Chapter 10 designing adaptive organizations(1)

10,052 views

Published on

Published in: Business, Education
2 Comments
8 Likes
Statistics
Notes
No Downloads
Views
Total views
10,052
On SlideShare
0
From Embeds
0
Number of Embeds
11
Actions
Shares
0
Downloads
473
Comments
2
Likes
8
Embeds 0
No embeds

No notes for slide
  • 32
  • 33
  • 35
  • 36
  • 38
  • 39
  • Chapter 10 designing adaptive organizations(1)

    1. 1. Designing Adaptive Organizations Chapter 10
    2. 2. Organizing  Organization is the deployment of resources to achieve strategic goals.  It is reflected in – Division of labor into specific departments & jobs – Formal lines of authority – Mechanisms for coordinating diverse organizational tasks Manager’s Challenge: Nissan Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.2
    3. 3. Topics Designing Adaptive Chapter 10 Organizations  Organizing Principles and Concepts  Organizing the Vertical Structure  Using Mechanisms for Horizontal Coordination  Tailoring Various Elements of Structural Design to Organizational Situations Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.3
    4. 4. Organization Structure Defines how tasks are divided, resources are deployed, and departments are coordinated ● Set of formal tasks assigned ● Formal reporting relationships ● The design of systems to ensure effective coordination of employees across department Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.4
    5. 5. The Organization Chart • Visual representation of an organization’s structure “The Home Depot is the worlds largest home improvement retailer currently operating 1,363 • Important Features of Vertical Structure: stores. 1. Work Specialization 2. Chain of Command 3. Authority, Responsibility and Delegation 4. Span of Management or Span of Control 5. Centralization/Decentralization Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.5
    6. 6. Work Specialization Division of Labor concept  Tasks are subdivided into individual jobs  Employees perform only the tasks relevant to their specialized function  Jobs tend to be small, but they can be performed efficiently Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.6
    7. 7. Chain of Command  Unbroken line of authority that links all  Unbroken line of authority that links all persons in an organization persons in an organization  Shows who reports to whom  Shows who reports to whom  Associated with two underlying principles  Associated with two underlying principles  Unity of Command  Unity of Command  Scalar Principle  Scalar Principle Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.7
    8. 8. Authority Formal and legitimate right of a manager to Formal and legitimate right of a manager to make decisions and issue orders make decisions and issue orders Allocate resources to achieve organizationally Allocate resources to achieve organizationally desired outcomes desired outcomes Authority is distinguished by three characteristics Authority is distinguished by three characteristics  Authority is vested in organizational positions, not  Authority is vested in organizational positions, not people people  Authority is accepted by subordinates  Authority is accepted by subordinates  Authority flows down the vertical hierarchy  Authority flows down the vertical hierarchy Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.8
    9. 9. Responsibility Flip Side of the Authority coin  The duty to perform the task or activity an employee has been assigned  Managers are assigned authority commensurate with responsibility Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.9
    10. 10. Accountability ● Mechanism through which authority and responsibility are brought into alignment ● People are subject to reporting and justifying task outcomes to those above them in the chain of command ● Can be built into the organization structure Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.10
    11. 11. Delegation ●Process managers use to transfer authority and responsibility ●Organizations encourage managers to delegate authority to lowest possible level Ethical Dilemma: A Matter of Delegation Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.11
    12. 12. Delegation Give Maintain Evaluate and reward thorough feedback performance instructions Techniques for Delegation Ensure that Delegate the authority equals Select the right whole task responsibility person Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.12
    13. 13. Line and Staff Authority  Line Authority = individuals in management positions have the formal power to direct and control immediate subordinates  Staff Authority = granted to staff specialists in their area of expertise Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.13
    14. 14. Span of Management (also called Span of Control)  Number of employees who report to a supervisor – Traditional view = seven subordinates per manager – Lean organizations today = 30+ subordinates  Supervisor Involvement – must be closely involved with subordinates, the span should be small – need little involvement with subordinates, it can be large Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.14
    15. 15. Factors Associated With Less Supervisor Involvement  Work is stable and routine  Work is stable and routine  Subordinates perform similar  Subordinates perform similarwork tasks work tasks  Subordinates are concentrated in a single location  Subordinates are concentrated in a single location  Subordinates are highly trained  Subordinates are highly trained  Rules and procedure defining task activities are available  Rules and procedure defining task activities are available  Support systems and personnel are available for the  Support systems and personnel are available for the manager manager  Little time is required in nonsupervisory activities  Little time is required in nonsupervisory activities  Managers’ preferences and styles favor a large span  Managers’ preferences and styles favor a large span Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.15
    16. 16. Tall versus Flat Structure  Span of Control used in an organization determines whether the structure is tall or flat  Tall structure has a narrow span and more hierarchical levels  Flat structure has a wide span, is horizontally dispersed and fewer hierarchical levels  The trend has been toward wider spans of control Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.16
