The main contingency factors that affect structural choice are: - Strategy - As strategies move from single product to diversification, structure moves from organic to mechanistic. - Size - Larger organizations require more mechanistic structures. - Technology - More non-routine technologies favor organic structures. - Environment - Stable environments match mechanistic structures while dynamic environments fit organic structures. Compare and contrast traditional and contemporary organizational designs - Traditional designs include simple, functional, and divisional structures. Contemporary designs include team-based, matrix/project structures, and boundaryless organizations like virtual and network structures.

1. Chapter 6

2. TABLE OF CONTENTS
• Summary
• What Are The Six Key Elements In Organizational Design?
• What Contingency Variables Affect Structural Choice?
• What Are Some Common Organizational Designs?
• What Are Today's Organizational Design Challenges?

3. SUMMARY

4. SUMMARY
• Describe six key elements in organizational design. The first
element, work specialization, refers to dividing work activities into
separate job tasks. The second, departmentalization, is how jobs are
grouped together, which can be one of five types: functional,
product, customer, geographic, or process. The third— authority,
responsibility, and power—all have to do with getting work done in
an organization. Authority refers to the rights inherent in a
managerial position to give orders and expect those orders to be
obeyed. Responsibility refers to the obligation to perform when
authority has been delegated. Power is the capacity of an individual
to influence decisions and is not the same as authority. The fourth,
span of control, refers to the number of employees a manager can
efficiently and effectively manage. The fifth, centralization and
decentralization, deals with where the majority of decisions are
made—at upper organizational levels or pushed down to lower-level
managers. The sixth, formalization, describes how standardized an
organization’s jobs are and the extent to which employees’ behavior
is guided by rules and procedures.

5. SUMMARY
• Identify the contingency factors that favor the mechanistic
model or the organic model. A mechanistic organizational
design is quite bureaucratic whereas an organic organizational
design is more fluid and flexible. The strategy-determines
structure factor says that as organizational strategies move
from single product to product diversification, the structure
will move from organic to mechanistic. As an organization’s
size increases, so does the need for a more mechanistic
structure. The more non-routine the technology, the more
organic a structure should be. Finally, stable environments are
better matched with mechanistic structures, but dynamic ones
fit better with organic structures.

6. SUMMARY
• Compare and contrast traditional and contemporary
organizational designs. Traditional structural designs include
simple, functional, and divisional. A simple structure is one
with low departmentalization, wide spans of control, authority
centralized in a single person, and little formalization. A
functional structure is one that groups similar or related
occupational specialties together. A divisional structure is one
made up of separate business units or divisions.
Contemporary structural designs include team-based
structures (the entire organization is made up of work teams);
matrix and project structures (where employees work on
projects for short periods of time or continuously); and
boundaryless organizations (where the structural design is
free of imposed boundaries). A boundaryless organization can
either be a virtual or a network organization.

7. SUMMARY
• Discuss the design challenges faced by today’s organizations.
One design challenge lies in keeping employees connected,
which can be accomplished through using information
technology. Another challenge is understanding the global
differences that affect organizational structure. Although
structures and strategies of organizations worldwide are
similar, the behavior within them differs, which can influence
certain design elements. Another challenge is designing a
structure around the mind-set of being a learning
organization. Finally, managers are looking for organizational
designs with efficient and effective flexible work
arrangements. They’re using options such as telecommuting,
compressed workweeks, flextime, job sharing, and contingent
workers.

8. LEARNING OBJECTIVES
In this chapter we will address the following questions:
• Describe 6 key elements in organizational design.
• Identify the contingency factors that favor the mechanistic
model or the organic model.
• Compare and contrast traditional and contemporary
organizational designs.
• Discuss the design challenges faced by today’s organizations

9. WHAT ARE THE SIX KEY ELEMENTS IN ORGANIZATIONAL DESIGN?
Section 1

10. ORGANIZATION DESIGN
• Organization design decisions are typically made by senior managers.
• Organization design applies to any type of organization.
• Formulated by management writers such as Henri Fayol and Max Weber in
the early 1900s.
• These principles still provide valuable insights into designing effective and
efficient organizations.

