Organization theory and design 03 2013

3 หลักการการออกแบบองค์กรที่มีประสิทธิภาพ

organization @TC 2013

หัวข้อบรรยาย/กรณีศึกษา
1 แนวคิดทฤษฎีองค์การ
2 โครงสร้างและการออกแบบองค์การ
Focus on task performance and structure
Focus on motivation
Focus on adjustments to the external environment
3 หลักการการออกแบบองค์กรที่มีประสิทธิภาพ
4 Fundamentals of Organization Designพื้นฐานแนวคิดการออกแบบโครงสร้างองค์การ
C 1 : Harvard Business Case / NYPD New
5 Designing Around the Customer
C 2 : Harvard Business Case /Transformation at Ernst & Young United Kingdom

What was it all about?

Get organized… & make it work:
STRUCTURE

To get the job done!

PROCESSES


Why does Structure Matter?
• 
• 
• 
• 

Influences what employees pay attention to
Affects ease of coordination
Impacts the speed, cost, and quality of business activities
Drives relationships and interaction


Key Success Factors
1. 

Understanding business context is imperative.


Method Means Knowing the Context
•  What is the business and the organizational mission?
•  Its stage in the lifecycle?
•  Its value proposition?
•  Its core competencies?
•  Its desired goals and strategies?
•  Process strengths and weaknesses?

… and only then applying design principles!

How Good is the Fit?


Alignment Examples

Open/Flexible

Technology

Management System

Culture

Process

Open/Flexible
Closed Task Technical System

People

Formal

Informal


The Star Model
Strategy

People

Structure

Rewards

Processes

•  Different Strategies =

Different Organizations
•  Organization is More than
Structure
•  Alignment = Effectiveness

Behavior

Performance

Culture
© Jay R. Galbraith


Key Success Factors
1. 
2. 
3. 
4. 

Understanding business context is imperative.
Always formulate goals for the design or redesign.
Designs can be prescriptive or contingent
Alignment is critical.


Organization Structure


Organization Structure

•  5 basic forms or configurations
•  3 parts to management structure
–  Hierarchy (no. of levels)
–  Spans of control
–  Centralization vs. decentralization
•  Best arrangements for coordination and control


Mintzberg’s 5 Organizational Forms
1. 
2. 
3. 
4. 
5. 

Simple Structure
Machine Bureaucracy
Professional Bureaucracy
Divisionalized Form
Adhocracy


What are Pros and Cons?
•  Functional
•  Product/Service
•  Geographies and/or customers
•  Business Process Teams
•  Matrix


Parts of Management Structure

1. 

Hierarchy (No. of levels)



1. 
2. 

Spans of control



1. 
2. 
3. 

Spans of control
Centralization vs.
Decentralization
• 
• 
• 
• 
• 

Cost
Control
Responsiveness
Independence
Technology

Corporate

Regional

Field Locations


Considerations
Financial
Scalability

Decentralize
Small economy of
scale

Centralize
Large economy of
scale

Cost-Structure

Charge-Back

Overhead

Proximity to
End User

Decentralize
High level of
knowledge

Centralize
Low level of knowledge

Competitive
Advantage

Source near
The market

Source is internal

Mission

Very market- driven

Slightly market- driven

External


Considerations
Operational
Decentralize

Centralize

Oversight &
Control

Low Importance

High Importance

Internal
Networks

Low level of
coordination

High Level of Coordination

Speed of
Business

Fast Moving

Slow Paced


Considerations
Strategic

Centralize

Decentralize
Arise from
Business units

Maintained at the top

Leadership
Style

Bottom-Up

Top-Down

Culture &
Values

Diverse

Shared

Entrepreneur-ship
and
Innovation

Highly
Important

Low Importance

Competencies


Coordination


Coordination & Control
•  Supervision
•  Standardization of
–  Work
- Skills
- Outputs
•  Formal & Ad Hoc Teams
•  Commitment and Employee Involvement


THE NEED FOR COORDINATION
•  If departments and work groups are interdependent; the greater the need for coordination…
especially if the departments are decentralized.

•  Pooled interdependence
–  When units operate with little interaction; their output is simply pooled at the organizational
level.

•  Sequential interdependence
–  When the output of one unit becomes the input of another unit in sequential fashion.

•  Reciprocal interdependence
–  When activities flow both ways between units.
ARE STRUCTURAL COORDINATING MECHANISMS NEEDED?
Can we rely on the hierarchy, rules and procedures, and an occasional committee meeting to
coordinate across these boundaries?


Coordinating Mechanisms: six basic mechanisms :
Mutual Adjustment – informal communication. It is a very simple form.
Direct Supervision – one person coordinates by giving orders to others.
Standardization of Work Processes – procedures and programming.
Standardization of Outputs – not what is to be done, but of its results.
Standardization of Skills and Knowledge – the worker is standardized, such as with professionalization
in a school (e.g., physicians)
Standardization of Norms – workers share common beliefs and can achieve coordination based on it.

