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Managing Organizational Structure and Culture Chapter 10.

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Presentation on theme: "Managing Organizational Structure and Culture Chapter 10."— Presentation transcript:

1 Managing Organizational Structure and Culture Chapter 10

2 Organizational Structure Organizational Architecture: The organizational structure, control systems, culture, and human resource management systems that together determine how efficiently and effectively organizational resources are used. Organizing: The process by which managers establish working relationships among employees to achieve goals. Organizational Structure: The formal system of task and reporting relationships that coordinates and motivates organizational members so they work together to achieve organizational goals.

3 Factors Affecting Organizational Structure

4 Designing Organizational Structure The way an organization’s structure works depends on the choices managers make about: 1.How to group tasks into individual jobs 2.How to group jobs into functions and divisions 3.How to allocate authority and coordinate functions and divisions

5 How would you arrange your Soldiers (Employees)?

6 Organizational Structure Work Specialization The degree to which tasks in the organization are divided into separate jobs with each step completed by a different person. Overspecialization can result in human diseconomies such as boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnover. This was the key to the Industrial Revolution and is still a major component of Job Design.

7 Economies and Diseconomies of Work Specialization

8 Assembly Lines Benefits & Problems Are these the jobs that we should be attracting?

9 Job Design: The process by which managers decide how to divide tasks into specific jobs. The appropriate division of labor results in an effective and efficient workforce. Job Simplification: The process of reducing the number of tasks that each worker performs. Job Enlargement: Increasing the number of different tasks in a given job by changing the division of labor Job Enrichment: Increasing the degree of responsibility a worker has over a job

10 Job Enrichment 1.Empowering workers to experiment to find new or better ways of doing the job 2.Encouraging workers to develop new skills 3.Allowing workers to decide how to do the work 4.Allowing workers to monitor and measure their own performance

11 The Job Characteristics Model

12 Grouping Jobs into Functions Functional Structure: An organizational structure composed of all the departments that an organization requires to produce its goods or services. Advantages Encourages learning from others doing similar jobs. Easy for managers to monitor and evaluate workers. Disadvantages Difficult for departments to communicate with others. Preoccupation with own department and losing sight of organizational goals.

13 Divisional Structures Divisional Structure: An organizational structure composed of separate business units within which are the functions that work together to produce a specific product for a specific customer. Product, market, geographic Advantages Allows for greater focus on product, market or geography. Quicker response times to needs. Disadvantages Duplication of functions. Feelings of isolation CEO R & DProduction Human Resources Marketing Customer Service Financial

14 Product, Market, and Geographic Structures

15 Types of Divisional Structures Product Structure Managers place each distinct product line or business in its own self- contained division Divisional managers have the responsibility for devising an appropriate business-level strategy to allow the division to compete effectively in its industry or market Market (Customer) Structure Groups divisions according to the particular kinds of customers they serve Allows managers to be responsive to the needs of their customers and act flexibly in making decisions in response to customers’ changing needs

16 Types of Divisional Structures Geographic Structure Divisions are broken down by geographic location Global geographic structure Managers locate different divisions in each of the world regions where the organization operates. Generally, occurs when managers are pursuing a multi-domestic strategy CEO Northern Region Southern Region Eastern Region Western Region International Mexico Canada

17 Matrix Design Structure An organizational structure that simultaneously groups people and resources by function and product. The structure is very flexible and can respond rapidly to the need for change. Each employee has two bosses Violates the chain of command

18 Matrix Structure

19 Product Team Design Structure Product Team Structure Structure in which employees are permanently assigned to a cross-functional team and report only to the product team manager or to one of his direct subordinates Does away with dual reporting relationships and two-boss managers Cross-functional team A group of managers brought together from different departments to perform organizational tasks.

20 Product Team Structure

21 Allocating Authority Authority power to hold people accountable for their actions and to make decisions concerning the use of organizational resources. Hierarchy of authority An organization’s chain of command, specifying the relative authority of each manager.

22 Allocating Authority Line Manager Someone in the direct line or chain of command who has formal authority over people and resources at lower levels Staff Manager Someone responsible for managing a specialist function, such as finance or marketing.

23 Tall and Flat Organizations Tall structures have many levels of authority and narrow spans of control. As hierarchy levels increase, communication gets difficult creating delays in the time being taken to implement decisions. Communications can also become distorted as it is repeated through the firm. Can become expensive

24 Tall and Flat Organizations Flat structures have fewer levels and wide spans of control. Structure results in quick communications but can lead to overworked managers.

25 Centralization and Decentralization of Authority Decentralizing authority giving lower-level managers and non-managerial employees the right to make important decisions about how to use organizational resources

26 Empowered & Resourceful Types of Employees: 1.Rogue Employees 2.Disenfranchised Employees 3.Locked-Down Employees 4.HERO’s

27 Integrating Mechanisms

28 Organizational Culture Organizational culture The shared set of beliefs, expectations, values, and norms that influence how members of an organization relate to one another and cooperate to achieve organizational goals. Organizational ethics The moral values, beliefs, and rules that establish the appropriate way for an organization and its members to deal with each other and with people outside the organization.

29 The Iceberg Analogy

30 Sources of an Organization’s Culture

31 Founders and Organizational Culture: Two Examples

32 Strong, Adaptive Cultures Versus Weak, Inert Cultures Adaptive cultures values and norms help an organization to build momentum and to grow and change as needed to achieve its goals and be effective Inert cultures Those that lead to values and norms that fail to motivate or inspire employees Lead to stagnation and often failure over time Companies should adapt culture to the environment!

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