Presentation is loading. Please wait.

Presentation is loading. Please wait.

Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Organizational Structure Chapter Twelve Ed Kaiser/Edmonton Journal.

Similar presentations


Presentation on theme: "Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Organizational Structure Chapter Twelve Ed Kaiser/Edmonton Journal."— Presentation transcript:

1 Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Organizational Structure Chapter Twelve Ed Kaiser/Edmonton Journal

2 12-2 Organizational Structure Division of labor and patterns of coordination, communication, workflow, and formal power that direct organizational activities. Division of labor  Subdivision of work into separate jobs assigned to different people  Potentially increases work efficiency  Necessary as company grows and work becomes more complex Ed Kaiser/Edmonton Journal

3 12-3 Forms of Work Coordination Informal communication  Sharing information  High media-richness  Important in teams Formal hierarchy  Direct supervision  Assigns formal (legitimate) power to manage others  Coordination strategy for departmentalization Standardization  Processes -- formal instructions  Outputs -- clear goals/output measures  Skills -- training, learn precise role behaviors

4 12-4 Organizational Structure Elements Span of Control Centralization Department- alization Formalization Elements of Organizational Structure

5 Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Span of Control, Centralization, and Formalization Organizational Structure

6 12-6 Span of Control Number of people directly reporting to the next level  Assumes coordination through direct supervision Wider span of control possible with other coordinating mechanisms present

7 12-7 Tall vs Flat Structures As companies grow, they:  Build taller hierarchy  Widen span, or both Problems with tall hierarchies  Overhead costs  Poorer upward information  Focus power around managers, so staff less empowered

8 12-8 Trend Toward Flatter Structures Firms moving toward flatter structures (delayering)  Cuts costs  Puts decision makers closer to front-line information  Supports empowerment Problem: risk of cutting too much middle management

9 12-9 Formal decision making authority is held by a few people, usually at the top Centralization Decision making authority is dispersed throughout the organization Decentralization Centralization and Decentralization

10 12-10 Formalization The degree to which organizations standardize behavior through rules, procedures, formal training, and related mechanisms. Formalization increases as firms get older, larger, and more regulated Problems  Reduces organizational flexibility  May undermine work efficiency  Job dissatisfaction and work stress

11 12-11 Mechanistic vs. Organic Structures Mechanistic Narrow span of control High formalization High centralization Organic Wide span of controlWide span of control Little formalizationLittle formalization Decentralized decisionsDecentralized decisions

12 Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Organizational Departmentalization Organizational Structure

13 12-13 Effects of Departmentalization 1. Establishes chain of command (supervision structure) 2. Creates common mental models, measures of performance, etc 3. Encourages staff to coordinate through informal communication

14 12-14 Organizes employees around specific knowledge or other resources (marketing, production) CEO FinanceProduction Marketing Functional Organizational Structure

15 12-15 Evaluating Functional Structures Benefits  Supports professional identity and career paths  Permits greater specialization  Easier supervision --similar issues  Creates an economy of scale --common pool of talent Limitations  More emphasis on subunit than organizational goals  Higher dysfunctional conflict  Poorer coordination -- requires more controls

16 12-16 Organizes employees around outputs, clients, or geographic areas Divisional Structure CEO ConsumerProductsLightingProducts MedicalSystems

17 12-17 Divisional Structures Dynamics Different forms of divisional structure  Geographic structure  Product structure  Client structure Best form depends on environment Movement away from geographic form  Less need for local representation  Reduced geographic variation  More global clients

18 12-18 Evaluating Divisional Structures Benefits  Building block structure -- accommodates growth  Better coordination in diverse markets Limitations  Duplication, inefficient use of resources  Specializations are dispersed, creating silos of knowledge

19 12-19 W. L. Gore’s Team-Based Structure W. L. Gore & Associates Inc. has an extreme team-based organizational structure that eliminates the traditional hierarchy. Associates are organized around self-directed teams at dozens of manufacturing and sales offices around the world. © Bill Kramer/ Bill Kramer Photography Inc.

20 12-20 Team-Based Structure Features Self-directed work teams Teams organized around work processes Very flat hierarchy, few management levels Very little formalization Usually found within divisionalized structure © Bill Kramer/ Bill Kramer Photography Inc.

21 12-21 Evaluating Team-Based Structures Benefits  Responsive, flexible  Lower admin costs  More informed decisions Limitations  Interpersonal training costs  Slower during team development  Stress due to ambiguous roles  Problems with supervisor role changes  Duplication of resources © Bill Kramer/ Bill Kramer Photography Inc.

22 12-22 Ed Kaiser/Edmonton Journal Bioware’s Matrix Structure Ray Muzyka (left) and Greg Zeschuk (right) adopted a matrix organizational structure for their electronic games company, Bioware, because it balances the need for teamwork and information sharing.

23 12-23 Project C Manager Project B Manager Project A Manager EngineeringMarketingDesign Matrix Structure (Project-based) CEO Employees ( ) are temporarily assigned to a specific project team and have a permanent functional unit

24 12-24 Evaluating Matrix Structures Benefits  Uses resources and expertise effectively  Improves communication,flexibility, innovation  Focuses specialists on clients and products  Supports knowledge sharing within specialty across groups  Solution when two divisions have equal importance Limitations  Increases goal conflict and ambiguity  Two bosses dilutes accountability  More conflict, organizational politics, and stress

25 Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Contingencies of Organizational Structure Organizational Structure

26 12-26 External Environment & Structure Dynamic High rate of change Use team-based, network, or other organic structure Stable Steady conditions, predictable change Use mechanistic structure Complex Many elements (such as stakeholders) Decentralize Simple Few environmental elements Less need to decentralize

27 12-27 Diverse Several products, clients, regions Use divisional form aligned with the diversity Hostile Competition and resource scarcity Use organic structure for responsiveness Integrated Single product, client, place Use functional structure, or geographic division if global Munificent Plenty of resources and product demand Less need for organic structure External Environment & Structure (con’t)

28 12-28 Effects of Organizational Size As organizations grow, they have: More division of labor (job specialization) Greater use of standardization More hierarchy and formalization More decentralization

29 12-29 Technology and Structure Technology refers to mechanisms or processes by which an organization turns out its product or service Two contingencies:  Variability -- the number of exceptions to standard procedure that tend to occur.  Analyzability -- the predictability or difficulty of the required work

30 12-30 Organizational Strategy Structure follows strategy  Strategy points to the environments in which the organization will operate  Leaders decide which structure to apply Differentiation strategy  Providing unique products or attracting clients who want customization Cost leadership strategy  Maximize productivity in order to offer competitive pricing

31 Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Organizational Structure Chapter Twelve Ed Kaiser/Edmonton Journal


Download ppt "Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Organizational Structure Chapter Twelve Ed Kaiser/Edmonton Journal."

Similar presentations


Ads by Google