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Restructuring Organizations
By BETA RIZQI F
Restructuring Organizations
Learning
Objectives
Describe the most common organization
structures used today understand their
strengths and weaknesses
Present the process of downsizing
Describe and evaluate the reengineering
intervention
12-1 Structural Design
• Organization structure describe how the overall work of the organization is divided
into subunits and how these subunits are coordinated for task completion.
Based on this
picture,
organization
structures
should be
designed to fit
with at least
four factors: the
environment,
organization
size, technology,
and
organization
strategy
12-1a The Functional Structure
The most widely used organizational structure in the world today is the
basic functional structure
The advantages and disadvantages of functional
structures
12-1b The Divisional Structure
Also known as a product or self-contained-unit structure
The advantages and disadvantages of divisional structures.
12-1c The Matrix Structure
Some organization development (OD) practitioners have focused on maximizing the
strengths and minimizing the weaknesses of both the functional and the divisional
structures, and this effort has resulted in the matrix structure.
12-1d The Process Structure
A relatively new
logic for
structuring
organizations is
to form
multidisciplinary
teams around
core processes,
such as product
development,
order fulfillment,
sales generation,
and customer
support
12-1e The Customer-Centric Structure
• Closely related to the process-based structure, the customer-centric structure
focuses subunits on the creation of solutions and the satisfaction of key
customers or customer groups.
• Customer-centric structures have a very different look and feel.
As shown in Table 12.6,
customer-centric
structures have important
strengths and weaknesses.
Customer-centric
structures present one face
to the customer. Divisional
structures, for example,
can confuse customers
when each division sends
its own sales team.
12-1f The Network Structure
A network structure manages the diverse, complex, and dynamic relationships
among multiple organizations or units, each specializing in a particular business
function or task.
As shown in
Figure 12.8, the
network structure
redraws
organizational
boundaries and
links separate
organizations or
business units to
facilitate task
interaction.
Network
structures
typically have the
following
characteristics:
1. Vertical
disaggregation
2. Brokers.
3. Coordinating
mechanisms.
12-2 Downsizing
• Downsizing refers to interventions aimed at
reducing the size of the organization.
• This typically is accomplished by decreasing
the number of employees through layoffs,
attrition, redeployment, or early retirement or
by reducing the number of organizational
units or managerial levels through divestiture,
outsourcing, reorganization, or delayering
12-2a Application Stages
Successful downsizing interventions tend to proceed by
the following steps:
1. Clarify the
organization’s
strategy
2. Assess
downsizing
options and make
relevant chioces
3. Implement the
changes
4. Address the
needs of survivors
and those who
leave
5. Follow through
with growth plans
12-2b Results of Downsizing
12-3 Reengineering
The final restructuring intervention is
reengineering—the fundamental rethinking and
radical redesign of business processes to achieve
dramatic improvements in performance.
Reengineering transforms how organizations
traditionally produce and deliver goods and
services.
12-3a Application Stages
The following application steps are included in most reengineering efforts,
although the order may change slightly from one situation to another:
1. Prepare
the
organization
2. Fundamentally rethink
the way work gets done.
a. Identify and analyze core
business processes
b. Define performance
objectives
c. Design new processes
3.
Restructure
the
organization
around the
new business
processes
12-3b Results from Reengineering
• The results from reengineering vary widely.
• Industry journals and the business press
regularly contain accounts of dramatic
business outcomes attributable to
reengineering.
Restructuring organizations (1)

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Restructuring organizations (1)

  • 2. Restructuring Organizations Learning Objectives Describe the most common organization structures used today understand their strengths and weaknesses Present the process of downsizing Describe and evaluate the reengineering intervention
  • 3. 12-1 Structural Design • Organization structure describe how the overall work of the organization is divided into subunits and how these subunits are coordinated for task completion. Based on this picture, organization structures should be designed to fit with at least four factors: the environment, organization size, technology, and organization strategy
  • 4. 12-1a The Functional Structure The most widely used organizational structure in the world today is the basic functional structure
  • 5. The advantages and disadvantages of functional structures
  • 6. 12-1b The Divisional Structure Also known as a product or self-contained-unit structure
  • 7. The advantages and disadvantages of divisional structures.
  • 8. 12-1c The Matrix Structure Some organization development (OD) practitioners have focused on maximizing the strengths and minimizing the weaknesses of both the functional and the divisional structures, and this effort has resulted in the matrix structure.
  • 9.
  • 10. 12-1d The Process Structure A relatively new logic for structuring organizations is to form multidisciplinary teams around core processes, such as product development, order fulfillment, sales generation, and customer support
  • 11.
  • 12. 12-1e The Customer-Centric Structure • Closely related to the process-based structure, the customer-centric structure focuses subunits on the creation of solutions and the satisfaction of key customers or customer groups. • Customer-centric structures have a very different look and feel. As shown in Table 12.6, customer-centric structures have important strengths and weaknesses. Customer-centric structures present one face to the customer. Divisional structures, for example, can confuse customers when each division sends its own sales team.
  • 13.
  • 14.
  • 15.
  • 16. 12-1f The Network Structure A network structure manages the diverse, complex, and dynamic relationships among multiple organizations or units, each specializing in a particular business function or task. As shown in Figure 12.8, the network structure redraws organizational boundaries and links separate organizations or business units to facilitate task interaction.
  • 17. Network structures typically have the following characteristics: 1. Vertical disaggregation 2. Brokers. 3. Coordinating mechanisms.
  • 18. 12-2 Downsizing • Downsizing refers to interventions aimed at reducing the size of the organization. • This typically is accomplished by decreasing the number of employees through layoffs, attrition, redeployment, or early retirement or by reducing the number of organizational units or managerial levels through divestiture, outsourcing, reorganization, or delayering
  • 19. 12-2a Application Stages Successful downsizing interventions tend to proceed by the following steps: 1. Clarify the organization’s strategy 2. Assess downsizing options and make relevant chioces 3. Implement the changes 4. Address the needs of survivors and those who leave 5. Follow through with growth plans
  • 20. 12-2b Results of Downsizing
  • 21. 12-3 Reengineering The final restructuring intervention is reengineering—the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in performance. Reengineering transforms how organizations traditionally produce and deliver goods and services.
  • 22. 12-3a Application Stages The following application steps are included in most reengineering efforts, although the order may change slightly from one situation to another: 1. Prepare the organization 2. Fundamentally rethink the way work gets done. a. Identify and analyze core business processes b. Define performance objectives c. Design new processes 3. Restructure the organization around the new business processes
  • 23. 12-3b Results from Reengineering • The results from reengineering vary widely. • Industry journals and the business press regularly contain accounts of dramatic business outcomes attributable to reengineering.