Organizational   Behavior, 9/ESchermerhorn, Hunt, and       Osborn                 Prepared by             Michael K. McCu...
Chapter 17 Study Questions What is strategy and how is it linked to  different types of organizational goals? What are t...
Study Question 1: What is strategy andhow is it linked to different types oforganizational goals? Strategy.  – The proces...
Study Question 1: What is strategy andhow is it linked to different types oforganizational goals? Elements of conventiona...
Study Question 1: What is strategy andhow is it linked to different types oforganizational goals? Societal goals.   – Ref...
Study Question 1: What is strategy andhow is it linked to different types oforganizational goals? Societal contributions ...
Study Question 1: What is strategy andhow is it linked to different types oforganizational goals? Output goals.  – Define...
Study Question 1: What is strategy andhow is it linked to different types oforganizational goals? Systems goals.  – Conce...
Study Question 1: What is strategy andhow is it linked to different types oforganizational goals? Well-defined systems go...
Study Question 2: What are the basicattributes of organizations? Successful organizations develop a structure  consistent...
Study Question 2: What are the basicattributes of organizations? Vertical specialization.   – A hierarchical division of ...
Study Question 2: What are the basicattributes of organizations?          Organizational Behavior: Chapter 17             ...
Study Question 2: What are the basicattributes of organizations? Chain of command.   – A listing of who reports to whom u...
Study Question 2: What are the basicattributes of organizations? Line units.   – Work groups that conduct the major busin...
Study Question 2: What are the basicattributes of organizations? Internal versus external units.   – Internal line units....
Study Question 2: What are the basicattributes of organizations?          Organizational Behavior: Chapter 17             ...
Study Question 2: What are the basicattributes of organizations? Some firms are outsourcing many of their staff  function...
Study Question 2: What are the basicattributes of organizations? Control.  – The set of mechanisms used to keep actions o...
Study Question 2: What are the basicattributes of organizations? Output controls.  – Focus on desired targets and allow m...
Study Question 2: What are the basicattributes of organizations? Process controls.  – Specify the manner in which tasks a...
Study Question 2: What are the basicattributes of organizations? Policies, procedures, and rules.  – Policies.     • Guid...
Study Question 2: What are the basicattributes of organizations? Policies, procedures, and rules (cont.).  – Rules.     •...
Study Question 2: What are the basicattributes of organizations? Formalization.  – The written documentation of policies,...
Study Question 2: What are the basicattributes of organizations? Deming’s 14 points for achieving total quality  manageme...
Study Question 2: What are the basicattributes of organizations? Deming’s 14 points for achieving total quality  manageme...
Study Question 2: What are the basicattributes of organizations? Deming’s 14 points for achieving total quality  manageme...
Study Question 2: What are the basicattributes of organizations? Centralization and decentralization.  – Centralization. ...
Study Question 2: What are the basicattributes of organizations? Benefits of decentralization.  – Higher subordinate sati...
Study Question 3: How is workorganized and coordinated? Horizontal specialization.  – A division of labor that establishe...
Study Question 3: How is workorganized and coordinated?         Organizational Behavior: Chapter 17                       ...
Study Question 3: How is workorganized and coordinated?         Organizational Behavior: Chapter 17                       ...
Study Question 3: How is workorganized and coordinated?         Organizational Behavior: Chapter 17                       ...
Study Question 3: How is workorganized and coordinated? Coordination.  – The set of mechanisms that an organization    us...
Study Question 3: How is workorganized and coordinated? Personal methods of coordination.   – Produce synergy by promotin...
Study Question 3: How is workorganized and coordinated? Impersonal methods of coordination.   – Produce synergy by stress...
Study Question 4: What are bureaucracies andwhat are the common structures? Bureaucracy.  – An ideal form of organization...
Study Question 4: What are bureaucracies andwhat are the common structures?            Organizational Behavior: Chapter 17...
Study Question 4: What are bureaucracies andwhat are the common structures? Mechanistic type of bureaucracy (machine  bur...
Study Question 4: What are bureaucracies andwhat are the common structures? Benefits of the mechanistic type.   – Efficie...
Study Question 4: What are bureaucracies andwhat are the common structures? Organic type of bureaucracy (professional  bu...
Study Question 4: What are bureaucracies andwhat are the common structures? Benefits of the organic type.   – Good for pr...
Study Question 4: What are bureaucracies andwhat are the common structures? Common types of hybrid structures.  – Divisio...
Study Question 4: What are bureaucracies andwhat are the common structures? The conglomerate simultaneously  illustrates ...
