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    Ob11 15st Ob11 15st Presentation Transcript

    • Chapter 15 Foundations of Organization Structure ORGANIZATIONAL BEHAVIOR S T E P H E N P. R O B B I N S E L E V E N T H E D I T I O N© 2005 Prentice Hall Inc. WWW.PRENHALL.COM/ROBBINS PowerPoint PresentationAll rights reserved. by Charlie Cook
    • What Is Organizational Structure?What Is Organizational Structure? Organizational Structure How job tasks are formally divided, grouped, and Key Elements: Key Elements: coordinated. • • Work specialization Work specialization • • Departmentalization Departmentalization • • Chain of command Chain of command • • Span of control Span of control • • Centralization and Centralization and decentralization decentralization • • Formalization Formalization© 2005 Prentice Hall Inc.All rights reserved. 15–2
    • What Is Organizational Structure? (cont’d)What Is Organizational Structure? (cont’d) Work Specialization The degree to which tasks in the organization are subdivided into separate jobs. Division of labor: Division of labor: • • Makes efficient use of employee skills Makes efficient use of employee skills • • Increases employee skills through repetition Increases employee skills through repetition • • Less between-job downtime increases productivity Less between-job downtime increases productivity • • Specialized training is more efficient. Specialized training is more efficient. • • Allows use of specialized equipment. Allows use of specialized equipment.© 2005 Prentice Hall Inc.All rights reserved. 15–3
    • What Is Organizational Structure? (cont’d)What Is Organizational Structure? (cont’d) Departmentalization The basis by which jobs are grouped together. Grouping Activities By: Grouping Activities By: •• Function Function •• Product Product •• Geography Geography •• Process Process •• Customer Customer© 2005 Prentice Hall Inc.All rights reserved. 15–4
    • What Is Organizational Structure? (cont’d)What Is Organizational Structure? (cont’d) Authority The rights inherent in a managerial position to give orders and to expect the orders to be obeyed. Chain of Command The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. Unity of Command A subordinate should have only one superior to whom© 2005 she is directly responsible. he or Prentice Hall Inc.All rights reserved. 15–5
    • What Is Organizational Structure? (cont’d)What Is Organizational Structure? (cont’d) Span of Control The number of subordinates a manager can efficiently and effectively direct. Concept: Concept: Wider spans of management increase organizational Wider spans of management increase organizational efficiency. efficiency. Narrow Span Drawbacks: Narrow Span Drawbacks: • •Expense of additional layers of management. Expense of additional layers of management. • •Increased complexity of vertical communication. Increased complexity of vertical communication. • •Encouragement of overly tight supervision and Encouragement of overly tight supervision and discouragement of employee autonomy.© 2005 Prentice Hall Inc. employee autonomy. discouragement ofAll rights reserved. 15–6
    • What Is Organizational Structure? (cont’d)What Is Organizational Structure? (cont’d) Centralization The degree to which decision making is concentrated at a single point in the organization. Decentralization The degree to which decision making is spread throughout the organization. Formalization The degree to which jobs within the organization are standardized.© 2005 Prentice Hall Inc.All rights reserved. 15–7
    • Common Organization DesignsCommon Organization Designs Simple Structure A structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization.© 2005 Prentice Hall Inc.All rights reserved. 15–8
    • Common Organization Designs (cont’d)Common Organization Designs (cont’d) Bureaucracy A structure of highly operating routine tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command.© 2005 Prentice Hall Inc.All rights reserved. 15–9
    • The BureaucracyThe Bureaucracy Strengths  Weaknesses – Functional – Subunit conflicts with economies of scale organizational goals – Minimum duplication – Obsessive concern of personnel and with rules and equipment regulations – Enhanced – Lack of employee communication discretion to deal – Centralized decision with problems making© 2005 Prentice Hall Inc. 15–All rights reserved. 10
    • Common Organization Designs (cont’d)Common Organization Designs (cont’d) Matrix Structure A structure that creates dual lines of authority and combines functional and product departmentalization. Key Elements: Key Elements: + Gains the advantages of functional and product + Gains the advantages of functional and product departmentalization while avoiding their weaknesses. departmentalization while avoiding their weaknesses. + Facilitates coordination of complex and + Facilitates coordination of complex and interdependent activities. interdependent activities. – Breaks down unity-of-command concept. – Breaks down unity-of-command concept.© 2005 Prentice Hall Inc. 15–All rights reserved. 11
    • New Design OptionsNew Design Options Team Structure The use of teams as the central device to coordinate work activities. Characteristics: Characteristics: • •Breaks down departmental barriers. Breaks down departmental barriers. • •Decentralizes decision making to the team level. Decentralizes decision making to the team level. • •Requires employees to be generalists as well as Requires employees to be generalists as well as specialists. specialists. • •Creates aa“flexible bureaucracy.” Creates “flexible bureaucracy.”© 2005 Prentice Hall Inc. 15–All rights reserved. 12
