Presentation on theme: "Chapter 14 Foundations of Organizational Structure"— Presentation transcript:
1 Chapter 14 Foundations of Organizational Structure Essentials ofOrganizational Behavior, 10/eStephen P. Robbins & Timothy A. JudgeChapter 14Foundations of Organizational Structure
2 After studying this chapter, you should be able to: Identify the six elements of an organization’s structure.Describe the common organizational designs.Compare and contrast the virtual and boundaryless organizations.Demonstrate how organizational structures differ.Analyze the behavioral implications of different organizational designs.Show how globalization affects organizational structure.
3 What is Organization Structure? It defines how job tasks are formally divided, grouped, and coordinatedKey elements to be addressed:Work specializationDepartmentalizationChain of commandSpan of controlCentralizationDecentralizationFormalization
4 Element 1: Work Specialization Also known as division of laborDescribes the degree to which activities in the organization are subdivided into separate jobsBenefits:Greater efficiency and lower costsCosts:Human costs when carried too farJob enlargement as a solution
5 Element 2: Departmentalization Basis by which jobs are grouped together so that common tasks can be coordinatedCommon bases:FunctionProductGeographyProcessCustomer
6 Element 3: Chain of Command Unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whomAuthority: positional rightsUnity of Command principle: one bossFewer organizations find this is relevant
7 Element 4: Span of Control The number of employees a manager is expected to effectively and efficiently directDetermines the number of levels and managers an organization hasTrend is toward wider spans of controlWider span depends on knowledgeable employeesAffects speed of communication and decision making
8 Element 5: Centralization and Decentralization Centralization - degree to which decision making is concentrated at a single point in the organizationOnly includes formal authority: positional rightsHighly centralized when top managers make all the decisionsDecentralized when front line employees and supervisors make decisionsTrend is toward increased decentralization
9 Element 6: Formalization Degree to which jobs within the organization are standardizedFormal = minimum discretion over what is to be done, when it is done, and howInformal = freedom to act is necessary
10 Common Organizational Designs Simple structureBureaucracyMatrix structure
11 Simple Structure Low degree of departmentalization Wide spans of controlAuthority centralized in a single personLittle formalizationDifficult to maintain in anything other than small organizations
12 BureaucracyHighly routine operating tasks achieved through specializationFormal rules and regulationsCentralized authorityNarrow spans of controlTasks grouped by functional departmentsDecision making follows the chain of command
13 Matrix Structure Combines two forms of departmentalization FunctionalProductDual chain of commandAdvantages:Facilitates coordination and efficient allocation of specialistsDisadvantages:Possible confusion, fosters power struggles, stress
14 Matrix Structure for a College of Business Administration
15 New Design Options The Virtual Organization A small core organization that outsources major business functionsAlso known as a network or modular organizationThe Boundaryless OrganizationEliminates vertical and horizontal boundariesRemoves exterior barriersRelies heavily on technologyCustomersWorkersSuppliers
17 The Four Forces that Influence Structure StrategyInnovation – introduce new offerings - organicCost-Minimization – cost control - mechanisticImitation – minimal risk and maximum profit - bothOrganization SizeBigger becomes mechanisticTechnologyRoutine equals mechanistic, nonroutine is organicEnvironmentDynamic environments lead to organic structures
18 Organizational Designs and Employee Behavior Cannot generalize any link between structure and performanceToo much individual varianceConsider employee preferences for:Work SpecializationSpan of ControlCentralization
19 Global Implications Culture and Organizational Structure: Insufficient research at this pointCulture and Employee Structure Preferences:National culture does influenceHigh power distance cultures accept mechanistic structureCulture and the Boundaryless Organization:Natural avenue for modern global companies
20 Implications for Managers Structural relationships impact attitude and behaviorStructure constrains employee behaviors
21 Keep in Mind…As tasks become more complex and required skills more diverse, more use of cross-functional teamsSimple structures are easy to create but difficult to growExternal boundaries can be reduced through globalization, strategic alliances, customer-organizational links, and telecommuting
22 Summary Identified the six elements of an organization’s structure. Described the common organizational designs.Compared and contrasted the virtual and boundaryless organizations.Demonstrated how organizational structures differed.Analyzed the behavioral implications of different organizational designs.Showed how globalization affects organizational structure.
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