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Chapter 8 Organization Structure and Design EXPLORING MANAGEMENT.

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Presentation on theme: "Chapter 8 Organization Structure and Design EXPLORING MANAGEMENT."— Presentation transcript:

1 Chapter 8 Organization Structure and Design EXPLORING MANAGEMENT

2 Chapter 8 What is organizing as a managerial responsibility? What are the most common types of organization structures? What are the trends in organizational design?

3 8.1 Organizing Organizing is one of the management functions Organization charts describe the formal structures of organizations Organizations also operate with informal structures Informal structures have good points and bad points

4 ORGANIZING Management Functions Organizing –Arranges people and resources to work toward a goal

5 ORGANIZING Organizational Charts Structure –system of tasks, reporting relationships, and communication that links people and positions within an organization. Organization Charts –describe the formal structure, how an organization should ideally work.

6 Positions and titles show work responsibilities. Division of work Lines between positions show who reports to whom in the chain of command. Supervisory relationships The number of persons reporting to a supervisor. Span of control Lines between positions show routes for formal communication flows. Communication channels Which job titles are grouped together in work units, departments, or divisions. Major subunits Staff specialists that support other positions and parts of the organization. Staff positions The number of management layers from top to bottom. Levels of management ORGANIZING Organizational Charts What You Can Learn from an Organization Chart

7 ORGANIZING Formal Structure

8 Division of Labor –People and groups performing different jobs. Formal Structure –The official structure of the organization. Informal Structure –The unofficial relationships that develop among an organization’s members.

9 ORGANIZING Informal Structure Informal Structure –Unofficial but important working relationships between members.

10 ORGANIZING Informal Structure Informal Structures have good and bad points –Social network analysis identifies communication relationships –Good points include problem solving, support, friendship and fill gaps in the formal structure –Bad points include rumors, inaccurate information and resistance to change

11 8.2 Common Types of Structures Functional structures group together people using similar skills Divisional structures group together people by products, customers or locations Matrix structures combine the functional and divisional structures Team structures use many permanent and temporary teams Network structures extensively use strategic alliances and outsourcing

12 COMMON ORGANIZATIONAL STRUCTURES Functional Structures Functional Structures group people with similar skills –Departmentalization Grouping people and jobs into a work unit –Functional Structure Work units have similar skills and tasks such as finance, marketing, production and human resources. –Work best in smaller or stable organizations

13 COMMON ORGANIZATIONAL STRUCTURES Functional Structures Potential Advantages of Functional Structures Economies of scale make efficient use of human resources. Functional experts are good at solving technical problems. Training within functions promotes skill development. Career paths are available within each function.

14 COMMON ORGANIZATIONAL STRUCTURES Functional Structures Common functional structure

15 COMMON ORGANIZATIONAL STRUCTURES Functional Structures Functional Chimneys or Silos Communication and performance decrease across functions

16 COMMON ORGANIZATIONAL STRUCTURES Divisional Structures Divisional structures group together people who work on a similar product, work in the same geographical region, or serve the same customers

17 COMMON ORGANIZATIONAL STRUCTURES Divisional Structures Common divisional structures

18 COMMON ORGANIZATIONAL STRUCTURES Divisional Structures Potential Advantages of Divisional Structures Expertise focused on special products, customers, regions Better coordination across functions within divisions Better accountability for product or service delivery Easier to grow or shrink in size as conditions change

19 COMMON ORGANIZATIONAL STRUCTURES Matrix Structures Matrix Structures combine functional and divisional structures uses permanent cross functional teams to try to gain the advantages of both the functional and divisional approaches

20 COMMON ORGANIZATIONAL STRUCTURES Matrix Structures

21 Potential advantages of Matrix structures Performance accountability rests with program, product, or project managers. Better communication exists across functions. Teams solve problems at their levels. Top managers spend more time on strategy.

22 COMMON ORGANIZATIONAL STRUCTURES Team Structures Team Structures Make use of permanent and temporary cross functional teams Improved problem solving and project management

23 COMMON ORGANIZATIONAL STRUCTURES Team Structures Team structure example

24 COMMON ORGANIZATIONAL STRUCTURES Team Structures Possible advantages of Team structures Team assignments improve communication, cooperation, and decision-making. Team members get to know each other as persons, not just job titles. Team memberships boost morale, and increase enthusiasm and task involvement.

25 COMMON ORGANIZATIONAL STRUCTURES Network Structures Network structures Consist of a central core with networks of relationships with contractors Contractors and network partners supply essential services

26 COMMON ORGANIZATIONAL STRUCTURES Network Structures Network structure example

27 COMMON ORGANIZATIONAL STRUCTURES Network Structures Possible advantages of Network structures Lower costs due to fewer full-time employees. Better access to expertise through specialized alliance partners and contractors. Easy to grow or shrink with market conditions.

28 COMMON ORGANIZATIONAL STRUCTURES Network Structures Virtual Organizations Network that depends on information technology to link alliances and essential services

29 8.3 Organizational Design Trends Organizations are becoming flatter, with fewer levels of management Organizations are increasing decentralization Organizations are increasing delegation and empowerment Organizations are becoming more horizontal and adaptive Organizations are using more alternative work schedules

30 ORGANIZATIONAL DESIGN TRENDS Organizational Design Organizational Design Aligns structure to best accomplish mission and respond to external environment

31 ORGANIZATIONAL DESIGN TRENDS Organizational Design Span of control How many people report to a manager –Narrow manger supervises few people –Wide manger supervises larger number of people flatter organizations have wide span of control

32 ORGANIZATIONAL DESIGN TRENDS Organizational Design

33 ORGANIZATIONAL DESIGN TRENDS Decentralized Decision-making Centralization Top management keeps strong decision- making control Decentralization Decision-making is distributed throughout the organization

34 ORGANIZATIONAL DESIGN TRENDS Increased Delegation Delegation Giving others the right to make decisions and take action Steps 1.Assign responsibility—explain task and expectations to others. 2.Grant authority—allow others to act as needed to complete task. 3.Create accountability—require others to report back, complete task.

35 Empowerment Gives people freedom to do their jobs as they think best. When delegation is done well it leads to empowerment.

36 ORGANIZATIONAL DESIGN TRENDS Horizontal and Adaptive Organizations Bureaucracy Formal authority –Rules –Order –Fairness Mechanistic Designs –Bureaucratic –Centralized –Vertical structure

37 ORGANIZATIONAL DESIGN TRENDS Horizontal and Adaptive Organizations Organic Designs –Adaptable –Decentralized –Horizontal Structure

38 ORGANIZATIONAL DESIGN TRENDS Horizontal and Adaptive Organizations

39 ORGNIZATIONAL DESIGN TRENDS Alternative Work Schedules Alternative schedules increase flexibility and increase satisfaction for employers and employees Compressed workweek Flextime Job sharing Telecommuting


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