organization theory structure design and applications stephen robbins

1. © 2010 Dorling Kindersley India Pvt. Ltd.
All rights reserved.
PowerPoint Presentation by Rajeesh Viswanathan
Jansons school of Business
Organization Theory
Structure, Design, and Applications
Third Revised Edition
Stephen P. Robbins and Mary Mathew
C H A P T E R
10
PART III: ORGANIZATIONAL DESIGN: CHOOSING THE RIGHT
STRUCTURAL FORM
Organizational Design Options

2. After reading this chapter, you should be able to:
 Explain why there should be a limited set of structural
configurations.
 Define the five basic parts of any organization.
 Describe the five basic structural configurations.
 List the strengths and weaknesses of each of these configurations.
 Explain when each configuration should be used.
 Classify each of the configurations in terms of their structural
characteristics.

3. INTRODUCTION
IS EVERY ORGANIZATION REALLY UNIQUE?
Organizations are like fingerprints. Each has its own unique
structure. Coca-Cola and PepsiCo, for instance, are both large
corporations that derive most of their income from soft drinks. But a
careful review of their organizations finds that their structures are
not identical clones of each other
There certainly aren’t millions of different forms or configurations.
Like fingerprints, many have common elements that, once identified,
allow for the development of a classification framework.

4. THE CASE FOR STANDARD
CONFIGURATION
Every configuration would contain a complex clustering of elements that
are internally cohesive and where the presence of some elements suggest
the reliable occurrence of others
If there were five key elements on which organizations differed and each
one could be rated as either “high,” “moderate,” or “low,” there could
potentially be different configurations if the elements were unrelated.

5. COMMON ELEMENTS IN ORGANIZATIONS
Mintzberg argues that there are five basic parts to any organization
1. The operating core. Employees who perform the basic work related to the
production of products and services.
2. The strategic apex. Top-level managers, who are charged with the overall
responsibility for the organization.
3. The middle line. Managers, who connect the operating core to the strategic
apex.
4. The techno-structure. Analysts, who have the responsibility for effecting
certain forms of standardization in the organization.
5. The support staff . People who fill the staff units, who provide in direct
support services for the organization.

6. SIMPLE STRUCTURE
The simple structure is said to be characterized most by what it is not rather
than what it is. The simple structure is not elaborated
 LOW COMPLEXITY
 LITTLE FORMALIZATION
 AUTHORITY CENTRALISED
STRENGTHS:
 SIMPLICITY
 LITTLE COST TO MAINTAIN
WEAKNESSES:
 LIMITED APPLICATION
WHEN TO USE?
 SMALL ORGANIZATIONS

7. MACHINE BUREAUCRACY
The machine bureaucracy has highly routine operating tasks, very
formalized rules and regulations, tasks that are grouped into functional
departments, centralized authority, decision making that follows the chain of
command, and an elaborate administrative structure with a sharp distinction
between line and staff activities.
The primary strength of the machine bureaucracy lies in its ability to perform
standardized activities in a highly efficient manner
Weakness of the machine bureaucracy is something we’ve all experienced
at one time or another when having to deal with people who work in these
organizations: obsessive concern with following the rules.

8. WHEN TO USE MACHINE BUREAUCRACY ?
 LARGE SIZE
 STABLE ENVIRONMENT
 TECHNOLOGY THAT CAN BE STANDARDISED.

9. THE PROFESSIONAL BUREAUCRACY
The 20th
century saw the birth of a new structural animal. It was created to allow
organizations to hire highly trained specialists for the operating core, while
still achieving the efficiencies from standardization. The confi guration is
called the professional bureaucracy, and it combines standardization with
decentralization
STRENGTH:
The strength of the professional bureaucracy is that it can perform specialized
tasks—ones that require the skills of highly trained professionals—with the
same relative efficiency as the machine bureaucracy can.
WEAKNESSES:
 there is the tendency for subunit conflicts to develop.
 the specialists in the professional bureaucracy, like their counterparts in the
machine form, are compulsive in their determination to follow the rules
WHEN TO USE?
 Large and complex environment