11. WHAT IS WORK SPECIALIZATION?
• Work specialization is dividing
work activities into separate jobs
tasks.
• Individuals specialize in doing
part of an activity.
• Work specialization makes
efficient use of the diversity of
skills that workers hold.
• Some tasks require highly
developed skills; others lower
skill levels.
• Today's view is that
specialization is an important
organizing mechanism for
employee efficiency, but it is
important to recognize the
economies work specialization
can provide as well as its
limitations.

12. ECONOMIES AND DISECONOMIES OF WORK SPECIALIZATION
Excessive work
specialization or human
diseconomies, can lead to
boredom, fatigue, stress,
low productivity, poor
quality, increased
absenteeism, and high
turnover.

13. WHATIS DEPARTMENTALIZATION?
Departmentalization is when common work activities are grouped back
together so work gets done in a coordinated and integrated way. There
are five common forms of departmentalization

14. WHAT ARE AUTHORITY AND RESPONSIBILITY?
• The chain of command is the
continuous line of authority that
extends from upper
organizational levels to the
lowest and clarifies who reports
to whom.
• An employee who has to report
to two or more bosses might
have to cope with conflicting
demands or priorities.
• Authority refers to the rights
inherent in a managerial
position, to give orders and
expect the orders to be obeyed.
• Each management position has
specific inherent rights that
incumbents acquire from the
position’s rank or title.

15. WHAT ARE AUTHORITY AND RESPONSIBILITY?
• When managers delegate authority,
they must allocate commensurate
responsibility.
• When employees are given rights,
they assume a corresponding
obligation to perform and should be
held accountable for that
performance.
• Allocating authority without
responsibility creates opportunities
for abuse.
• No one should be held responsible
for something over which he or she
has no authority.

16. SCOPE OF AUTHORITY
• Line authority entitles a manager
to direct the work of an
employee. It is the employer-
employee authority relationship
that extends from top to bottom.
• A line manager has the right to
direct the work of employees
and make certain decisions
without consulting anyone.
• Sometimes the term “line” is
used to differentiate line
managers from staff managers.
• Line emphasizes managers
whose organizational function
contributes directly to the
achievement of organizational
objectives (e.g., production and
sales).
Line authority
Staff authority

17. SCOPE OF AUTHORITY
• Staff managers have staff
authority (e.g., human resources
and payroll).
• A manager’s function is
classified as line or staff based
on the organization’s objectives.
• As organizations get larger and
more complex, line managers
find that they do not have the
time, expertise, or resources to
get their jobs done effectively.
• They create staff authority
functions to support, assist,
advice, and generally reduce
some of their informational
burdens.
Line authority
Staff authority

18. WHATIS UNITY OF COMMAND?
• The chain of command is the
continuous line of authority that
extends from upper organizational
levels to the lowest and clarifies who
reports to whom.
• An employee who has to report to
two or more bosses might have to
cope with conflicting demands or
priorities.
• Therefore, the early management
writers argued that an employee
should have only one superior (Unity
of command).

19. WHATIS UNITY OF COMMAND?
• If the chain of command had to be
violated, early management writers
always explicitly designated that
there be a clear separation of
activities and a supervisor
responsible for each.
• The unity of command concept was
logical when organizations were
comparatively simple.
• There are instances today when strict
adherence to the unity of command
creates a degree of inflexibility that
hinders an organization’s
performance.

20. CONTEMPORARY AND HISTORICAL VIEW OF
AUTHORITY
• The early management writers
assumed that the rights inherent in
one’s formal position in an
organization were the sole source of
influence.
• This might have been true 30 or 60
years ago.
• It is now recognized that you do not
have to be a manager to have
power, and that power is not
perfectly correlated with one’s level
in the organization.
• Authority is but one element in the
larger concept of power.
How does the contemporary
view of authority and
responsibility differ from the
historical view?
Early management
writers one’s
formal position in
an organization
were the sole
source of influence
Authority is
concept of power
Now, you do not
have to be a
manager to have
power

21. HOW DO AUTHORITY AND POWER DIFFER?
The closer you are to
the power core, the
more influence you
have on decisions.

22. HOW DO AUTHORITY AND POWER DIFFER?
• Authority and power are
frequently confused.
• Authority is a right, the
legitimacy of which is based on
the authority figure’s position in
the organization.
• Authority goes with the job.
• Power refers to an individual’s
capacity to influence decisions.
• Authority is part of the larger
concept of power.