    • New Design Options (cont’d)New Design Options (cont’d) Virtual Organization A small, core organization that outsources its major business functions. Highly centralized with little or no departmentalization. Concepts: Concepts: Advantage: Provides maximum flexibility while Advantage: Provides maximum flexibility while concentrating on what the organization does best. concentrating on what the organization does best. Disadvantage: Reduced control over key parts of Disadvantage: Reduced control over key parts of the business. the business.© 2005 Prentice Hall Inc. 15–All rights reserved. 13
    • New Design Options (cont’d)New Design Options (cont’d) Boundaryless Organization An organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams. T-form Concepts: T-form Concepts: Eliminate vertical (hierarchical) and horizontal Eliminate vertical (hierarchical) and horizontal (departmental) internal boundaries. (departmental) internal boundaries. Breakdown external barriers to customers and Breakdown external barriers to customers and suppliers. suppliers.© 2005 Prentice Hall Inc. 15–All rights reserved. 14
    • Why Do Structures Differ?Why Do Structures Differ? Mechanistic Model A structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization. Organic Model A structure that is flat, uses cross-hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making.© 2005 Prentice Hall Inc. 15–All rights reserved. 15
    • Why Do Structures Differ? – StrategyWhy Do Structures Differ? – Strategy Innovation Strategy A strategy that emphasizes the introduction of major new products and services. Cost-minimization Strategy A strategy that emphasizes tight cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting. Imitation Strategy A strategy that seeks to move into new products or new markets only after their viability has already© 2005 proven. Hall Inc. been Prentice 15–All rights reserved. 16
    • Why Do Structures Differ? – SizeWhy Do Structures Differ? – Size Size How the size of an organization affects its structure. As an organization grows larger, it becomes more mechanistic. Characteristics of large organizations: Characteristics of large organizations: • •More specialization More specialization • •More vertical levels More vertical levels • •More rules and regulations More rules and regulations© 2005 Prentice Hall Inc. 15–All rights reserved. 17
    • Why Do Structures Differ? – TechnologyWhy Do Structures Differ? – Technology Technology How an organization transfers its inputs into outputs. Characteristics of routineness (standardized or Characteristics of routineness (standardized or customized) in activities: customized) in activities: • •Routine technologies are associated with tall, Routine technologies are associated with tall, departmentalized structures and formalization in departmentalized structures and formalization in organizations. organizations. • •Routine technologies lead to centralization when Routine technologies lead to centralization when formalization is low. formalization is low. • •Nonroutine technologies are associated with delegated Nonroutine technologies are associated with delegated decision authority. decision authority.© 2005 Prentice Hall Inc. 15–All rights reserved. 18
    • Why Do Structures Differ? – EnvironmentWhy Do Structures Differ? – Environment Environment Institutions or forces outside the organization that potentially affect the organization’s performance. Key Dimensions- Key Dimensions- • • Capacity: the degree to which an environment can Capacity: the degree to which an environment can support growth. support growth. • • Volatility: the degree of instability in the environment. Volatility: the degree of instability in the environment. • • Complexity: the degree of heterogeneity and Complexity: the degree of heterogeneity and concentration among environmental elements. concentration among environmental elements.© 2005 Prentice Hall Inc. 15–All rights reserved. 19
    • “Bureaucracy Is Dead” “Bureaucracy Is Dead” Characteristics of  Why Bureaucracy Bureaucracies Survives – Specialization – Large size prevails. – Formalization – Environmental turbulence can be – Departmentalization largely managed. – Centralization – Standardization – Narrow spans of control achieved through hiring people who have – Adherence to a chain of undergone extensive command. educational training. – Technology maintains control.© 2005 Prentice Hall Inc. 15–All rights reserved. 20
    • Organizational Designs and EmployeeOrganizational Designs and EmployeeBehaviorBehavior Research Findings: Research Findings: • • Work specialization contributes to higher employee Work specialization contributes to higher employee productivity, but it reduces job satisfaction. productivity, but it reduces job satisfaction. • • The benefits of specialization have decreased rapidly as The benefits of specialization have decreased rapidly as employees seek more intrinsically rewarding jobs. employees seek more intrinsically rewarding jobs. • • The effect of span of control on employee performance is The effect of span of control on employee performance is contingent upon individual differences and abilities, task contingent upon individual differences and abilities, task structures, and other organizational factors. structures, and other organizational factors. • • Participative decision making in decentralized Participative decision making in decentralized organizations is positively related to job satisfaction. organizations is positively related to job satisfaction.© 2005 Prentice Hall Inc. 15–All rights reserved. 21