10. DIVISIONAL STRUCTURE
 SET OF AUTONOMOUS UNITS SELF
 COORDINATED BY A CENTRAL HEADQUARTERS.
 EACH IS A MACHINE BUREAUCRACY UNTO ITSELF
 DIVISION MANAGERS ARE FREE TO DIRECT THEIR DIVISIONS AS
LONG AS IT COMPLS TO THE OVERALL GUIDELINES SET BY THE
HEADQUARTERS

11. STRENGTHS:
 PROVIDES MORE ACCONTABILITY AND FOCUS ON OUTCOMES
 FREES UP THE HEADQUARTERS FROM THEIR CONCERN OF THE
DAY-TO-DAY OPERATING DETAILS
 CAN FOCUS ON THE LONG RUN
 AUTONOMY AND SELF-CONTAINMENT:EXCELLENT VEHICLE FOR
TRAINING AND DEVELOPING GENERAL MANAGERS
WEAKNESSES:
 DUPLICATION OF ACTIVITIES AND RESOURCES
 PROPENSITY TO STIMULATE CONFLICT
 AUTONOMY:MORE OF THEORY THAN PRACTICE DEVELOPS
RESENTMENT AMONG DIVISION MANAGERS
 CREATES COORDINATION PROBLEMS

12. WHEN TO USE?
 PRODUCT OR MARKET DIVERSITY
 WORKS BEST WHERE ENVIRONMENTS ARE ASSOCIATED
WITH NONSTANDARDISED PROCESSES AND OUTPUTS

13. THE ADHOCRACY
 It’s characterized by high horizontal differentiation, low vertical
differentiation, low formalization, decentralization, and great flexibility and
responsiveness.
 Horizontal differentiation is great because adhocracies are staffed
predominantly by professionals with a high level of expertise. Vertical
differentiation is low because the many levels of administration would
restrict the organization’s ability to adapt. Also, the need for supervision is
minimal because professionals have internalized the behaviors that
management wants

14. STRENGTHS:
 ABILITY TO RESPOND RAPIDLY TO CHANGE AND INNOVATION
 FACILITATE COORDINATION OF DIVERSE SPECIALISTS
WEAKNESSES:
 CONFLICT
 AMBIQUITIES EXIST OVER RESPONSIBILITIES AND AUTHORITY
 CAN CREATE SOCIAL STRESS AND PSYCHOLOGICAL TENSIONS
 INEFFICIENT CONFIGURATION
 VULNERABLE DESIGN

15. WHEN TO USE:
 PREFERRED IN THE EARLY YEARS OF AN ORGANIZATION’S LIFE-
CYCLE
 ASSOCIATED WITH STRATEGIES OF DIVERSITY,CHANGE AND/OR
RISK

16. SUMMARY OF THE 5 CONFIGURATIONS
CHAR. SIMPLE
STRUCTURE
MACHINE
BUREAUCRACY
PROFESSIONAL
BUREAUCRACY
DIVISIONAL
STRUCTURE
ADHOCRACY
SPECIALIZATION LOW HIGH FUNCTIONAL HIGH SOCIAL HIGH FUNCTIONAL HIGH SOCIALA
FORMALIZATION LOW HIGH LOW HIGH WITHIN
DIVISIONS
LOW
CENTRALIZATION HIGH HIGH LOW LIMITED
DECENTRALIZATIO
N
LOW
ENVIRONMENT SIMPLE,DYNAMIC SIIMPLE,STABLE COMPLEX, STABLE SIMPLE,STABLE COMPLEX,DYNAMI
C
GEN.
STRUCTURAL
CLASSIFICATION
ORGANIC MECHANISTIC MECHANISTIC MECHANISTIC ORGANIC