23. HOW DO AUTHORITY AND POWER DIFFER?
• Power is a three-dimensional
concept.
• It includes not only the functional
and hierarchical dimensions but also
centrality.
• While authority is defined by one’s
vertical position in the hierarchy,
power is made up of both one’s
vertical position and one’s distance
from the organization’s power core,
or center.

24. HOW DO AUTHORITY AND POWER DIFFER?
• The existence of a power core is the
only difference between A and B in
slide no 21 .
• The cone analogy explicitly
acknowledges two facts:
• The higher one moves in an
organization (an increase in
authority), the closer one moves to
the power core.
• It is not necessary to have authority
in order to wield power because one
can move horizontally inward toward
the power core without moving up.
Example, administrative assistants,
“powerful” as gatekeepers with little
authority

25. HOW DO AUTHORITY AND POWER DIFFER?
• Low-ranking employees with
contacts in high places might be close
to the power core.
• So, too, are employees with scarce
and important skills.
• The lowly production engineer with
twenty years of experience might be
the only one in the firm who knows
the inner workings of all the old
production machinery.
• Power can come from different
areas.

26. JOHN FRENCH AND BERTRAM RAVEN FIVE SOURCES/BASES POWER

27. WHAT IS SPAN OF CONTROL?
• Level in the organization is a
contingency variable.
• Top managers need a smaller
span than do middle managers,
and middle managers require a
smaller span than do supervisors.
• There is some change in theories
about effective spans of control.
• Many organizations are
increasing their spans of control.
• The span of control is
increasingly being determined by
contingency variables.
• The more training and
experience employees have, the
less direct supervision needed.

28. WHAT IS SPAN OF CONTROL?
• Other contingency variables
should also be considered;
similarity of employee tasks, the
task complexity, the physical
proximity of employees, the
degree of standardization, the
sophistication of the
organization’s management
information system, the strength
of the organization’s value
system, the preferred managing
style of the manager, etc.

29. HOW DO CENTRALIZATION AND DECENTRALIZATION DIFFER?
• Centralization is a function of
how much decision-making
authority is pushed down to
lower levels in the organization.
• Centralization-decentralization is
a degree phenomenon.
• Early management writers felt
that centralization in an
organization depended on the
situation. Their objective was the
optimum and efficient use of
employees.
• Traditional organizations were
structured in a pyramid, with
power and authority
concentrated near the top of the
organization. Centralized
decisions were the most
prominent.

30. HOW DO CENTRALIZATION AND DECENTRALIZATION DIFFER?
• Organizations today are more complex
and are responding to dynamic
changes.
• Many managers believe that decisions
need to be made by those closest to the
problem.
• Today, managers often choose the
amount of centralization or
decentralization that will allow them to
best implement their decisions and
achieve organizational goals.
• One of the central themes of
empowering employees was to delegate
to them the authority to make
decisions on those things that affect
their work.
• That’s the issue of decentralization at
work. It doesn’t imply that senior
management no longer makes
decisions.

31. WHAT IS FORMALIZATION?
• Formalization refers to how
standardized an organization’s jobs
are and the extent to which
employee behavior is guided by rules
and procedures.
• Early management writers expected
organizations to be fairly formalized,
as formalization went hand-in-hand
with bureaucratic-style organizations.
• Today, organizations rely less on strict
rules and standardization to guide
and regulate employee behavior.

32. WHAT ARE THE SIX KEY ELEMENTS IN ORGANIZATIONAL DESIGN?
VideoTime–“Rethinkingthestructureofcorporations”
 “the existing corporate structure is no
longer optimally adapted to the needs of
society or of corporations themselves.
He proposes some bold suggestions
about the modifications he sees as
necessary”.
 Michael Yaziji (PhD Strategy and
Management from INSEAD and a PhD
Analytic Philosophy from the University
of California) is Professor of Strategy and
Leadership at IMD. He teaches in the
areas of leadership, strategy,
stakeholder management, ethics and
change management, and governance.
 https://www.youtube.com/watch?v=8e
RwOM9iqVo

33. WHAT CONTINGENCY VARIABLES AFFECT STRUCTURAL CHOICE?
Section 2

34. WHAT CONTINGENCY VARIABLES AFFECT STRUCTURAL CHOICE?
• The most appropriate structure to use will depend on
contingency factors.
• The more popular contingency variables are strategy, size,
technology, and environment.

