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16-1©2005 Prentice Hall 13 Organizational Design and Structure Chapter 13 Organizational Design and Structure
16-2 ©2005 Prentice Hall Chapter Objectives Understand the relationship between organizational design and an organization’s structure Explain the main contingencies affecting the process of organizational design and differentiate between a mechanistic and an organic structure
16-3 ©2005 Prentice Hall Chapter Objectives Cite the advantages of grouping people into functions and divisions and distinguish between the main forms of organizational structure from which an organization can choose Explain why coordination becomes a problem with the growth of an organization and differentiate between the three main methods it can use to overcome this problem and link its functions and divisions
16-4 ©2005 Prentice Hall Chapter Objectives Gain an understanding of the enormous impact modern information technology has had on the process of organizational design and structure both inside organizations and between them
16-5 ©2005 Prentice Hall Opening Case: A New Approach to Organizing at Sun Life Why did Sun Life Change Its Structure? Rigid and bureaucratic structure Customer response too slow Reorganization into series of cross- functional product teams
16-6 ©2005 Prentice Hall Designing Organizational Structure Organizational Structure: Formal system of task and job reporting relationships Organizational Design: Arrangement of tasks and job relationships that comprise the organizational structure
16-7 ©2005 Prentice Hall Figure 16.1 Contingencies Affecting Organizational Design Organizational Design Organization’s Environment HR and Employment Relationships Organization’s Technology
16-8 ©2005 Prentice Hall Routine vs Complicated Technology Task Variety Task Analyzability
16-9 ©2005 Prentice Hall Kinds of Technology Small- Batch Continuous- Process Mass- Production
16-10 ©2005 Prentice Hall Small Batch Production
16-11 ©2005 Prentice Hall Organic and Mechanistic Structures Organic Dynamic, flexible Empowered teams Continuous improvement Norms and values Mechanistic Formal, controlling Centralized decision- making Clearly defined tasks Rules and regulations
16-12 ©2005 Prentice Hall The Functional Structure Advantages Coordination Communication Skill Improvement Motivation Controlling Disadvantages Limited growth under existing structure Limits to number of products and services Coordination difficulties at larger size
16-13 ©2005 Prentice Hall Figure 16.2 Dell’s Functional Structure CEO Michael Dell ManufacturingSales Product Development Customer Service
16-14 ©2005 Prentice Hall Divisional Structures Product Market Geographic
16-15 ©2005 Prentice Hall Figure 16.3 Product Structure
16-16 ©2005 Prentice Hall Figure 16.3 Market Structure
16-17 ©2005 Prentice Hall Figure 16.3 Geographic Structure
16-18 ©2005 Prentice Hall The Divisional Structure Advantages As size and complexity of organization increases, –Coordination –Communication –Motivation –Autonomy Disadvantages Increased costs Duplication of functions Miscommunication across divisions Competition for resources Conflict
16-19 ©2005 Prentice Hall The Matrix Structure Complex network of reporting relationships among product teams and functions People and resources grouped by –Function –Product
16-20 ©2005 Prentice Hall Figure 16.4 A Matrix Structure
16-21 ©2005 Prentice Hall The Matrix Structure Advantages Coordination Fast new product development Communication Cooperation Innovation Creativity Autonomy Disadvantages Role conflict Role ambiguity Stress Unclear individual contributions to team performance
16-22 ©2005 Prentice Hall Techniques for Enhancing Coordination Allocation of Authority Mutual Adjustment and Integrating Mechanisms Standardization
16-23 ©2005 Prentice Hall Allocation of Authority Span of control Tall and Flat Hierarchies Chain of Command Centralization versus Decentralization
16-24 ©2005 Prentice Hall Figure 16.5 A Wide Span of Control
16-25 ©2005 Prentice Hall Figure 16.5 A Narrow Span of Control
16-26 ©2005 Prentice Hall Figure 16.6 Flat Organizational Structure
16-27 ©2005 Prentice Hall Figure 16.6 Tall Organizational Structure
16-28 ©2005 Prentice Hall Mutual Adjustment and Integrating Mechanisms Direct contact Liaison roles Teams and task forces Cross-functional teams
16-29 ©2005 Prentice Hall Figure 16.7 Using a Team to Increase Coordination
16-30 ©2005 Prentice Hall Figure 16.8 A Cross-Functional Team Structure
16-31 ©2005 Prentice Hall Cross-functional Team Structure at Chrysler
16-32 ©2005 Prentice Hall Standardization Standardizing inputs Standardizing conversion processes –Formalization Standardizing outputs
16-33 ©2005 Prentice Hall The Effects of IT Virtual Organizations Network Structure
Alter – Information Systems 4th e d. © 2002 Prentice Hall 1 Moving Towards E-Business As Usual.
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