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Management chapter 6 organization structure.pptx
1.
2.
1. Identify the
basic elements of organizations. 2. Describe the bureaucratic perspective on organization design. 3. Identify and explain key situational influences on organization design. 4. Describe the basic forms of organization design that characterize many organizations. 5. Identify and describe emerging issues in organization design. Learning Outcomes After studying this chapter you should be able to: © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–2
3.
The Basic Elements
of Organizing © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–3 • Organization Structure and Design –The overall set of structural elements that can be used to configure the total organization. –A means to implement strategies and plans to achieve organizational goals. • Job Specialization (Division of Labor) –The degree to which the overall task of the organization is broken down and divided into smaller component parts.
4.
Job Specialization © 2016
Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–4 • Benefits of Specialization –Workers can become proficient at a task. –Transfer time between tasks is decreased. –Specialized equipment can be more easily developed. –Employee replacement becomes easier. • Limitations of Specialization –Employee boredom and dissatisfaction with mundane tasks. –Anticipated benefits of specialization do not always occur.
5.
Alternatives to Job
Specialization Job rotation Job enlargement Job enrichment Work teams Job Specialization Alternatives Job characteristics approach © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–5
6.
Job Characteristics: Core
Dimensions Skill Variety The number of tasks a person does in a job Task Identity The extent to which the worker does a complete or identifiable portion of the total job Task Significance The perceived importance of the task by the worker Autonomy The degree of control the worker has over how the work is performed Feedback The extent to which the worker knows how well the job is being performed Growth Need Strength The desire for people to grow, develop, and expand their capabilities that is their response to the core dimensions © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–6
7.
FIGURE 6.1 The
Job Characteristics Approach © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–7
8.
Grouping Jobs: Departmentalization •
Departmentalization –The process of grouping jobs according to some logical arrangement. • Rationale for Departmentalization –Organizational growth exceeds the owner- manager’s capacity to personally supervise all of the organization. –Additional managers are employed and assigned specific employees to supervise. © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–8
9.
Common Bases of
Departmentalization Computers Printers Software CEO By Product Home Users Business Users Educational Users CEO By Customer Africa Europe Asia CEO By Location Finance Marketing Operations CEO © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–9 By Function
10.
Functional Departmentalization © 2016
Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–10 • Advantages – Each department can be staffed by functional-area experts. – Supervision is facilitated in that managers only need be familiar with a narrow set of skills. – Coordination inside each department is easier. • Disadvantages – Decision making becomes slow and bureaucratic. – Employees narrow their focus to the department and lose sight of organizational goals/ issues. – Accountability and performance are difficult to monitor. The grouping of jobs involving the same or similar activities
11.
Product Departmentalization © 2016
Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–11 • Advantages – All activities associated with one product can be integrated and coordinated. – Speed and effectiveness of decision making are enhanced. – Performance of individual products or product groups can be assessed. • Disadvantages – Managers may focus on their product to the exclusion of the rest of the organization. – Administrative costs may increase due to each department having its own functional-area experts. The grouping of activities around products or product groups
12.
Customer Departmentalization The grouping
of activities to respond to and interact with specific customers and customer groups • Advantage – Skilled specialists can deal with unique customers or customer groups. • Disadvantage – A large administrative staff is needed to integrate activities of various departments. © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–12
13.
Location Departmentalization The grouping
of jobs on the basis of defined geographic sites or areas. • Advantage – Enables the organization to respond easily to unique customer and environmental characteristics. • Disadvantage – Large administrative staff may be needed to keep track of units in scattered locations. © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–13
14.
Establishing Reporting Relationships Scalar principle Span
of control Unity of command Establishing the Chain of Command © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–14
15.
Establishing Reporting Relationships: Tall
Versus Flat Organizations © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–15 • Tall Organizations – Are more expensive because of the number of managers involved. – Foster more communication problems because of the number of people through whom information must pass. • Flat Organizations – Lead to higher levels of employee morale and productivity. – Create more administrative responsibility for the relatively few managers. – Create more supervisory responsibility for managers due to wider spans of control.