35. HOW IS A MECHANISTIC ORGANIZATION DIFFERENT
FROM AN ORGANIC ORGANIZATION?

36. MECHANISTIC ORGANIZATION AND ORGANIC ORGANIZATION
• The mechanistic organization (or
bureaucracy) was the natural result of
combining the six elements of
structure.
• The chain-of-command principle
ensured the existence of a formal
hierarchy of authority.
• Keeping the span of control small
created tall, impersonal structures.
• Top management increasingly
imposed rules and regulations.
• The high degree of work
specialization created simple,
routine, and standardized jobs.
• Departmentalization increased
impersonality and the need for
multiple layers of management.

37. MECHANISTIC ORGANIZATION AND ORGANIC ORGANIZATION
• The organic form is a highly adaptive
form that is a direct contrast to the
mechanistic one.
• The organic organization’s loose
structure allows it to change rapidly
as needs require.
• Employees tend to be professionals
who are technically proficient and
trained to handle diverse problems.
• They need very few formal rules and
little direct supervision.
• The organic organization is low in
centralization.
• When each of these two models is
appropriate depends on several
contingency variables.

38. HOW DOES STRATEGY AFFECT STRUCTURE?
• An organization’s structure should facilitate goal achievement.
• Strategy and structure should be closely linked.
• Certain structural designs work best with different organizational strategies.
• Accordingly, organizational structure should follow strategy. If management
makes a significant change in strategy, it needs to modify its structure as
well.

39. HOW DOES SIZE AFFECT STRUCTURE?
• Large organizations employing 2,000 or
more employees tend to have more work
specialization, horizontal and vertical
differentiation, and rules and regulations
than do small organizations.
• The relationship is not linear; the impact of
size becomes less important as an
organization expands.
• Example, once an organization has around
2,000 employees, it is already fairly
mechanistic - an additional 500 employees
will not have much effect.
• Adding 500 employees to an organization
that has only 300 members is likely to
result in a shift toward a more mechanistic
structure.

40. HOW DOES TECHNOLOGY AFFECT STRUCTURE?
• Every organization uses some form of
technology to convert its inputs into
outputs.
• To attain its objectives, the
organization uses equipment,
materials, knowledge, and
experienced individuals and puts
them together into certain types and
patterns of activities.
• For example, your tablet or
smartphone has a standardized
assembly line.
• For example, your resume is custom
design and print.

41. HOWDOESENVIRONMENTAFFECTSTRUCTURE?
• Mechanistic organizations are
most effective in stable
environments.
• Organic organizations are best
matched with dynamic and
uncertain environments.
• The environment-structure
relationship is why so many
managers have restructured their
organizations to be lean, fast,
and flexible.

42. WHAT CONTINGENCY VARIABLES AFFECT STRUCTURAL CHOICE?
ContingencyFactors,TraditionalAndContemporaryOrganizationalDesigns- Questions
• Identify the contingency factors that favor the mechanistic model or
the organic model.
• Compare and contrast traditional and contemporary organizational
designs

43. WHAT CONTINGENCY VARIABLES AFFECT STRUCTURAL CHOICE?
ContingencyFactors,TraditionalAndContemporaryOrganizationalDesigns- Answers
Identify the contingency factors that favor the mechanistic model or the
organic model.
• A mechanistic organizational design is quite bureaucratic whereas an
organic organizational design is more fluid and flexible. The strategy-
determines structure factor says that as organizational strategies move from
single product to product diversification, the structure will move from
organic to mechanistic. As an organization’s size increases, so does the need
for a more mechanistic structure. The more non-routine the technology, the
more organic a structure should be. Finally, stable environments are better
matched with mechanistic structures, but dynamic ones fit better with
organic structures.

