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Trends in Organizational Structures Unit 5: Organizing.

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1 Trends in Organizational Structures Unit 5: Organizing

2 Current Organizational Structures  The realities of today’s global economy demand that competitive businesses must have organizational structures that are flexible and allow people to solve problems quickly  The matrix structure, introduced in Activity 1, is a first step toward improving flexibility and getting people to work together in cross- functional teams  Matrix structures are now part of a trend in organizational structures toward less hierarchy and more empowerment of employees  Information technology facilitates the new organizational structures  These new structures include:  team structures, network structures, boundaryless organizations, and virtual organizations

3 Team Structure  In a team structure, both permanent and temporary cross-functional teams are used to solve problems, complete special projects, and accomplish day-to-day tasks  A matrix structure is one example of a team structure  Careful and thoughtful formation of teams is critical in this type of a structure  It is not enough to simply call an existing group “a team”

4 Network Structure  In a network structure, businesses concentrate on their strengths and work with outside suppliers and business partners for the other necessary functions  Commonly outsourced functions include cleaning, accounting, and legal services  A strategic alliance or joint venture occurs when two or more organizations join together to pursue an area of mutual interest  For example, three businesses decide to share the development costs of a specialized piece of equipment or software application that they all need  Together, they hire another business to create this equipment or application

5 Boundaryless Structure  The boundaryless organization is a model that views organizations as having permeable boundaries  The goal is to develop greater flexibility and responsiveness to change and to facilitate the free exchange of information and ideas  Characterized by the absence of hierarchy, empowerment of team members, the use of information technology, spontaneous sharing of knowledge, and acceptance of change  Example: The Virtual Team

6 The Virtual Team  A virtual team is a group of people who work interdependently with a shared purpose across space, time, and organization boundaries using technology  What makes virtual teams historically new is the awesome array of interactive technologies at their disposal  Webs of technology and trust link virtual teams

7 Organizational Design  Organizational Design - refers to the decisions made by management, and the structures created by management, to carry out the organization’s mission and objectives  Organizations vary widely not only in terms of size, but also in terms of the problems and opportunities they face  In some cases, traditional organizational structures may work best; in others, a network structure may work better  Organizations need to be able to change their structure as necessary, to best meet the demands of their current situation

8 Trends in Organizational Design Structures 1. Shorter Chain of Command – fewer layers of management 2. Increased Delegation of Empowerment - Progressive managers entrust work to their employees along with the authority to take necessary actions 3. Decentralization - Decisions are made throughout all organizational levels, not only at the top level 4. Organic Structure instead of Mechanistic Structure - In an organic structure, it is common for all of the employees to be able to handle most, if not all, of the tasks  Employees in a mechanistic structure have assigned duties that they must perform and are not permitted to take on additional duties unless they are told so by management

9 Your Task  Answer the following questions independently:  Which type of organizational structure appeals to you most?  Would you prefer to work in a traditional structure, team structure, boundaryless organization, or virtual team?  Which organizational structure would suit your personality, skills and goals? Why?  Next you will form groups to discuss

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