Organizational Work Complication
Mutual Adjustment

24

Direct Supervision

Standardization


STRUCTURAL COORDINATING MECHANISMS
•  The Managerial Hierarchy
–  Going up the hierarchy (chain of command) to find a manager with the authority to make the
decisions that affect the interdependent units.
•  Rules and Procedures
–  Coordinating routine activities via rules and procedures that set priorities and guidelines for
actions.
•  Liaison Roles
–  Designating a specific manager who will facilitate the flow of information to the
interdependent units by acting as a common point of contact.
•  Task Forces (Temporary problem-solving groups)
–  Used with multiple units when coordination is complex requiring more than one individual
and the need for coordination is acute.
–  Committees disbanded when the need for coordination has been met.
•  Integrating Departments (Permanent structures)
–  Permanent organizational units that maintain internal integration and coordination on an
ongoing basis.
–  May have authority and budgetary controls.

FACTORS THAT AFFECT THE DIFFICULTY OF ACHIEVING
INTEGRATION
LORSCH (77)
•  THE DEGREE OF DIFFERENTIATION
•  THE NUMBER OF UNITS REQUIRING INTEGRATION
•  PATTERNS OF INTERDEPENDENCE BETWEEN THE UNITS
–  SEQUENTIAL
–  POOLED
–  RECIPROCAL

•  THE FREQUENCY OF INTERACTION REQUIRED AMONG THE UNITS
•  THE COMPLEXITY AND IMPORTANCE OF THE INFORMATION SHARED

What is it all about?

to the process organization


Organizational Design & Processes
•  An organization’s structure is not an end in itself. But it sets the context for
managerial action.
•  Structure is just one tool that managers can employ to achieve the objectives
that have been set.

Source: Nohria, N. “Note on Organization Structure” Harvard Business School


… to the process organization
Moving away with the functional silos
To create new organizational structures «process-complete unit»
each able to perform all the cross-functional steps or tasks required to meet
customers' needs.

Source: Majchrzak, A. & Wang, Q. «Breaking the Functional Mind-set in Process Organizations» HBR


… to new forms of organization
The “disaggregated”… “virtual”… “networked”… :
•  Creating smaller sub-units with significant decisions rights;
•  Decreasing the layers of management and the extent of central staff;
•  Joint-venture and strategic-alliance and outsourcing: the line of what is inside
and what is outside has blurred.

Source: The Economist “The new organisation: a survey of the company”


… to new forms of organization
The “disaggregated”… “virtual”… “networked”… :
•  Linked closely where opportunities to create values and loosely where values
lie in differentiation
•  And where IT becomes an electronic glue …
•  Redrawing the boundaries …



New Organization Model: New Management Roles
•  Building from small front-line operating units;
•  Cross-unit integrative process;
•  Commitment to empowerment;

Source: BARTLETT, C.A.; GHOSHAL S. “The Myth of the Generic Manager”



… in building and managing a company that stimulates people to take
initiatives, to collaborate, to renew themselves and the organization…

Source: GOSHAL, S., BARTLETT, C.A. “ Building Organizational Capabilities”


•  The Entrepreneurial Process:
–  Looking for innovation & opportunities
•  The Integration Process:
–  Linking resources and competencies
•  The Renewal process:
–  Challenging its own beliefs and practices

Source: GOSHAL, S., BARTLETT, C.A. “ Building Organizational Capabilities”



ENTREPRENEURS
COACHES
LEADERS

Source: BARTLETT, C.A.; GHOSHAL S. “The Myth of the Generic Manager”


New Organization Model: What does it take?
•  LEADERSHIP
–  … more responsibilities handed down to the workforce at large, many
more people than before are having to exercise authority.
•  TALENT
–  … hold on knowledge workers…essentials to its operations… and who
are not motivated only by money.
•  CULTURE
–  … the compass that steers employees in the way the organisation wants
them to go, is its culture.



LEADERSHIP &
ORGANIZATION

PROCESSES &
TOOLS

INNOVATION
EFFECTIVENESS

CULTURE &
VALUE

PEOPLE &
SKILLS
EVERYTHING IS LINK TOGETHER…

Source: Loewe, P. & Dominiquini, J «Overcoming the barriers to effective innovation» Strategy & Leadership


New Organization Model:
Configuring:
ü Structure
ü Processes
ü Reward systems
ü People practices & policies

TO SUPPORT A NEW STRATEGY
How can we get organized to deliver on the strategy?

Source: Galbraith, J & al: « Designing Dynamic Organization » Chapter 1 ‘Getting started’


New Organization Model:
To the reconfigurable organization:
ü Active leadership:
The organization as a source of competitive advantage
ü Knowledge management:
Collect and share knowledge across boundaries… IT connected
ü Learning:
People who have «learning aptitude» and can move around
ü Flexibility:
And more changes to come… tolerance for ambiguity and unpredictability
TO RESPOND TO
AN EVER-CHANGING ENVIRONMENT
Source: Galbraith, J & al: « Designing Dynamic Organization » Chapter 1 ‘Getting started’


Organization theory and design 03 2013

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