Organizational Behavior & Organization Designs

Organizational Behavior & Organization
Designs

Introduction of Organization Designs
 Organizational design refers to
the way managers structure their
organization to reach the
organization’s goals.
 Structural elements include
 Allocation of duties, tasks, and
responsibilities between departments
and individuals.
 Reporting relationships.
 Number of levels.

Introduction of Organization Designs Conti…
 An incomplete picture because of
informal arrangements and underlying
behavioral processes.
 Two basic goals of organizational
design
 Get information to decision makers.
 Coordinate the interdependent parts of an
organization.

Forms of Organizational Design
 Three major forms
 Functional,
 Divisional,
 Matrix,
 Combine functional and divisional designs to get
a hybrid design
 Several variations of the divisional design
 Several evolving forms of organizational design

Organizational Design by Function
 Groups tasks of the organization according to the
activities they perform
 Typically configured into departments such as
manufacturing, engineering, accounting, marketing, .
. .
 Functional configurations can vary from one
organization to another depending on tasks and
goals

Organizational Design by Function Conti…
 Strategy
 Focused on a few products or services
in well defined markets with few
competitors
 External environment
 Stable,
 Simple,
 Little uncertainty
 Technical process
 Routine with little interdependence with
other parts of the organization
 Each major functional area helps
align the company with each

 Line and staff
Line does the major operating tasks
Staff gives support and serve in advisory
roles.
Emphasizes technical skills within each
function
 Individuals work with others who share
common backgrounds and views

 Strengths
 Specialization
 Brings specialists together
 Collegial relationships develop among specialists
 Clear career paths for specialists

 Weaknesses
 Does not help managers respond quickly to external
changes.
 Emphasis on specialization promotes a tunnel-vision
view of the goal of the function.
 Functional design can produce a set of widely
accepted behaviors and perceptions with the
organization.

Organizational Design by Division
 Uses decentralization.
 Divisions formed around products, services,
locations, customers, programs, or technical
process.
 Often evolves from a functional design.

Organizational Design by Division Conti…
 Strategy
 Focused on different products, services, customers, or
operating locations.
 Complex, fast changing, with moderate to high uncertainty.
 Non routine and interdependent with others parts of the
organization
 Size
 Large

 Strengths
 Easily adapts to differences in products, services,
clients, location, and the like. For example,
products and differ in how manufactured and
marketed.
 Products, services, and customers are highly
visible.
 Often appear in division names.

 Weaknesses
 Loses economies of scale because many functions such
as accounting are duplicated within the divisions.
 Technical specialization is more diffuse compared to a
functional design.
 Hard to get uniform application of policies and procedures
across divisions

Hybrid Organizational Design
 Hybrid design uses both functions and
divisions.
 The divisions decentralize some functions,
and the headquarters location centralizes
others.
 Centralized functions often are the costly

Hybrid Organizational Design Conti…
 Strategy
 Focused on many products or services
Fast changing, moderate to high uncertainty, complex
 Both routine and non routine, high interdependence with
functions and divisions
 Size
 Large

Hybrid Organizational Design Conti…
 Weaknesses
 Focus on division goals can lose total organization view.
Non-uniform application of organizational policies.
 Potential for high administrative overhead if staff
expands without control.

Matrix Organizational Design
 Used when two sectors of the external
environment demand management attention.
 Typically responding to the customer and
technical parts of the environment.
 Customers have special needs
 Technology changes fast

Matrix Organizational Design Conti…
 Conditions under which an organization may
choose a matrix design:
Pressures from the external environment for a dual focus.
 High uncertainty within the multiple sectors of the external
environment
 Constraints on human and physical resources

 Strengths
 Responsive, flexible, efficient use of costly
resources.
 Potentially high levels of human motivation
and involvement.
 Managers can respond fast to market
changes.
 People get information about a total project,
not only about their specialty.

 Weaknesses
 High levels of ambiguity because of multiple
authority relationships.
Ambiguity can encourage power struggles among
managers.
 Multiple authority relationships can give opposing
demands to people.
 High conflict potential can reach dysfunctional
levels and act as significant stressors for people in
matrix organizations

Types of Organizational Designs
 Organizational designs fall into two
categories
 Traditional.
 Contemporary.
 Traditional Designs
 Include simple structure, functional
structure, and divisional structure.
 Contemporary Designs
 Include team structure, matrix structure,
project structure, boundary less
organization, and the learning
organization.

Traditional Designs
 Simple Structure
A simple structure is defined as
a design with low
departmentalization, wide spans
of control, centralized authority,
and little formalization. This type
of design is very common in
small start up business.

Traditional Designs Conti…
 Divisional Structure
The divisional structure is a type
of organizational structure that
groups each organizational
function into a division.
These division can correspond to
either products or geographies.

Traditional Designs Conti…
 Functional Structure
A functional structure is defined as a
design that groups similar or related
occupational specialties together. It
is the functional approach to
departmentalization applied to the
entire organization.

Contemporary Designs Conti…
 Team Structure
A team structure is a design
in which an organization is
made up of teams, and
each team works towards a
common goal.
Employees are more
involved and empowered.

