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  1. 1. Organizational DesignMultiMedia by 2002 South-
  2. 2. Organizations Common Elements Operate with authority Have departments Use line and staff positionsMultiMedia by 2002 South-
  3. 3. Organizational Design Objectives Integrate Respond to new change elements Coordinate Encourage the flexibility componentsMultiMedia by 2002 South-
  4. 4. Mechanistic Structure is Characterized By  Rigidly defined tasks  Formalization  Rules and regulations  Centralized decision making  Emphasis on control from top levels down  Vertical communicationMultiMedia by 2002 South-
  5. 5. Mechanistic versus Organic StructuresMultiMedia by 2002 South-
  6. 6. Organic Structure1. Free flowing.2. Has few rules and regulations.3. Decentralizes decision making.4. Referred to as the horizontal structure.5. Allows changes to be made rapidly as the needs require.6. Frequently redefines tasks to fit employee and environmental needs. MultiMedia by 2002 South-
  7. 7. Contingency FactorsMultiMedia by 2002 South-
  8. 8. Influence of Strategy on StructureMultiMedia by 2002 South-
  9. 9. Uncertain Environment Calls For— Organic structure that emphasizes: • flexibility • coordination • less formal procedures MultiMedia by 2002 South-
  10. 10. Small Organizations Little division Few rules and of labor regulationsInformal performance Informal budget appraisals development procedures MultiMedia by 2002 South-
  11. 11. Large Organizations Greater division Greater division Mechanistic Mechanistic of labor of labor More rules and More rules and More elaborate More elaborate regulations regulations internal systems internal systemsMultiMedia by 2002 South-
  12. 12. Organizational Life Cycle and Structural Characteristics MultiMedia by 2002 South-
  13. 13. Producing Goods in Small Quantities Small batch technology Unit production technologyMultiMedia by 2002 South-
  14. 14. Large Volume of Standardized Products Technology  Large batch technology  Mass production technologyMultiMedia by 2002 South-
  15. 15. MultiMedia by 2002 South-
  16. 16. Functional Structure• Groups positions into departments based on similar skills, expertise, and resources. Advantages – Economics of scale – Minimizes duplication of personnel and equipment – Simplifies training Disadvantages – Employees may have little understanding of and concern for the specialty areas outside their own functional area – Barriers in communication, cooperation, and coordination – Functional structure response time to changes may be slow MultiMedia by 2002 South-
  17. 17. Divisional Structure Groups departments based on organizational outputs. Self-contained strategic business units. Creates a set of autonomous mini-companies. MultiMedia by 2002 South-
  18. 18. Divisional StructureAdvantages– Focuses the attention of employees and managers on results for the product, the customer, or the geographical area.– Flexible and responsive to change.– Singleness of purpose.– Responsibility and accountability for performance are easier to target. MultiMedia by 2002 South-
  19. 19. Divisional Structure Disadvantages – Duplication of activities and resources. – Loses efficiency and economies of scale. – Lack of technical specialization, expertise, and training can result. – Coordination may suffer.MultiMedia by 2002 South-
  20. 20. Matrix StructureCombines the advantages of functional specialization with the focus and accountability of the divisional structure. Employs dual lines of authority.MultiMedia by 2002 South-
  21. 21. Matrix Design Used in One of Two Situations First, it is used when a firm offers a diverse set of products, has a complex environment, and requires functional expertise. Second, it is used when managers want to maximize economies of scale and shared resources. MultiMedia by 2002 South-
  22. 22. Team StructureAdvantages—Breaks down barriers across departments.—Speeds up decision making and response time.—Employees are strongly motivated.—Improvement over the matrix structure.Disadvantages— Depends on employees who learn and train for success.— A large amount of time may be required for team meetings. MultiMedia by 2002 South-
  23. 23. Network Structure Known as “Dynamic Network”• A small central organization relies on other organizations to perform critical functions on a contract basis. Advantages – Provides flexibility. – Overhead remains low. Disadvantages – Lack of control. MultiMedia by 2002 South-