COPYRIGHTCopyright 2005 © John Wiley & Sons, Inc. All rights reserved.Reproduction or translation of this work beyond that...
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Ch17

  1. 1. Organizational Behavior, 9/ESchermerhorn, Hunt, and Osborn Prepared by Michael K. McCuddy Valparaiso University John Wiley & Sons, Inc.
  2. 2. Chapter 17 Study Questions What is strategy and how is it linked to different types of organizational goals? What are the basic attributes of organizations? How is work organized and coordinated? What are bureaucracies and what are the common structures? Organizational Behavior: Chapter 17 2
  3. 3. Study Question 1: What is strategy andhow is it linked to different types oforganizational goals? Strategy. – The process of positioning the organization in the competitive environment and implementing actions to compete successfully. – A pattern in a stream of decisions. • Choices regarding goals and the way the firm organizes to accomplish them. Organizational Behavior: Chapter 17 3
  4. 4. Study Question 1: What is strategy andhow is it linked to different types oforganizational goals? Elements of conventional strategy decisions. – Choosing the types of contributions the firm intends to make to society. – Precisely whom the firm will serve. – Exactly what the firm will provide to others. Organizational Behavior: Chapter 17 4
  5. 5. Study Question 1: What is strategy andhow is it linked to different types oforganizational goals? Societal goals. – Reflect an organization’s intended contributions to the broader society. – Enable organizations to gain legitimacy, a social right to operate, and more discretion for their non-societal goals and operating practices. – Enable organizations to make legitimate claims over resources, individuals, markets, and products. Organizational Behavior: Chapter 17 5
  6. 6. Study Question 1: What is strategy andhow is it linked to different types oforganizational goals? Societal contributions and mission statements. – A firm’s societal contribution is often part of its mission statement. • A written statement of organizational purpose. – A good mission statement identifies whom the firm will serve and how it will go about accomplishing its societal purpose. Organizational Behavior: Chapter 17 6
  7. 7. Study Question 1: What is strategy andhow is it linked to different types oforganizational goals? Output goals. – Define the type of business the organization is pursuing. – Provide some substance to the more general aspects of mission statements. Organizational Behavior: Chapter 17 7
  8. 8. Study Question 1: What is strategy andhow is it linked to different types oforganizational goals? Systems goals. – Concerned with the conditions within the organization that are expected to increase the organization’s survival potential. – Typical systems goals include growth, productivity, stability, harmony, flexibility, prestige, and human resource maintenance. – Systems goals must often be balanced against one another. Organizational Behavior: Chapter 17 8
  9. 9. Study Question 1: What is strategy andhow is it linked to different types oforganizational goals? Well-defined systems goals can: – Focus managers’ attention on what needs to be done. – Provide flexibility in devising ways to meet important targets. – Be used to balance the demands, constraints, and opportunities facing the firm. – Form a basis for dividing the work of the firm. Organizational Behavior: Chapter 17 9
  10. 10. Study Question 2: What are the basicattributes of organizations? Successful organizations develop a structure consistent with the pattern of goals established by senior management. The formal structure shows the planned configuration of positions, job duties, and the lines of authority among different parts of the organization. The formal structure of the firm is also known as the division of labor. Organizational Behavior: Chapter 17 10
  11. 11. Study Question 2: What are the basicattributes of organizations? Vertical specialization. – A hierarchical division of labor that distributes formal authority and establishes where and how critical decisions are to be made. – Creates a hierarchy of authority. • An arrangement of work positions in order of increasing authority. – Organization charts are diagrams that depict the formal structures of organizations. Organizational Behavior: Chapter 17 11
  12. 12. Study Question 2: What are the basicattributes of organizations? Organizational Behavior: Chapter 17 12
  13. 13. Study Question 2: What are the basicattributes of organizations? Chain of command. – A listing of who reports to whom up and down the organization. Unity of command. – Each person has only one boss and each unit one leader. Span of control. – The number individuals reporting to a supervisor. Organizational Behavior: Chapter 17 13
  14. 14. Study Question 2: What are the basicattributes of organizations? Line units. – Work groups that conduct the major business of the organization. Staff units. – Work groups that assist the line units by providing specialized expertise and services to the organization. Organizational Behavior: Chapter 17 14
  15. 15. Study Question 2: What are the basicattributes of organizations? Internal versus external units. – Internal line units. • Transform raw materials and information into products and services. – External line units. • Maintain outside linkages. – Internal staff units. • Assist the line units in performing their functions. – External staff units. • Assist the line units with outside linkages and act to buffer internal operations. Organizational Behavior: Chapter 17 15
