Module 8 #Organizational structures

Organizational Behavior

Module 8: Organizational Structures

Vinay Kumar, Ph.D

Vidisha Garg, MBA

ICBM-SBE, 2014

Why structure?

Vinay Kumar; Vidisha Garg 2

First, there is ‘me’ Then, there is ‘what I hear’ Later, there is ‘what someone clarifies’ My question: Where was I ‘best’ informed?

Organizational structure

• Defines how

– Job tasks are formally

• divided

• grouped

• coordinated

• Organizations use structures to manage areas such as

– Work specialization

– Departmentalization

– Chain of command

– Span of control

– Centralization / Decentralization

– Formalization


Key questions and areas to look for answers


Source: Robbins, S. P., & Judge, T. A. (2013). Organizational Behavior,15th Edition. Pearson: New Jersey.

Division

Grouping

Coordination

Work specialization

• Q1: Why does productivity seem to

improve with lack of specialization?



• Q2: Why does productivity seem to

decline with increasing specialization?

Departmentalization

• Bases (indicative list, not exhaustive)

– Product

– Geography

– Nature of tasks

– Similarity in tasks

– Nature of stakeholders

– Frequency of interaction


Puzzle: Imagine that a graduate in finance finds place in the accounting department. And he is placed in the function of managing payrolls. How do you think this aspiring graduate can plan his career further?

Elements of coordination

• Chain of command

– Unity: One boss for any employee

– Authority: Inherent capacity of a position to give orders and get compliance

• Span of control (number of subordinates for a given superior)

– Determines the number of levels in the organization (Depth of hierarchy)

• Centralization/Decentralization

– Degree to which resources are concentrated or spread

– Resources could include: information, decision-making authority, operations etc

• Formalization

– Degree to which jobs and work flows are standardized


Mintzberg’s coordination mechanisms

• Mutual adjustment

• Direct supervision

• Standardization of

– skills and knowledge

– work processes

– output

– norms


Source: http://goodschool.cphwest.dk/Chapter%201%20to%205/Chapter%202_clip_image004.gif

http://goodschool.cphwest.dk/Chapter 1 to 5/Chapter 2_clip_image004.gif




Common organizational designs

• Simple

• Bureaucratic

• Matrix

• Virtual

• Boundary-less


Characteristics (indicative, not necessarily valid)

• Work Specialization : Low

• Departmentalization : Not Specific

• Chain of command : Strong

• Depth of hierarchy : Flat

• Centralization : High

• Formalization : Low

• Example : Local retail store


• Simple

• Bureaucratic

• Matrix

• Virtual

• Boundary-less



• Work Specialization : High

• Departmentalization : Very Specific

• Chain of command : Strong

• Depth of hierarchy : Deep

• Centralization : Low

• Formalization : High

• Example : Govt. Tax Office

Go to this link: http://www.incometaxindia.gov.in/ccit/rtipage.asp And read: Information under section 4(1)(b) of the RTI Act

http://www.incometaxindia.gov.in/ccit/rtipage.asp


• Simple

• Bureaucratic

• Matrix

• Virtual

• Boundary-less



• Work Specialization : Moderate

• Departmentalization : Crossed

• Chain of command : Split/Shared

• Depth of Hierarchy : Moderate

• Centralization : Moderate

• Formalization : Moderate

• Example : Your college


• Simple

• Bureaucratic

• Matrix

• Virtual

• Boundary-less



• Work Specialization : High

• Departmentalization : NA

• Chain of command : NA

• Depth of hierarchy : NA



• Visit : sourceforge.net

Caution: Virtual organizations can sometimes be overrated. Whether they are effective or not really depends on at least two things: (i) role clarity among individuals, and (ii) the need for coordination.


• Simple

• Bureaucratic

• Matrix

• Virtual

• Boundary-less



• Work Specialization : Rounded

• Departmentalization : NA

• Chain of command : NA

• Depth of hierarchy : NA



• Example : McKinsey

Caution: The premise of boundary-less organizations is that empowered employees behave responsibly. And that requires, if not organizational structures, reciprocation from employees to serve their firm.

What affects organizational design choice?

• Some common factors include

– Size

– Technology

– Environment

• Critical factor that drives the choice, however is ‘strategy’



Mechanistic vs. Organic Models



The Trade-off

Consistency/Constraint Vs.

Creativity/Freedom

How would you decide?

Simplified model of the structure dynamic



For discussion

• What according to you is the best way of coordinating: mutual adjustments

or standardization? What are your reasons for the selection you make?

• Do you think structure can communicate with people? How does it

accomplish such communication?

• To what extent do you think individual performance is a function of

organizational structure?

• Would organizations with similar businesses and similar goals in two

countries be structured alike? Why or why not?

• What do you understand by ‘restructuring’ an organization? And how do you

think that is done?


End of module 8.

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Module 8 #Organizational structures

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