44. WHAT CONTINGENCY VARIABLES AFFECT STRUCTURAL CHOICE?
ContingencyFactors,TraditionalAndContemporaryOrganizationalDesigns- Answers
Compare and contrast traditional and contemporary organizational designs.
• Traditional structural designs include simple, functional, and divisional. A
simple structure is one with low departmentalization, wide spans of control,
authority centralized in a single person, and little formalization. A functional
structure is one that groups similar or related occupational specialties
together. A divisional structure is one made up of separate business units or
divisions. Contemporary structural designs include team-based structures
(the entire organization is made up of work teams); matrix and project
structures (where employees work on projects for short periods of time or
continuously); and boundaryless organizations (where the structural design
is free of imposed boundaries). A boundaryless organization can either be a
virtual or a network organization.

45. WHAT ARE SOME COMMON ORGANIZATIONAL DESIGNS?
Section 3

46. TRADITIONAL ORGANIZATIONAL DESIGNS

47. WHAT IS A SIMPLE STRUCTURE?
• Most organizations start as an
entrepreneurial venture with a
simple structure.
• There is low departmentalization,
wide spans of control, authority
centralized in a single person, and
little formalization.
• The simple structure is most widely
used in smaller businesses.
• The strengths of the simple structure
are that it is fast, flexible, and
inexpensive to maintain, and
accountability is clear.

48. WHAT IS A SIMPLE STRUCTURE?
Major weaknesses.
• It is effective only in small
organizations.
• It becomes increasingly inadequate
as an organization grows; its few
policies or rules to guide operations
and its high centralization result in
information overload at the top.
• As size increases, decision making
becomes slower and can eventually
stop.
• It is risky since everything depends
on one person.

49. WHAT IS A FUCTIONAL STRUCTURE?
• Many organizations do not remain
simple structures because
structural contingency factors
dictate it.
• As the number of employees
rises, informal work rules of the
simple structure give way to more
formal rules.
• Rules and regulations are
implemented; departments are
created, and levels of
management are added to
coordinate the activities of
departmental people. At this
point, a bureaucracy is formed
• Two of the most popular
bureaucratic design options are
called the functional and
divisional structures.

50. WHAT IS A FUCTIONAL STRUCTURE?
Why do companies implement
functional structures?
• The functional structure
merely expands the
functional orientation.
• The strength of the functional
structure lies in work
specialization.
• Economies of scale,
minimizes duplication of
personnel and equipment,
makes employees
comfortable and satisfied.
• The weakness of the
functional structure is that
the organization frequently
loses sight of its best
interests in the pursuit of
functional goals.

51. WHAT IS A DIVISIONAL STRUCTURE?
• An organization design made up
of self-contained units or
divisions.
• Health care giant Johnson &
Johnson, for example, has three
divisions: pharmaceuticals,
medical devices and
diagnostics, and consumer
products.
• The chief advantage of the
divisional structure is that it
focuses on results.
• It also frees the headquarters
from concern with day-to-day
operating details.
• The major disadvantage is
duplication of activities and
resources.
• The duplication of functions
increases the organization’s
costs and reduces efficiency.

52. WHAT CONTEMPORARY ORGANIZATIONAL DESIGNS CAN MANAGERS USE?
• Team structure is when the entire
organization consists of work groups
or teams.
• Team members have the authority to
make decisions that affect them,
because there is no rigid chain of
command.
• Companies such as Amazon, Boeing,
Hewlett-Packard, Louis Vuitton,
Motorola, and Xerox extensively use
employee teams to improve
productivity.
• In these teams, employees must be
trained to work on teams, receive
cross-functional skills training, and
be compensated accordingly.

53. WHAT CONTEMPORARY ORGANIZATIONAL DESIGNS CAN MANAGERS USE?
• The matrix structure assigns specialists
from different functional departments
to work on projects led by a project
manager.
• The unique characteristic of the matrix
is that employees in this structure have
at least two bosses, a dual chain of
command: their functional
departmental manager and their
product or project managers.
• Project managers have authority over
the functional members who are part of
that manager’s team.
• Authority is shared between the two
managers. Typically, the project
manager is given authority over project
employees relative to the project’s
goals.