  16. 16. Study Question 2: What are the basicattributes of organizations? Organizational Behavior: Chapter 17 16
  17. 17. Study Question 2: What are the basicattributes of organizations? Some firms are outsourcing many of their staff functions. Use of information technology to streamline operations and reduce staff. Most organizations use a variety of means to specialize the vertical division of labor. Best pattern of vertical specialization depends on environment, size, technology, and goals. Organizational Behavior: Chapter 17 17
  18. 18. Study Question 2: What are the basicattributes of organizations? Control. – The set of mechanisms used to keep actions or outputs within predetermined limits. – Deals with: • Setting standards. • Measuring results against standards. • Instituting corrective action. Organizational Behavior: Chapter 17 18
  19. 19. Study Question 2: What are the basicattributes of organizations? Output controls. – Focus on desired targets and allow managers to use their own methods to reach defined targets. – Part of overall method of managing by exception. – Promote flexibility and creativity. Organizational Behavior: Chapter 17 19
  20. 20. Study Question 2: What are the basicattributes of organizations? Process controls. – Specify the manner in which tasks are accomplished. – Types of process controls. • Policies, procedures, and rules. • Formalization and standardization. • Total quality management controls. Organizational Behavior: Chapter 17 20
  21. 21. Study Question 2: What are the basicattributes of organizations? Policies, procedures, and rules. – Policies. • Guidelines for action that outline important objectives and broadly indicate how activities are to be carried out. – Procedures. • Identify the best method for performing a task, show which aspects of a task are most important, or outline how an individual is to be rewarded. Organizational Behavior: Chapter 17 21
  22. 22. Study Question 2: What are the basicattributes of organizations? Policies, procedures, and rules (cont.). – Rules. • Describe in detail how a task or a series of tasks is to be performed, or indicate what cannot be done. – Policies, procedures, and rules are often used as substitutes for direct managerial supervision. Organizational Behavior: Chapter 17 22
  23. 23. Study Question 2: What are the basicattributes of organizations? Formalization. – The written documentation of policies, procedures, and rules to guide behavior and decision making. Standardization. – The degree to which the range of allowable actions in a job or series of jobs is limited so that uniform actions occur. Organizational Behavior: Chapter 17 23
  24. 24. Study Question 2: What are the basicattributes of organizations? Deming’s 14 points for achieving total quality management. – Create a consistency of purpose in the company to innovate; put resources into research and education, and into maintaining equipment and new production aids. – Learn a new philosophy of quality to improve every system. – Require statistical evidence of process control and eliminate financial controls on production. Organizational Behavior: Chapter 17 24
  25. 25. Study Question 2: What are the basicattributes of organizations? Deming’s 14 points for achieving total quality management (cont.). – Require statistical evidence of control in purchasing parts. – Use statistical methods to isolate the sources of trouble. – Institute modern on-the-job training. – Improve supervision to develop inspired leaders. – Drive out fear and instill learning. – Break down barriers between departments. Organizational Behavior: Chapter 17 25
  26. 26. Study Question 2: What are the basicattributes of organizations? Deming’s 14 points for achieving total quality management (cont.). – Eliminate numerical goals and slogans. – Constantly revamp work methods. – Institute massive training programs for employees in statistical methods. – Retrain people in new skills. – Create a structure that will push, every day, on the above 13 points. Organizational Behavior: Chapter 17 26
  27. 27. Study Question 2: What are the basicattributes of organizations? Centralization and decentralization. – Centralization. • Degree to which the authority to make decisions is restricted to higher levels of management. – Decentralization. • Degree to which the authority to make decisions is given to lower levels in an organization’s hierarchy. Organizational Behavior: Chapter 17 27
  28. 28. Study Question 2: What are the basicattributes of organizations? Benefits of decentralization. – Higher subordinate satisfaction. – Quicker response to a series of unrelated problems. – Assists in on-the-job training of subordinates for higher-level positions – Encourages participation in decision making. Organizational Behavior: Chapter 17 28
  29. 29. Study Question 3: How is workorganized and coordinated? Horizontal specialization. – A division of labor that establishes specific work units or groups within an organization. – Often referred to as departmentation. – Whenever managers divide tasks and group similar types of skills and resources together, they must also be concerned with coordination. Organizational Behavior: Chapter 17 29
  30. 30. Study Question 3: How is workorganized and coordinated? Organizational Behavior: Chapter 17 30