16.
Tall Versus Flat
Organizations President President Tall Organization © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–16 Flat Organization
17.
Distributing Authority © 2016
Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–17 • Authority –Power that has been legitimized by the organization. • Delegation –The process by which managers assign a portion of their total workload to others. • Reasons for Delegation –To enable the manager to get more work done by utilizing the skills and talents of subordinates. –To foster development of subordinates by having them participate in decision making and problem solving.
18.
Steps in the
Delegation Process Manager Step 1 Assigning responsibility Step 3 Creating accountability Step 2 Granting authority Manager Subordinate Manager Subordinate Manager Manager Subordinate © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–18
19.
Problems in Delegation ©
2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–19 • Manager –Reluctant to delegate. –Disorganization prevents planning work in advance. –Subordinate’s success threatens superior’s advancement. –Lack of trust in the subordinate to do well. • Subordinate –Reluctant to accept delegation for fear of failure. –Perceives no rewards for accepting additional responsibility. –Prefers to avoid any risk and responsibility.
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Factors in the
Choice of Centralization or Decentralization History of the organization Nature (cost and risk) of decisions to be made External environment’s complexity and uncertainty Organization’s Centralization Choice © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–20
21.
Coordinating Activities • Coordination –The
process of linking the activities of the various departments of the organization. • The Need for Coordination –The greater the interdependence of departments and work groups, the greater the need for coordination. © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–21
22.
Major Forms of
Interdependence Input Output Sequential Reciprocal Pooled Input Input Input Output Output Input Output © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–22 Input Output Input
23.
Structural Coordination Task Forces Integrating Departments Electronic Coordination Structural Coordination Techniques Management Hierarchy Rules
and Procedures Managerial Liaison Roles © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–23
24.
Electronic Coordination Techniques •
Electronic Information Technology –E-mail and instant messaging –Electronic scheduling to coordinate arrangements for group meetings –Local networks structured around a common web-based communication system. –Video-conferencing –Wireless networks –Social networks © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–24
25.
The Bureaucratic Model of
Organization Design © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–25 • Bureaucratic Model (Max Weber) –A logical, rational, and efficient organization design based on a legitimate and formal system of authority. –Characteristics: 1. A division of labor with each position filled by an expert 2. A consistent set of rules to ensure uniformity in task performance 3. A hierarchy of positions, which creates a chain of command 4. Impersonal management with appropriate social distance between superiors and subordinates 5. Employment and advancement based on technical expertise and employees protected from arbitrary dismissal
26.
Bureaucratic Model Efficiency in
function Prevention of favoritism Recognition of and requirement for expertise Advantages Organizational inflexibility and rigidity Neglect of social and human processes Belief in “one best way” to design organizations Disadvantages © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–26
27.
Situational Influences on
Organization Design Core Technology 1. Unit or small batch 2. Large batch or mass production 3. Continuous process Environment • Stable/unstable • Mechanistic/organic organizations • Differentiation/integration Organization Size and Life Cycle • Unstable, growing rapidly • Stable, mature Optimal Organization Design © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–27
28.
Core Technology and
Organization Design Unit or small-batch technology Large batch/mass production Continuous process Woodward’s Basic Forms of Technology © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–28
29.
Woodward’s Findings © 2016
Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–29 • Unit or small-batch technology and continuous process firms tend to be organic—less rigid and more informal. • Large batch/mass production firms tend to be mechanistic—bureaucratic with higher degrees of labor specialization. • Organizational success was related to the extent to which organizations followed the typical pattern appropriate to their technology.
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Environment–Organization Design (Burns and
Stalker) © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–30 • Research focused on identifying extreme forms of the organizational environment: –Stable environments that remain constant over time. –Unstable environments subject to uncertainty and rapid change. • Organization Designs –Mechanistic organizations occur most frequently in stable environments. –Organic organizations are found in unstable and unpredictable environments.