    17. 17. Centralization versus Decentralization  Centralization – the location of decision authority near top organization levels  Decentralization – the location of decision authority near lower organization levels Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.17
    18. 18. Centralization versus Decentralization  Greater change and uncertainty in the environment are usually associated with decentralization  The amount of centralization or decentralization should fit the firm’s strategy  In times of crisis or risk of company failure, authority may be centralized at the top Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.18
    19. 19. Departmentalization  The basis on which individuals are grouped into departments and departments into the total organization • Five Approaches to Structural Design 1. Vertical Functional Structure 2. Divisional Structure 3. Matrix Structure 4. Team-Based Structure 5. Virtual Network Structure Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.19
    20. 20. Vertical Functional OrganizationalStructure CEO Finance Production MarketingCopyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.
    21. 21. Vertical Functional Structure  Grouping of positions into departments based on similar skills, expertise, and resource use ● Information flows up and down ● Chain of command converges at the top ● Managers and employees are compatible because of similar training and expertise ● Rules and procedures governing duties and responsibilities Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.21
    22. 22. Divisional Structure CEO Consumer Lighting Medical Products Products SystemsCopyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.
    23. 23. Divisional Structure  Departments are grouped based on similar organizational outputs ● Each division is autonomous of the others in a huge corporation or organization Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.23
    24. 24. Divisional Structure Advantages  Efficient use of resources  Skill specialization development  Top management control  Excellent coordination  Quality technical problem solving Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.24
    25. 25. Divisional Structure Disadvantages  Poor communications  Slow response to external changes  Decisions concentrated at top  Pin pointing responsibility is difficult  Limited view of organizational goals by employees Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.25
    26. 26. Matrix Structure (Project- based)Employees ( ) are temporrily assigned to a specificproject team and have a permanent functional unitCEO Engineering Marketing Design Project A Manager Project B Manager Project C ManagerCopyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.
    27. 27. General Motors’ IT Matrix StructureCopyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.
    28. 28. Matrix Structure  Utilizes functional and divisional chains of command simultaneously in the same part of the organization Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.28
    29. 29. Matrix Advantages  More efficient use of resources than single hierarchy  Adaptable to changing environment  Development of both general and specialists management skills  Expertise available to all divisions  Enlarged tasks for employees Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.29
    30. 30. Dual-Authority Structure in a Matrix Organization Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.30
    31. 31. Matrix Disadvantages  Dual chain of command  High conflict between two sides of matrix  Many meetings to coordinate activities  Need for human relations training  Power domination by one side of matrix Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.31
    32. 32. Team Structure Organization is made up of horizontal teams that coordinate their activities and work directly with customers to achieve the organization’s goals Cross-functional teams – a group of employees from various functional departments that meet as a team to resolve problems Permanent teams – a group of participants from several functions who are permanently assigned to solve ongoing problems of common interest Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.32
    33. 33. Team Advantages  Same advantages as functional structure  Reduced barriers among departments  Quicker response time  Better morale  Reduced administrative overhead Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.33
    34. 34. Team Disadvantages  Dual loyalties and conflict  Time and resources spent on meetings  Unplanned decentralization Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.34
    35. 35. Virtual Network Structure Product Call center development partner partner (India) (U.S.A.) Core Firm Package Accounting design partner partner (Canada) (UK) Assembly partner (Mexico)Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.
    36. 36. Virtual Network Structure  Disaggregates major functions to separate companies that are brokered by a small headquarters organization OUTSOURCING Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.36
    37. 37. Virtual Network Advantages  Global competitiveness  Work force flexibility  Reduced administrative overhead Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.37
    38. 38. Virtual Network Disadvantages  No hands-on control  Loss of part of the organization severely impacts remainder of organization  Employee loyalty weakened Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.38
    39. 39. Task Forces, Teams, Project Management  Task Force = temporary team/committee designed to solve a short-term problem involving several departments  Project Manager = responsible for coordinating activities of several departments on a full-time basis for the completion of a specific project Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.39
    40. 40. Reengineering  Radical redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed  Process = organized group of related tasks and activities that work together to transform inputs into outputs and create value Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.40
    41. 41. Factors Shaping Structure Structure Follows Strategy Structure Reflects the Environment Structure Fits the Technology Service Technology – technology characterized by intangible outputs and direct contact between employees and customers Digital Technology – technology characterized by use of the internet and other digital processes to conduct or support business operations Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.41

    ×