Organizational Structure and Design10.ppt

PowerPointPresentationbyCharlieCookCopyright 2005PrenticeHall Inc Allrightsreserved Copyright 2005PrenticeHall Inc Allrightsreserved 10 2 LEARNINGOUTLINEFollowthisLearningOutlineasyoureadandstudythischapter DefiningOrganizationalStructureDiscussthetraditionalandcontemporaryviewofworkspecialization Describeeachofthefiveformsofdepartmentalization Explaincross functionalteams Differentiatechainofcommand authority responsibility andunityofcommand Discussthetraditionalandcontemporaryviewsofchainofcommand Discussthetraditionalandcontemporaryviewsofspanofcontrol Copyright 2005PrenticeHall Inc Allrightsreserved 10 3 LEARNINGOUTLINE cont d FollowthisLearningOutlineasyoureadandstudythischapter DefiningOrganizationalStructure cont d Tellwhatfactorsinfluencetheamountofcentralizationanddecentralization Explainhowformalizationisusedinorganizationaldesign OrganizationalDesignDecisionsContrastmechanisticandorganicorganizations Explaintherelationshipbetweenstrategyandstructure Tellhoworganizationalsizeaffectsorganizationaldesign DiscussWoodward sfindingsintherelationshipoftechnologyandstructure Explainhowenvironmentaluncertaintyaffectorganizationaldesign Copyright 2005PrenticeHall Inc Allrightsreserved 10 4 LEARNINGOUTLINE cont d FollowthisLearningOutlineasyoureadandstudythischapter CommonOrganizationalDesignsContrastthethreetraditionalorganizationaldesigns Explainteam based matrix andprojectstructures Discussthedesignofvirtual network andmodularorganizations Describethecharacteristicsofalearningorganization Copyright 2005PrenticeHall Inc Allrightsreserved 10 5 DefiningOrganizationalStructure OrganizationalStructureTheformalarrangementofjobswithinanorganization OrganizationalDesignAprocessinvolvingdecisionsaboutsixkeyelements WorkspecializationDepartmentalizationChainofcommandSpanofcontrolCentralizationanddecentralizationFormalization Copyright 2005PrenticeHall Inc Allrightsreserved 10 6 OrganizationalStructure WorkSpecializationThedegreetowhichtasksintheorganizationaredividedintoseparatejobswitheachstepcompletedbyadifferentperson Overspecializationcanresultinhumandiseconomiesfromboredom fatigue stress poorquality increasedabsenteeism andhigherturnover Copyright 2005PrenticeHall Inc Allrightsreserved 10 7 DepartmentalizationbyType FunctionalGroupingjobsbyfunctionsperformedProductGroupingjobsbyproductlineGeographicGroupingjobsonthebasisofterritoryorgeography ProcessGroupingjobsonthebasisofproductorcustomerflowCustomerGroupingjobsbytypeofcustomerandneeds Copyright 2005PrenticeHall Inc Allrightsreserved 10 8 OrganizationStructure cont d ChainofCommandThecontinuouslineofauthoritythatextendsfromupperlevelsofanorganizationtothelowestlevelsoftheorganizationandclarifieswhoreportstowho Copyright 2005PrenticeHall Inc Allrightsreserved 10 9 OrganizationStructure cont d AuthorityTherightsinherentinamanagerialpositiontotellpeoplewhattodoandtoexpectthemtodoit ResponsibilityTheobligationorexpectationtoperform UnityofCommandTheconceptthatapersonshouldhaveonebossandshouldreportonlytothatperson Copyright 2005PrenticeHall Inc Allrightsreserved 10 10 OrganizationStructure cont d SpanofControlThenumberofemployeeswhocanbeeffectivelyandefficientlysupervisedbyamanager Widthofspanaffectedby SkillsandabilitiesofthemanagerEmployeecharacteristicsCharacteristicsoftheworkbeingdoneSimilarityoftasksComplexityoftasksPhysicalproximityofsubordinatesStandardizationoftasks Copyright 2005PrenticeHall Inc Allrightsreserved 10 11 OrganizationStructure cont d CentralizationThedegreetowhichdecision makingisconcentratedatasinglepointintheorganizations Organizationsinwhichtopmanagersmakeallthedecisionsandlower levelemployeessimplycarryoutthoseorders DecentralizationOrganizationsinwhichdecision makingispusheddowntothemanagerswhoareclosesttotheaction EmployeeEmpowermentIncreasingthedecision making Copyright 2005PrenticeHall Inc Allrightsreserved 10 12 OrganizationStructure cont d FormalizationThedegreetowhichjobswithintheorganizationarestandardizedandtheextenttowhichemployeebehaviorisguidedbyrulesandprocedures Highlyformalizedjobsofferlittlediscretionoverwhatistobedone Lowformalizationmeansfewerconstraintsonhowemployeesdotheirwork