54. WHAT CONTEMPORARY ORGANIZATIONAL DESIGNS CAN MANAGERS USE?
• To work effectively, project, and
functional managers must
communicate and coordinate.
• The primary strength of the matrix is
that it can facilitate coordination of a
multiple set of complex and
interdependent projects while still
retaining the economies that result
from keeping functional specialists
grouped together.
• The major disadvantages of the
matrix are in the confusion it creates
and its propensity to foster power
struggles.

55. WHAT CONTEMPORARY ORGANIZATIONAL DESIGNS CAN MANAGERS USE?
• Project structure - is when
employees continuously work on
projects. Tends to be more flexible
• The major advantages of that are
that employees can be deployed
rapidly to respond to environmental
changes, no ridged hierarchical
structure to slow down decision-
making, managers serve as
facilitators, mentors, and coaches to
eliminate or minimize organizational
obstacles.
• The two major disadvantages of the
project structure are the complexity
of assigning people to projects and
the inevitable task and personality
conflicts that arise.

56. WHATISA BOUNDARYLESSORGANIZATION?
• A boundaryless organization, coined by former GE CEO, Jack Welch, is not
defined or limited by boundaries or categories imposed by traditional
structures.
• It blurs the historical boundaries surrounding an organization by increasing
its interdependence with its environment.

57. TYPES OF BOUNDARIES
There are two types of
boundaries:
• Internal—the horizontal
ones imposed by work
specialization and
departmentalization and
the vertical ones that
separate employees into
organizational levels and
hierarchies.
• External—the boundaries
that separate the
organization from its
customers, suppliers, and
other stakeholders.
Internal
• Work specialization
• Departmentalization
External
• Separate org. and
customers, suppliers
and stakeholders

58. VIRTUAL AND NETWORK ORGANIZATION
• A virtual organization consists of a
small core of full-time employees
and outside specialists temporarily
hired as needed to work on projects.
• A network organization - is one that
uses its own employees to do some
work activities and networks of
outside suppliers to provide other
needed product components or work
processes. Also called a modular
organization by manufacturing firms.
Virtual org.
Network
org.

59. WHAT ARE TODAY'S ORGANIZATIONAL DESIGN CHALLENGES?
Section 4

60. HOW DO YOU KEEP EMPLOYEES CONNECTED?
• Choosing a design that will best support and facilitate employees doing
their work efficiently and effectively, creates challenges.
• A major structural design challenge for managers is finding a way to keep
widely dispersed and mobile employees connected to the organization.

61. HOW DO GLOBAL DIFFERENCES AFFECT ORGANIZATIONAL STRUCTURE?
• Researchers have concluded that the structures and strategies of
organizations worldwide are similar, “while the behavior within them is
maintaining its cultural uniqueness.”
• When designing or changing structure, managers may need to think about
the cultural implications of certain design elements, such as rules and
bureaucratic mechanisms.

62. HOW DO YOU BUILD A LEARNING ORGANIZATION?
• Building a learning organization is a
mindset in which the learning
organization has developed the
capacity to continuously adapt and
change because all members take an
active role in identifying and resolving
work-related issues.
• Employees are practicing knowledge
management.
• Continually acquiring and sharing
new knowledge. Willing to apply that
knowledge in making decisions or
performing their work.
• According to some organizational
design theorists, an organization’s
ability to learn and to apply that
learning may be the only sustainable
source of competitive advantage.
Building a learning
organization is a
mindset
Practicing knowledge
management
Acquiring and sharing
new knowledge
Sustainable source of
competitive advantage

63. THE LEARNING ORGANIZATION

64. CHARACTERISTICSOFALEARNINGORGANIZATION
• Members share information and
collaborate on work activities
throughout the entire organization.
Minimize or eliminate existing
structural and physical boundaries.
• Employees are free to work together
and to collaborate.
• Teams tend to be an important feature
of the structural design.
• Managers serve as facilitators,
supporters, and advocates. For a
learning organization to "learn"
information is shared openly, in a timely
manner, and as accurately as possible.
Leadership creates a shared vision for
the organization’s future and keeps
organizational members working toward
that vision.
Eliminate
structural
boundaries
Employee work
together
Team as feature of
structural design
Manager serves as
facilitator,
supporter and
advocates