 Project Structure
A project structure is an
organizational structure in which
employees continuously work on
projects.
This is like a matrix structure; as
one project is completed,
employees move on to the next
project.

 Matrix Structure
A matrix structure is one that
assigns specialists from different
functional areas to work on
projects but who return to their
areas when the project is
completed.

 Learning Organization
A learning organization is defined as
an organization that has developed
the capacity to continuously learn,
adapt, and change. In order to have a
learning organization a company must
have very knowledgeable employees
who are able to share their knowledge
with others and be able to apply it in a
work environment.

 Boundary less Organization
A boundary less organization is one in
which its design is not defined by, or
limited to, the horizontal, vertical, or
external boundaries imposed by a
predefined structure. In other words it
is an unstructured design.

A Process View of Organizational Design
 Discards the view of packaging duties and tasks along
functional or divisional lines.
 The organization is a set of interconnected processes that
weave across multiple functions.
 Focuses on the results of a process not on people’s skills or
functions.
 People have responsibility for all or part of a process with
decision authority over those parts.

Organizational Behavior
Organizational Behavior the study of human
behavior, attitudes, and performance in
organizations
 Value of OB:
 Helps people attain the competencies needed to become
effective employees, team leaders/members, or managers
 Competency:
 An interrelated set of abilities, behaviors, attitudes, and
knowledge needed by an individual to be effective in
most professional and managerial positions

What Managers Do ?
 Managers:
 Who achieve goals through other people.
 Managerial Activities:
 Make decisions.
 Allocate recourse.
 Direct activities other to attain goals.

Management Functions
Management
Function
Planning Organizing
Controlling Leading

Where Managers work
 Organization:
A consciously coordinated social
unit, composed of two or more
people, that function on a relatively
continuous basis to achieve a
common goal or set of goals.

Management Functions Conti…
 Organizing
Determines what tasks to be
done, who is to do them, how to
tasked are grouped, who reports
to whom, and when decision are
made

 Planning
Planning which defines
the overall strategy to
achieve the
organization’s goals

 Leading
A function that includes
motivating employee
directing others,
selection the most
effective
communication
channels, and resolving
the conflicts.

 Controlling
Which ensures the things
are going the same way
as they should be with
minimal disruption

Informational
 Mentor
 seeks and receives a wide variety of special information (much of it current)
to develop a thorough understanding of the organization and environment;
emerges as the nerve center of internal and external information for the
organization.
 Disseminator
 Transmits information received from outsiders or from other subordinates to
members of the organization. Some information is factual; some involves
interpretation and integration of diverse value positions of organizational
influences. Disseminating what is of value, and how, is a critical
informational role.
 Spokesman
 transmits information (plans, policies, results, etc.) within and outside of
the organization; serves as an expert on the organization's industry.

Mintzberg’s Managerial Role
 Interpersonal
 Figurehead
 Leader
 Liaison
 Informational
 Mentor
 Disseminator
 Spokesman
 Decisional
 Entrepreneur
 Disturbance Handler
 Resource Allocator
 Negotiator

Interpersonal
 Figurehead
 Symbolic head; performs a number of routine duties of
a legal or social nature.
 Leader
 Motivates and activates subordinates; performs
staffing, training, and associated duties.
 Liaison
 Maintains a self-developed network of outside contacts
and informers who provide favors and information.

Management Skills Conti…
 Technical skills
 Comprise the knowledge and capabilities to
perform specialized tasks related to a specific field.
 Human Skills
 The ability to work with understand, and motivate
other people, both individually and in groups.
 Conceptual skills
 The mental ability to analyze and diagnose
complex situation

Contributing Disciplines to the OB Field
Conti…
 Sociology:
The study of people in
relation to their fellow
human beings.

Conti…
 Social Psychology:
An area with in psychology that
blends concept from psychology
and sociology and that focuses on
the influence of people on other
people.

Management Skills
 It is the ability to apply specialized
knowledge or expertise as how
professional they are with respect to
their knowledge
Technical Skills
Human skills
Conceptual Skills

 Psychology:
The science that seeks to
measure, explain, and
something change the
behavior of humans and
other animals.

Conti…
 Anthropology:
The study of societies to learn about
human beings and their activities

Conti…
 Political Science:
The study of the behavior of
individuals and groups with in a
political enjoinment

Challenges and Opportunities for OB
 Improving Quality and Productivity
 Quality management (QM)
 Process reengineering
 Responding to the Labor Shortage
 Changing work force demographics
 Fewer skilled laborers
 Early retirements and older workers
 Improving Customer Service
 Increased expectation of service quality
 Customer-responsive cultures

The Dependent Variables Conti…
 Productivity
 A performance measure that
include effectiveness and
efficiency.

 Turnover
The voluntary and
involuntary permanent
withdrawal from an
organization.

The Dependent Variables
 Dependent Variable
A response that is affected by an
independent variable

 Effectiveness
 Achievement of Goal

 Efficiency
The ratio of effective output
to the input required to
achieve it.

 Absenteeism
The failure to report to work.

 Job Satisfaction
A general attributes
towards one’s job the
difference between the
amount of reward
workers receive and
the amount thy believe
they should receive.

Organizational Behavior & Organization Designs

Organizational Behavior & Organization Designs

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