31.
Differentiation and Integration (Lawrence
and Lorsch) © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–31 • Predicted environmental factors have differential effects on organization units; affecting the overall design of the organization. –Differentiation, the extent an organization is broken into subunits, is associated with stable environments. –Integration is the degree to which the various subunits must work together in a coordinated fashion. –The degree of differentiation and integration needed by an organization depends on the stability of the environments that its subunits face.
32.
Effects of Size
and Life Cycle © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–32 • Organizational Size –Defined as the total number of full-time or full-time equivalent employees. –Research findings: • Small firms tend to focus on their core technology. • Large firms have more job specialization, standard operating procedures, more rules and regulations, and are more decentralized. • Organizational Life Cycle –The progression of organizations as they grow and mature—birth, youth, midlife, and maturity.
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Basic Forms of
Organization Design © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–33 • Functional or U-form (Unitary) Design –Organizational members and units are grouped into functional departments. • Requires coordination across all departments. • Resembles functional departmentalization in its advantages and disadvantages. • Promotes a narrowing functional rather than broader organizational focus • Tends to promoter centralization • Is common in smaller organizations
34.
FIGURE 6.2 Functional
(U form) Design for a Small Manufacturing Company © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–34
35.
Organization Design (cont’d) ©
2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–35 • Conglomerate or H-form (Holding) Design –Organization consists of a set of unrelated businesses with a general manager for each business. –Holding-company design is similar to product departmentalization. –Coordination is based on the allocation of resources across companies in the portfolio. –Design has produced only average to weak financial performance; has been abandoned for other approaches.
36.
FIGURE 6.3 Conglomerate
(H form) Design at Samsung © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–36
37.
Organization Design (cont’d) ©
2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–37 • Divisional or M-form (Multidivisional) Design –Is based on multiple businesses in related areas operating within a larger organizational framework; following a strategy of related diversification. –Activities are decentralized down to the divisional level; others are centralized at the corporate level. –The largest advantages of the M-form design are the opportunities for coordination and sharing of resources.
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FIGURE 6.4 Multidivisional
(M Form) Design at Hilton Hotels © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–38
39.
Organization Design (cont’d) ©
2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–39 • Matrix Design –An organizational arrangement based on two overlapping bases of departmentalization. • A set of product groups or temporary departments are superimposed across the functional departments. • Employees in the matrix become members of both their departments and a project team under a project manager. • The matrix creates a multiple command structure in which an employee reports to both departmental and project managers.
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Organization Design (cont’d) ©
2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–40 • Matrix design is useful when: –There is strong environmental pressure. –There are large amounts of information to be processed. –There is pressure for shared resources.
41.
FIGURE 6.5 A
Matrix Organization © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–41
42.
Organization Design (cont’d) ©
2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–42 • Matrix Design Advantages –Enhances organizational flexibility. –Fosters high motivation and increased organizational commitment. –Provide opportunity for team members to learn new skills. –Makes efficient use of human resources. –Allows team members to serve as bridges to their departments. –Is a useful vehicle for decentralization.
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Organization Design (cont’d) ©
2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–43 • Matrix Design Disadvantages –Employees are uncertain about reporting relationships. –Managers may view design as an anarchy in which they have unlimited freedom. –The dynamics of group behavior may lead to slower decision making, one-person domination, compromise decisions, or a loss of focus. –More time may be required for coordinating task- related activities.
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Organization Design (cont’d) ©
2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–44 • Hybrid Design –Is based on two or more organization design forms such as a mixture of related divisions and a single unrelated division. –Most organizations use a modified form of organization design that permits them to have the flexibility to make strategic adjustments.
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The Future of
Organization Design Emerging Organization Design Issues Team-based organizations Virtual organizations Learning organizations © 2016 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6–45
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