Designing adaptive organization

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Unit two - organizational Design

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Designing adaptive organization

  1. 1. DesigningDesigning AdaptiveAdaptive Organization Organization Business Management Unit 2
  2. 2. Organizational Structure
  3. 3. Designing Organizational Structures 0 After reading these sections, you should be able to: 1. Describe the departmentalization approach to organizational structure 2. Explain organizational authority 3. Discuss the different methods for job design
  4. 4. Departmentalization
  5. 5. Functional Departmentalization
  6. 6. Functional Departmentalization Advantages Disadvantages  Work done by highly skilled specialists  Lowers costs through reduced duplication  Communication and coordination problems are lessened  Cross-department coordination can be difficult  May lead to slower decision making  Produces managers with narrow experiences
  7. 7. Product Departmentalization United TechnologiesUnited Technologies CarrierCarrier Hamilton Sundstrand Hamilton Sundstrand ChubbChubb OtisOtis Pratt & WhitneyPratt & Whitney UTC PowerUTC Power --Administrative services --Communication & public relations --Customer service & support --E-Business --Engineering --etc… SikorskySikorsky
  8. 8. Product Departmentalization Advantages Disadvantages  Focuses on customer needs  Products and services tailored to customer needs  Duplication of resources  Difficult to coordinate across departments  Efforts to please customers may hurt the company
  9. 9. Customer Departmentalization U.S. Businesses U.S. Businesses Local Service Local Service Supply Chain Integration Supply Chain Integration Local Service Local Service Sprint Corporation Sprint Corporation International Businesses International Businesses Long- Distance Service Long- Distance Service Logistics Network Logistics Network Long- Distance Service Long- Distance Service SolutionsSolutions Wireless Services Wireless Services Distribution Centers Distribution Centers Wireline & Wireless Services Wireline & Wireless Services Business Solutions Business Solutions Consumer Solutions Consumer Solutions Sprint North Supply Sprint North Supply Local Telecom Division Local Telecom Division (Partial Listing)
  10. 10. Customer Departmentalization Advantages Disadvantages  Focuses on customer needs  Products and services tailored to customer needs  Duplication of resources  Difficult to coordinate across departments  Efforts to please customers may hurt the company
  11. 11. Geographic DepartmentalizationCoca-ColaEnterprises TerritoriesofOperation
  12. 12. Geographic Departmentalization Advantages Disadvantages  Responsive to the demands of different market areas  Unique resources located close to the customer  Duplication of resources  Difficult to coordinate across departments
  13. 13. Matrix Departmentalization Adapted from Exhibit 9.7 CitiGroup InternationalCitiGroup International NorthNorth AmericaAmerica (excluding(excluding Mexico)Mexico) NorthNorth AmericaAmerica (excluding(excluding Mexico)Mexico) Europe,Europe, Middle East,Middle East, AfricaAfrica Europe,Europe, Middle East,Middle East, AfricaAfrica Asia PacificAsia PacificAsia PacificAsia Pacific Global Corporate & Investment Bank Global Corporate & Investment Bank Global Investment Management Global Investment Management Global Consumer Global Consumer Smith BarneySmith Barney Country Managers in Spain, UAE, Kenya, etc. Country Managers in Spain, UAE, Kenya, etc. Country Managers in China, Australia, etc. Country Managers in China, Australia, etc.
  14. 14. Matrix Departmentalization Advantages Disadvantages  Efficiently manage large, complex tasks  Pool of available resources  Requires high levels of coordination  Conflict between bosses  Requires high levels of management skills
  15. 15. Organizational Authority
  16. 16. Chain of Command 0 The vertical line of authority in an organization 0 Clarifies who reports to whom 0 Unity of command 0 Workers report to only one boss 0 Matrix organization violate this principle
  17. 17. Line versus Staff Authority 0 Line authority 0 The right to command immediate subordinates in the chain of command 0 Staff authority 0 The right to advise but not command others
  18. 18. Delegation of Authority
  19. 19. Delegation of Authority
  20. 20. How to be a More Effective Delegator 1. Trust your staff to be a good job 2. Avoid seeing perfection 3. Give effective job instructions 4. Know your true interests 5. Follow up on progress 6. Praise the efforts of your staff 7. Don’t wait to the last minute to delegate 8. Ask questions, expect answer, assist employees 9. Provide the resources you would provide if doing the assignment yourself 10. Delegate to the lowest possible level
  21. 21. Degree of Centralization 0 Centralization of authority 0 Primary authority is held by upper management 0 Decentralization 0 Significant authority is found in lower levels of the organization 0 Standardization 0 Solving problems by applying rules, procedures, and processes
  22. 22. Designing Organizational Processes 0 You should be able to: 0 Explain the methods that companies are using to redesign international organizational processes (i.e., intra-organizational processes) 0 Describe the methods that companies are using to redesign external organizational processes ( i.e., inter- organizational processes)
  23. 23. Intra-Organizational Processes ReengineeringReengineering EmpowermentEmpowerment Behavioral Informality Behavioral Informality
  24. 24. Reengineering 0 The fundamental rethinking and radical resign of business processes 0 Intended to achieve dramatic improvements in performance 0 Change the orientation from vertical to horizontal 0 Changes task interdependence
  25. 25. Reengineering and Task Interdependence
  26. 26. Empowerment Empowering Worker Permanently passing decision making authority and responsibility from managers to workers by giving them the information and resources they need to make good decisions 0 A feeling of intrinsic motivation 0 Workers perceive meaning in their work 0 Employees are capable of self-determination
  27. 27. Behavioral Informality Behavioral Informality Behavioral Formality 0Spontaneity 0Casualness 0Interpersonal familiarity 0Routine & regimen 0Specific behavior rules 0Impersonal detachment
  28. 28. Behavioral Informality 0 Popular ways to increase behavioral informality Casual Dress Open Office
  29. 29. Inter-organizational Processes Modular Organizations Modular Organizations Virtual Organizations Virtual Organizations
  30. 30. Modular Organizations
  31. 31. Modular Organizations Advantages Disadvantages Can cost less to run than traditional organization Lets organizations focus on core competencies Loss of control from outscoring May reduce their competitive advantage
  32. 32. Virtual Organizations
  33. 33. Virtual Organizations Advantages Disadvantages Let companies share cost Fast and flexible Being the best should provide best service Difficult to control the quality of partners Requires tremendous management skills
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