65. CHARACTERISTICSOFALEARNINGORGANIZATION
• Leaders should support and encourage
the collaborative environment.
• A learning organization’s culture is one
in which everyone agrees on a shared
vision and everyone recognizes the
inherent interrelationships among the
organization’s processes, activities,
functions, and external environment.
• There is a strong sense of community,
caring for each other, and trust.
• Employees feel free to openly
communicate, share, experiment, and
learn without fear of criticism or
punishment.
• A learning organization’s culture is one
in which everyone agrees on a shared
vision and everyone recognizes the
inherent interrelationships among the
organization’s processes, activities,
functions, and external environment.
Leaders support
collaboration
Shared vision and
interrelationships
Community caring
and trust
Openly
communicate
Organizational
culture is important
of a learning
organization

66. HOW CAN MANAGERS DESIGN EFFICIENT AND
EFFECTIVE FLEXIBLE WORK ARRANGEMENTS?
• As organizations adapt their
structural designs to fit a diverse
workforce, growing competition,
customer demands and new
technology, we see more of them
adopting flexible working
arrangements.
• Such arrangements not only exploit
the power of technology, but give
organizations the flexibility to deploy
employees when and where needed.
• Telecommuting is a work
arrangement in which employees
work at home and are linked to the
workplace by their computer.
Adapt the
structural designs
to fit a diverse
workforce
flexibility to
deploy employees
when & where
needed
Telecommuting is
a work
arrangement

67. HOW CAN MANAGERS DESIGN EFFICIENT AND
EFFECTIVE FLEXIBLE WORK ARRANGEMENTS?
• Telecommuting provides the company a
way to grow without having to incur any
additional fixed costs such as office
buildings, equipment, or parking lots.
• Some companies view the arrangement
as a way to combat high gas prices and
to attract talented employees who want
more freedom and control.
• Some managers are reluctant to have
their employees become “laptop
hobos” wasting time surfing the
Internet or playing online games instead
of working.
• Employees often express concerns
about being isolated.
• Managing the telecommuters then
becomes a matter of keeping employees
feeling like they’re connected and
engaged, a topic we delve into at the
end of the chapter as we look at today’s
organizational design challenges.
Telecommunicating
provides no fixed cost
i.e. office building
Companies view
arrangement i.e. gas
prices, freedom and
control
Employees concerns
about isolated
Keeping employees
connected

68. HOW CAN MANAGERS DESIGN EFFICIENT AND
EFFECTIVE FLEXIBLE WORK ARRANGEMENTS?
• Compressed workweek, which is a
workweek where employees work longer
hours per day but fewer days per week.
• Flextime (also known as flexible work
hours), which is a scheduling system in
which employees are required to work a
specific number of hours a week but are
free to vary those hours within certain
limits.
• Job sharing—the practice of having two or
more people split a full-time job.
• Contingent Workers are temporary,
freelance, or contract workers whose
employment is contingent upon demand
for their services.
• As organizations eliminate full-time jobs
through downsizing and other means of
organizational restructuring, they rely on a
contingent workforce to fill in as needed.
• The main issues od contingent workers,
especially those who are independent
contractors or freelancers, is classifying
who actually qualifies as one.
Compressed
workweek
Flextime
Job sharing
Contingent
Workers fill in as
needed

69. WHAT ARE TODAY'S ORGANIZATIONAL DESIGN CHALLENGES?
VideoTime–“TheImportanceofLearninginOrganizations”
 “An interview with David Garvin and
Amy Edmondson, Professors, Harvard
Business School. Learning organizations
generate and act on new knowledge.
The ability to do this enables companies
to stay ahead of change and the
competition”
 David A. Garvin teaches at the Harvard
Business School and is a two-time
winner of the annual McKinsey Award
for the best "Harvard Business Review"
article. Amy C. Edmondson PhD is the
Novartis Professor of Leadership and
Management at Harvard Business
School. She studies the social and
psychological dimensions of learning in
organizations.
https://www.youtube.com/watch?v=lUP
4WcfNyAA