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organizational_structure_and_culture.ppt
- 1. 13-1 Michael A. Hitt C.Chet Miller Adrienne Colella Chapter 13 Organizational Structure and Culture Slides by Ralph R. Braithwaite
- 2. 13-2 Integrated Portfolio atFedEx Exploring Behavior in Action With all the acquisitions by FedEx, there was a need to change their structure. It adopted a multi-divisional structure. Corporate provides strategic direction and consolidated financial reporting. Significant authority has been delegated to the divisions. Each division manages its own specialized network of services. Do you know of other companies that operate in a similar fashion? Is this a good model for organizations to follow as they grow and develop?
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- 4. 13-4 Organizational Structure and Culture Organizational Structure Organizational Culture Theformal system of work roles and authority relationships that govern how associates and managers interact with one another. Involves the values and norms shared by managers and associates that influence behavior. It is a powerful force in organizations.
- 5. 13-5 Knowledge Objectives 1. Definekey elements of organizational structure, including both structural and structuring dimensions. 2. Explain how corporate and business strategies relate to structure. 3. Explain how environment, technology, and size relate to structure. 4. Define organizational culture, and discuss the competing-values cultural framework. 5. Discuss socialization. 6. Describe cultural audits and subcultures. 7. Explain the importance of a fit between individual values and organizational culture.
- 6. 13-6 Fundamental Elements of OrganizationalStructure Structural Characteristics Structuring Characteristics Hierarchy
- 7. 13-7 Structural Characteristics Span ofControl Height Departmentation
- 8. 13-8 Span of Control Adaptedfrom Exhibit 13-1: Average Span of Control: Effects on Height of the Hierarchy Average span of Four Average span of Ten Highest Lowest Organizational Level 1000 100 10 1 Associates 250 63 17 4 1 Associates 1000
- 9. 13-9 Functional Organization Adapted fromExhibit 13-2: Simplified Functional Organization VP Research and Development VP Research and Development VP Operations VP Human Resources VP Finance VP Marketing CEO
- 10. 13-10 Divisional Organization Adapted fromExhibit 13-3: Simplified Divisional Organization CEO Head of Operations Head of R&D Head of Human Resources Head of Finance Head of Marketing V.P. Product/Service Area 1 Head of Operations Head of R&D Head of Human Resources Head of Finance Head of Marketing V.P. Product/Service Area 1 Head of Operations Head of R&D Head of Human Resources Head of Finance Head of Marketing V.P. Product/Service Area 1
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- 12. 13-12 The Modern Organization Flexibleempowering type of structure Organic Learning Boundaryless Mechanistic Non-Learning Traditional Fewer management levels, broader spans of control, less centralization, standardization, formalization and specialization.
- 13. 13-13 Freedom Substantial freedom mayexist, but 1. Freedom is not unlimited 2. Alternative mechanisms are used to ensure that individuals are working for the good of the organization 3. Values are shared 4. Reward systems are used to promote appropriate behavior
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- 15. 13-15 Diversification Strategy and Structure Adaptedfrom Exhibit 13-4: Matches between Diversification Strategy and Structure Holding Company Unrelated product Divisional Unrelated product Divisional Related product Divisional Dominant product (several products) Functional Dominant product (few products) Functional Single product Structure Diversification
- 16. 13-16 Business Strategy • Lowcost/low price • Product/service differentiation • Supporting structure including strategic business units – SBUs How a firm competes for success against other organizations in a particular market.
