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Organization theory and design 03 2013


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Organization theory and design

Organization theory and design

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  • 1. 3 หลักการการออกแบบองค์กรที่มีประสิทธิภาพ organization @TC 2013
  • 2. หัวข้อบรรยาย/กรณีศึกษา 1 แนวคิดทฤษฎีองค์การ 2 โครงสร้างและการออกแบบองค์การ Focus on task performance and structure Focus on motivation Focus on adjustments to the external environment 3 หลักการการออกแบบองค์กรที่มีประสิทธิภาพ 4 Fundamentals of Organization Designพื้นฐานแนวคิดการออกแบบโครงสร้างองค์การ   C 1 : Harvard Business Case / NYPD New 5 Designing Around the Customer C 2 : Harvard Business Case /Transformation at Ernst & Young United Kingdom organization @TC 2013
  • 3. What was it all about? Get organized… & make it work: STRUCTURE To get the job done! PROCESSES organization @TC 2013
  • 4. Why does Structure Matter? •  •  •  •  Influences what employees pay attention to Affects ease of coordination Impacts the speed, cost, and quality of business activities Drives relationships and interaction organization @TC 2013
  • 5. Key Success Factors 1.  Understanding business context is imperative. organization @TC 2013
  • 6. Method Means Knowing the Context •  What is the business and the organizational mission? •  Its stage in the lifecycle? •  Its value proposition? •  Its core competencies? •  Its desired goals and strategies? •  Process strengths and weaknesses? … and only then applying design principles! organization @TC 2013
  • 7. How Good is the Fit? organization @TC 2013
  • 8. Alignment Examples Open/Flexible Technology Management System Culture Process Open/Flexible Closed Task Technical System People Formal Informal organization @TC 2013
  • 9. The Star Model Strategy People Structure Rewards Processes •  Different Strategies = Different Organizations •  Organization is More than Structure •  Alignment = Effectiveness Behavior Performance Culture © Jay R. Galbraith organization @TC 2013
  • 10. Key Success Factors 1.  2.  3.  4.  Understanding business context is imperative. Always formulate goals for the design or redesign. Designs can be prescriptive or contingent Alignment is critical. organization @TC 2013
  • 11. Organization Structure organization @TC 2013
  • 12. Organization Structure •  5 basic forms or configurations •  3 parts to management structure –  Hierarchy (no. of levels) –  Spans of control –  Centralization vs. decentralization •  Best arrangements for coordination and control organization @TC 2013
  • 13. Mintzberg’s 5 Organizational Forms 1.  2.  3.  4.  5.  Simple Structure Machine Bureaucracy Professional Bureaucracy Divisionalized Form Adhocracy organization @TC 2013
  • 14. What are Pros and Cons? •  Functional •  Product/Service •  Geographies and/or customers •  Business Process Teams •  Matrix organization @TC 2013
  • 15. Parts of Management Structure 1.  Hierarchy (No. of levels) organization @TC 2013
  • 16. Parts of Management Structure 1.  2.  Hierarchy (No. of levels) Spans of control organization @TC 2013
  • 17. Parts of Management Structure 1.  2.  3.  Hierarchy (No. of levels) Spans of control Centralization vs. Decentralization •  •  •  •  •  Cost Control Responsiveness Independence Technology Corporate Regional Field Locations organization @TC 2013
  • 18. Considerations Financial Scalability Decentralize Small economy of scale Centralize Large economy of scale Cost-Structure Charge-Back Overhead Proximity to End User Decentralize High level of knowledge Centralize Low level of knowledge Competitive Advantage Source near The market Source is internal Mission Very market- driven Slightly market- driven External organization @TC 2013
  • 19. Considerations Operational Decentralize Centralize Oversight & Control Low Importance High Importance Internal Networks Low level of coordination High Level of Coordination Speed of Business Fast Moving Slow Paced organization @TC 2013
  • 20. Considerations Strategic Centralize Decentralize Arise from Business units Maintained at the top Leadership Style Bottom-Up Top-Down Culture & Values Diverse Shared Entrepreneur-ship and Innovation Highly Important Low Importance Competencies organization @TC 2013
  • 21. Coordination organization @TC 2013
  • 22. Coordination & Control •  Supervision •  Standardization of –  Work - Skills - Outputs •  Formal & Ad Hoc Teams •  Commitment and Employee Involvement organization @TC 2013
  • 23. THE NEED FOR COORDINATION •  If departments and work groups are interdependent; the greater the need for coordination… especially if the departments are decentralized. •  Pooled interdependence –  When units operate with little interaction; their output is simply pooled at the organizational level. •  Sequential interdependence –  When the output of one unit becomes the input of another unit in sequential fashion. •  Reciprocal interdependence –  When activities flow both ways between units. ARE STRUCTURAL COORDINATING MECHANISMS NEEDED? Can we rely on the hierarchy, rules and procedures, and an occasional committee meeting to coordinate across these boundaries? organization @TC 2013
  • 24. Coordinating Mechanisms: six basic mechanisms : Mutual Adjustment – informal communication. It is a very simple form. Direct Supervision – one person coordinates by giving orders to others. Standardization of Work Processes – procedures and programming. Standardization of Outputs – not what is to be done, but of its results. Standardization of Skills and Knowledge – the worker is standardized, such as with professionalization in a school (e.g., physicians) Standardization of Norms – workers share common beliefs and can achieve coordination based on it. Organizational Work Complication Mutual Adjustment 24 Direct Supervision Standardization organization @TC 2013
