Organizational designs and employee behavior ob presentation final 07 32


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Organizational Structure

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Organizational designs and employee behavior ob presentation final 07 32

  1. 2. <ul><li>UNIT -2 </li></ul>
  2. 3. <ul><li>What is Organization Structure? </li></ul><ul><li>Common Organization Designs </li></ul><ul><li>New Design Options </li></ul><ul><li>Why Do Structures Differ? </li></ul><ul><li>Organizational Designs and Employee Behavior </li></ul><ul><li>Organization Structure: Its Determinants </li></ul><ul><li>and Outcomes </li></ul>
  3. 4. Six Elements of Organizational Structure
  4. 5. <ul><li>1 . Work Specialization </li></ul><ul><li>The degree to which tasks in the organizations are subdivided into separate jobs. </li></ul><ul><li>Also referred to Division of Labor. </li></ul><ul><li>Eg. In Ford Company, Every worker was assigned a specific, repetitive task. </li></ul>
  5. 7. <ul><li>Unbroken Line of Authority </li></ul><ul><li>Two concepts: </li></ul><ul><li>Authority and Unity of command </li></ul><ul><li>Less relevance today </li></ul>
  6. 8. <ul><li>The number of subordinates a manger can efficiently and effectively direct. </li></ul><ul><li>Wider span of control </li></ul><ul><li>to reduce </li></ul><ul><li>cut overhead, </li></ul><ul><li>speed up decision making, </li></ul><ul><li>increase flexibility, </li></ul><ul><li>get closer to customers </li></ul><ul><li>empower employees. </li></ul>
  7. 9. <ul><li>Centralization is the degree to which decision making is concentrated at a single point in the organization. </li></ul><ul><li>In Decentralization, the lower level personnel provide input the discretion to make decisions </li></ul><ul><li>Recent trend is towards Decentralization to take decisions more easily </li></ul>
  8. 10. <ul><li>Refers to the degree to which jobs within the organization are standardized. </li></ul><ul><li>Formalization is high, minimum amount of discretion about job uniform output. </li></ul><ul><li>Low formalization non programmed and employees have a great deal of freedom to exercise discretion </li></ul>
  9. 11. Why Do Structures Differ?
  10. 12. <ul><li>Mechanistic Model: </li></ul><ul><li>A structure characterized by: </li></ul><ul><li>Extensive departmentalization </li></ul><ul><li>High formalization </li></ul><ul><li>Centralization </li></ul><ul><li>Restricted Information Flow </li></ul>
  11. 13. <ul><li>Organic Model: </li></ul><ul><li>A structure characterized by: </li></ul><ul><li>Flat </li></ul><ul><li>cross-functional teams </li></ul><ul><li>has low formalization </li></ul><ul><li>Relies on participative </li></ul><ul><li>decision making </li></ul><ul><li>Free Flow of information </li></ul>
  12. 15. <ul><li>Strategy </li></ul><ul><li>Organization Size </li></ul><ul><li>Technology </li></ul><ul><li>Environment </li></ul>
  13. 16. <ul><li>Organization goals are achieved by Strategies </li></ul><ul><li>Strategy and Structure should be closely linked </li></ul><ul><li>Structure must follow Strategy </li></ul><ul><li>Change in Organization’s Strategy should be reflected </li></ul><ul><li>changes in it’s Structure to support this change </li></ul>
  14. 17. 1- Innovation Strategy: A strategy that emphasizes the introduction of major new products and services. e.g. Apple 3- Imitation Strategy: A strategy that seeks to move into new products or new markets only after their viability has already been proven. e.g. HP 2- Cost-minimization Strategy: A strategy that emphasizes tight cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting. e.g. Wal-Mart
  15. 18. Strategy Structural Option Innovation Organic: A loose structure; low specialization, low formalization, decentralized Cost minimization Mechanistic: Tight control; extensive work specialization, high formalization, high centralization Imitation Mechanistic and organic : Mix of loose with tight properties; tight controls over current activities and looser controls for new undertakings
  16. 19. <ul><li>Organization’s Size Significantly affects it’s structure </li></ul><ul><li>Organizations with 2000 and more employees are </li></ul><ul><li>Called Large Organizations </li></ul><ul><li>Increasing Employees does not affect the larger organizations </li></ul><ul><li>But Increasing Employees can affect the shifting of </li></ul><ul><li>structure for Small Organizations </li></ul>
  17. 20. <ul><li>“ As an organization grows larger, it becomes more mechanistic.” </li></ul><ul><li>Characteristics of large organizations: </li></ul><ul><li>More specialization </li></ul><ul><li>More Departmentalization </li></ul><ul><li>More hierarchal structure </li></ul><ul><li>More rules and regulations </li></ul><ul><li>than Smaller organization </li></ul>
  18. 21. <ul><li>Technology: </li></ul><ul><li>“ How an organization transfers its inputs into outputs.” </li></ul><ul><li>Every Organization has at-least one technology for </li></ul><ul><li>converting Financial, Human and physical resources </li></ul><ul><li>into products and services. </li></ul><ul><li>Examples: </li></ul><ul><li>Ford Motors uses “Assembly-line process” for it’s products </li></ul><ul><li>Universities normally uses “Formal lecture method” </li></ul>
  19. 22. <ul><li>Routine technologies are associated with long, departmentalized structures and formalization in organizations. </li></ul><ul><li>Routine technologies leads to centralization when formalization is low. </li></ul><ul><li>Non-routine technologies are associated with </li></ul><ul><li>delegated decision authority. </li></ul>
  20. 24. <ul><li>Research Findings: </li></ul><ul><li>Work specialization contributes to higher employee productivity, but it reduces job satisfaction. </li></ul><ul><li>The benefits of specialization have decreased rapidly </li></ul><ul><li>as employees seek more intrinsically rewarding jobs. </li></ul><ul><li>The effect of span of control on employee performance </li></ul><ul><li>is contingent upon individual differences and abilities, </li></ul><ul><li>task structures, and other organizational factors. </li></ul><ul><li>Participative decision making in decentralized </li></ul><ul><li>Organizations is positively related to job satisfaction. </li></ul>