESIGN TRENDS
Horizontal and Adaptive Organizations
Bureaucracy• Formal authority
– Rules– Order– Fairness
• Mechanistic Designs– Bureaucratic– Centralized– Vertical structure
ORGANIZATIONAL DESIGN TRENDS
Horizontal and Adaptive Organizations
• Organic Designs– Adaptable– Decentralized– Horizontal Structure
ORGANIZATIONAL DESIGN TRENDS
Horizontal and Adaptive Organizations
ORGNIZATIONAL DESIGN TRENDS
Alternative Work Schedules
Alternative schedules increase flexibility and increase satisfaction for employers and employees
•Compressed workweek
•Flextime
•Job sharing
•Telecommuting
Module 8 Case
• Nike – Spreading out to stay together