- 17. 13-17 Experiencing Strategic OB IDEO andDifferentiation Strategy IDEO demonstrates a differentiation strategy, highlights that occasionally organizations supplement their human capital, and they value teams with diverse members. Is this an effective approach to business? How can this approach help other businesses and organizations? What are your thoughts about IDEO’s approaches: • Form a diverse team • Team members brainstorm • Team members engage in rapid prototyping • Team members implement the fruits of their labors
- 18. 13-18 Environment and Basic Structure •Effective organizations experiencing high environmental uncertainty tend to be more organic. • Effective organizations experiencing low environmental uncertainty tend to be less organic. Environmental uncertainty – the degree to which an environment is complex and changing; uncertain environments are difficult to monitor and understand. Jay W. Lorsch Paul R. Lawrence
- 19. 13-19 Environment and Integration Adaptedfrom Exhibit 13-5: Integration in Organizations Slack Resources Self-Contained Tasks Information Technology Lateral Relations Increasing Implementation Complexity Increasing Richness of Information Processing
- 20. 13-20 Alternative Lateral Processes LiaisonRoles Direct Contact Matrix Designs Managerial Linking Roles Integrating Roles Teams Taskforces Lateral Processes
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- 22. 13-22 Technology and Structure CharlesPerrow Task Variability Task Analyzability Four categories of technology Routine Craft Engineering Nonroutine
- 23. 13-23 Organizations and Technology Adaptedfrom Exhibit 13-6: Organizations and Technology High Low Task Analyzability High Low Task Variability Specialized Engineering Consulting Firm Engineering Public School Craft Research and Development Firm Non-Routine Mass-Production Firm Routine
- 24. 13-24 Experiencing Strategic OB Google CultureAttracts High-Quality Associates Larry Page and Sergy Brin Do you think Google would have enjoyed its success had a different type of structure and culture been introduced? What types of organizations could benefit with a similar structure and culture? What types of organizations might have difficulty? As Google continues to grow, will the culture survive or will it possibly be replaced by a more traditional culture?
- 25. 13-25 Developing Organizational Culture Adaptedfrom Exhibit 13-7: Process of Developing Organizational Culture Organizational Culture Norms Reinforcing Outcomes Shared Values Individual and Group Behavior
- 26. 13-26 Organizational Culture Adapted fromExhibit 13-8: Competing Values Model of Organizational Culture Effectiveness Cohesion and Morale Leadership Mentors and Coaches Clan Effectiveness Creativity and Innovation Leadership Entrepreneurs and Innovators Adhocracy Effectiveness Goal Achievement and Winning Leadership Hard Drivers and Competitors Market Effectiveness Efficiency and Order Leadership Monitors and Organizers Hierarchy Internal Focus/Integration External Focus/ Differentiation Stability/Control Flexibility/ Discretion
- 27. 13-27 Cultural Socialization A processthrough which an organization imparts its values to newcomers Context Content Social Dynamics
- 28. 13-28 Cultural Audit A toolfor assessing and understanding the culture of an organization. Use these five steps for conducting the cultural audit: Analyze process and content Analyze responses to critical incidents Analyze values and beliefs of culture creators Explore anomalies or puzzling features Examine linkage – culture with goals Subcultures – groups that share values that differ from the main values of the organization.
- 29. 13-29 Managerial Advice Finding a Fitat Home Depot Robert Nardelli Do you agree that an individual’s management style and values should agree with the organization’s culture? Why or why not? Do you think Nardelli is what Home Depot needed at the time? Have you worked with a leader whose style was very different than the culture of the organization? What was that like? Can some organizations benefit from a major change in leadership philosophy?
- 30. 13-30 Person-Organization Fit Abstract idealsthat relate to proper life goals and methods for reaching those goals. Values Types of personal goals that one ought to have Types of behaviors that one ought to use in reaching those goals End-Means Dimension
- 31. 13-31 Types of PersonalValues Means (Behavior) Values End (Goal) Values Adapted from Exhibit 13-9: Types of Personal Values
- 32. 13-32 The Strategic Lens 1.Consider an organization of which you are a member or an associate. What is the structure in this organization? Is it centralized or decentralized? Is it organic and flexible? How would you change the structure in this organization to make it more effective? 2. How would you describe the culture in the organization discussed in question #1? How does the culture affect members’ behavior in the organization? 3. When you become a manager, what type of culture will you establish in your unit? What values do you want to emphasize? Why?
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