  • 25. STRUCTURAL COORDINATING MECHANISMS •  The Managerial Hierarchy –  Going up the hierarchy (chain of command) to find a manager with the authority to make the decisions that affect the interdependent units. •  Rules and Procedures –  Coordinating routine activities via rules and procedures that set priorities and guidelines for actions. •  Liaison Roles –  Designating a specific manager who will facilitate the flow of information to the interdependent units by acting as a common point of contact. •  Task Forces (Temporary problem-solving groups) –  Used with multiple units when coordination is complex requiring more than one individual and the need for coordination is acute. –  Committees disbanded when the need for coordination has been met. •  Integrating Departments (Permanent structures) –  Permanent organizational units that maintain internal integration and coordination on an ongoing basis. –  May have authority and budgetary controls. organization @TC 2013
  • 27. organization @TC 2013 27
  • 28. What is it all about? to the process organization organization @TC 2013
  • 29. Organizational Design & Processes •  An organization’s structure is not an end in itself. But it sets the context for managerial action. •  Structure is just one tool that managers can employ to achieve the objectives that have been set. Source: Nohria, N. “Note on Organization Structure” Harvard Business School organization @TC 2013
  • 30. … to the process organization Moving away with the functional silos To create new organizational structures «process-complete unit» each able to perform all the cross-functional steps or tasks required to meet customers' needs. Source: Majchrzak, A. & Wang, Q. «Breaking the Functional Mind-set in Process Organizations» HBR organization @TC 2013
  • 31. … to new forms of organization The “disaggregated”… “virtual”… “networked”… : •  Creating smaller sub-units with significant decisions rights; •  Decreasing the layers of management and the extent of central staff; •  Joint-venture and strategic-alliance and outsourcing: the line of what is inside and what is outside has blurred. Source: The Economist “The new organisation: a survey of the company” organization @TC 2013
  • 32. … to new forms of organization The “disaggregated”… “virtual”… “networked”… : •  Linked closely where opportunities to create values and loosely where values lie in differentiation •  And where IT becomes an electronic glue … •  Redrawing the boundaries … Source: The Economist “The new organisation: a survey of the company” organization @TC 2013
  • 33. New Organization Model: New Management Roles •  Building from small front-line operating units; •  Cross-unit integrative process; •  Commitment to empowerment; Source: BARTLETT, C.A.; GHOSHAL S. “The Myth of the Generic Manager” organization @TC 2013
  • 34. New Organization Model: New Management Roles … in building and managing a company that stimulates people to take initiatives, to collaborate, to renew themselves and the organization… Source: GOSHAL, S., BARTLETT, C.A. “ Building Organizational Capabilities” organization @TC 2013
  • 35. New Organization Model: New Management Roles •  The Entrepreneurial Process: –  Looking for innovation & opportunities •  The Integration Process: –  Linking resources and competencies •  The Renewal process: –  Challenging its own beliefs and practices Source: GOSHAL, S., BARTLETT, C.A. “ Building Organizational Capabilities” organization @TC 2013
  • 36. New Organization Model: New Management Roles ENTREPRENEURS COACHES LEADERS Source: BARTLETT, C.A.; GHOSHAL S. “The Myth of the Generic Manager” organization @TC 2013
  • 37. New Organization Model: What does it take? •  LEADERSHIP –  … more responsibilities handed down to the workforce at large, many more people than before are having to exercise authority. •  TALENT –  … hold on knowledge workers…essentials to its operations… and who are not motivated only by money. •  CULTURE –  … the compass that steers employees in the way the organisation wants them to go, is its culture. Source: The Economist “The new organisation: a survey of the company” organization @TC 2013
  • 38. LEADERSHIP & ORGANIZATION PROCESSES & TOOLS INNOVATION EFFECTIVENESS CULTURE & VALUE PEOPLE & SKILLS EVERYTHING IS LINK TOGETHER… Source: Loewe, P. & Dominiquini, J «Overcoming the barriers to effective innovation» Strategy & Leadership organization @TC 2013
  • 39. New Organization Model: Configuring: ü Structure ü Processes ü Reward systems ü People practices & policies TO SUPPORT A NEW STRATEGY How can we get organized to deliver on the strategy? Source: Galbraith, J & al: « Designing Dynamic Organization » Chapter 1 ‘Getting started’ organization @TC 2013
  • 40. New Organization Model: To the reconfigurable organization: ü Active leadership: The organization as a source of competitive advantage ü Knowledge management: Collect and share knowledge across boundaries… IT connected ü Learning: People who have «learning aptitude» and can move around ü Flexibility: And more changes to come… tolerance for ambiguity and unpredictability TO RESPOND TO AN EVER-CHANGING ENVIRONMENT Source: Galbraith, J & al: « Designing Dynamic Organization » Chapter 1 ‘Getting started’ organization @TC 2013