  31. 31. Study Question 3: How is workorganized and coordinated? Organizational Behavior: Chapter 17 31
  32. 32. Study Question 3: How is workorganized and coordinated? Organizational Behavior: Chapter 17 32
  33. 33. Study Question 3: How is workorganized and coordinated? Coordination. – The set of mechanisms that an organization uses to link the actions of its units into a consistent pattern. – Within a unit, much of the coordination is handled by its manager. – Smaller organizations rely on management hierarchy for coordination. – As the organization grows, more efficient and effective methods of coordination are required. Organizational Behavior: Chapter 17 33
  34. 34. Study Question 3: How is workorganized and coordinated? Personal methods of coordination. – Produce synergy by promoting dialogue, discussion, innovation, creativity, and learning, both within and across units. – Common personal methods of coordination are direct contact between and among organizational members and committee memberships. – Mix of personal coordination methods should be tailored to subordinates, skills, abilities, and experiences. Organizational Behavior: Chapter 17 34
  35. 35. Study Question 3: How is workorganized and coordinated? Impersonal methods of coordination. – Produce synergy by stressing consistency and standardization so that individual pieces fit together. – Often are refinements and extensions of process controls. – Historical use of specialized departments to coordinate across units. – Contemporary use of matrix departmentation and management information systems for coordination. Organizational Behavior: Chapter 17 35
  36. 36. Study Question 4: What are bureaucracies andwhat are the common structures? Bureaucracy. – An ideal form of organization, the characteristics of which were defined by the German sociologist Max Weber. – Relies on a division of labor, hierarchical control, promotion by merit with career opportunities for employees, and administration by rule. Organizational Behavior: Chapter 17 36
  37. 37. Study Question 4: What are bureaucracies andwhat are the common structures? Organizational Behavior: Chapter 17 37
  38. 38. Study Question 4: What are bureaucracies andwhat are the common structures? Mechanistic type of bureaucracy (machine bureaucracy). – Emphasizes vertical specialization and control. – Stresses rules, policies, and procedures; specifies techniques for decision making; and use well-documented control systems. – Often used with a low cost leader strategy. Organizational Behavior: Chapter 17 38
  39. 39. Study Question 4: What are bureaucracies andwhat are the common structures? Benefits of the mechanistic type. – Efficiency. Limitations of the mechanistic type. – Employees dislike rigid designs, which makes work motivation problematic. – Unions may further solidify rigid designs. – Key employees may leave. – Hinders organization’s capacity to adjust to subtle environmental changes or new technologies. Organizational Behavior: Chapter 17 39
  40. 40. Study Question 4: What are bureaucracies andwhat are the common structures? Organic type of bureaucracy (professional bureaucracy). – Horizontal specialization. – Procedures are minimal, and those that do exist are not highly formalized. – Used to pursue strategies that emphasize product quality, quick response to customers, or innovation. Organizational Behavior: Chapter 17 40
  41. 41. Study Question 4: What are bureaucracies andwhat are the common structures? Benefits of the organic type. – Good for problem solving and serving individual customer needs. – Centralized direction by senior management is less intense. – Good at detecting external changes and adjusting to new technologies. Limitations of the organic type. – Less efficient than mechanistic type. – Restricted capacity to respond to central management direction. Organizational Behavior: Chapter 17 41
  42. 42. Study Question 4: What are bureaucracies andwhat are the common structures? Common types of hybrid structures. – Divisional firm. • Composed of quasi-independent divisions so that different divisions can be more or less organic or mechanistic. – Conglomerate. • A single corporation that contains a number of unrelated businesses. Organizational Behavior: Chapter 17 42
  43. 43. Study Question 4: What are bureaucracies andwhat are the common structures? The conglomerate simultaneously illustrates three key points that will be the focus of Chapter 18. – All structures are combinations of the basic elements. – There is no one best structure. – The firm does not stand alone but is part of a larger network of firms that compete against other networks. Organizational Behavior: Chapter 17 43
  44. 44. COPYRIGHTCopyright 2005 © John Wiley & Sons, Inc. All rights reserved.Reproduction or translation of this work beyond that permitted in Section117 of the 1976 United States Copyright Act without the express writtenpermission of the copyright owner is unlawful. Request for furtherinformation should be addressed to the Permissions Department, John Wiley& Sons, Inc. The purchaser may make back-up copies for his/her own useonly and not for distribution or resale. The Publisher assumes noresponsibility for errors, omissions, or damages, caused by the use of theseprograms or from the use of the information contained herein. Organizational Behavior: Chapter 17 44

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