Copyright 2005PrenticeHall Inc Allrightsreserved 10 13 OrganizationalDesignDecisions MechanisticOrganizationArigidandtightlycontrolledstructureHighspecializationRigiddepartmentalizationNarrowspansofcontrolHighformalizationLimitedinformationnetwork downward Lowdecisionparticipation OrganicOrganizationHighlyflexibleandadaptablestructureNon standardizedjobsFluidteam basedstructureLittledirectsupervisionMinimalformalrulesOpencommunicationnetworkEmpoweredemployees Copyright 2005PrenticeHall Inc Allrightsreserved 10 14 StructuralContingencyFactors Structuraldecisionsareinfluencedby OverallstrategyoftheorganizationOrganizationalstructurefollowsstrategy SizeoftheorganizationFirmschangefromorganictomechanisticorganizationsastheygrowinsize TechnologyusebytheorganizationFirmsadapttheirstructuretothetechnologytheyuse DegreeofenvironmentaluncertaintyDynamicenvironmentsrequireorganicstructures mechanisticstructuresneedstableenvironments Copyright 2005PrenticeHall Inc Allrightsreserved 10 15 StructuralContingencyFactors cont d StrategyFrameworks InnovationPursuingcompetitiveadvantagethroughmeaningfulanduniqueinnovationsfavorsanorganicstructuring CostminimizationFocusingontightlycontrollingcostsrequiresamechanisticstructurefortheorganization ImitationMinimizingrisksandmaximizingprofitabilitybycopyingmarketleadersrequiresbothorganicandmechanisticelementsintheorganization sstructure Copyright 2005PrenticeHall Inc Allrightsreserved 10 16 StructuralContingencyFactors cont d StrategyandStructureAchievementofstrategicgoalsisfacilitatedbychangesinorganizationalstructurethataccommodateandsupportchange SizeandStructureAsanorganizationgrowslarger itsstructuretendstochangefromorganictomechanisticwithincreasedspecialization departmentalization centralization andrulesandregulations Copyright 2005PrenticeHall Inc Allrightsreserved 10 17 StructuralContingencyFactors cont d TechnologyandStructureOrganizationsadapttheirstructurestotheirtechnology Woodward sclassificationoffirmsbasedinthecomplexityofthetechnologyemployed UnitproductionofsingleunitsorsmallbatchesMassproductionoflargebatchesofoutputProcessproductionincontinuousprocessofoutputsRoutinetechnology mechanisticorganizationsNon routinetechnology organicorganizations Copyright 2005PrenticeHall Inc Allrightsreserved 10 18 StructuralContingencyFactors cont d EnvironmentalUncertaintyandStructureMechanisticorganizationalstructurestendtobemosteffectiveinstableandsimpleenvironments Theflexibilityoforganicorganizationalstructuresisbettersuitedfordynamicandcomplexenvironments Copyright 2005PrenticeHall Inc Allrightsreserved 10 19 CommonOrganizationalDesigns TraditionalDesignsSimplestructureFunctionalstructureDivisionalstructure Copyright 2005PrenticeHall Inc Allrightsreserved 10 20 OrganizationalDesigns TraditionalDesignsSimplestructureLowdepartmentalization widespansofcontrol centralizedauthority littleformalizationFunctionalstructureDepartmentalizationbyfunctionOperations finance humanresources andproductresearchanddevelopmentDivisionalstructureComposedofseparatebusinessunitsordivisionswithlimitedautonomyunderthecoordinationandcontroltheparentcorporation Copyright 2005PrenticeHall Inc Allrightsreserved 10 21 OrganizationalDesigns cont d ContemporaryOrganizationalDesignsTeamstructuresTheentireorganizationismadeupofworkgroupsorself managedteamsofempoweredemployees MatrixandprojectstructuresSpecialistsfordifferentfunctionaldepartmentsareassignedtoworkonprojectsledbyprojectmanagers Matrixparticipantshavetwomanagers ProjectstructuresEmployeesworkcontinuouslyonprojects movingontoanotherprojectaseachprojectiscompleted Copyright 2005PrenticeHall Inc Allrightsreserved 10 22 OrganizationalDesigns cont d ContemporaryOrganizationalDesigns cont d BoundarylessOrganizationAnflexibleandunstructuredorganizationaldesignthatisintendedtobreakdownexternalbarriersbetweentheorganizationanditscustomersandsuppliers Removesinternal horizontal boundariesEliminatesthechainofcommandHaslimitlessspansofcontrolUsesempoweredteamsratherthandepartmentsEliminatesexternalboundariesUsesvirtual network andmodularorganizationalstructurestogetclosertostakeholders Copyright 2005PrenticeHall Inc Allrightsreserved 10 23 Remov