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MGT 4153 Dr. Rebecca Long. Managing By Design Questions Long 2 1. A popular form of organizing is to have employees work on what they want in whatever.

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Presentation on theme: "MGT 4153 Dr. Rebecca Long. Managing By Design Questions Long 2 1. A popular form of organizing is to have employees work on what they want in whatever."— Presentation transcript:

1 MGT 4153 Dr. Rebecca Long

2 Managing By Design Questions Long 2 1. A popular form of organizing is to have employees work on what they want in whatever department they choose so that motivation and enthusiasm stay high. Disagree. (page 91)

3 What is Structure? Long 3 Designates formal reporting relationships Identifies grouping of individuals into units and units into the organization Includes design of systems to ensure communication, coordination and integration of effort (page 90)

4 Long 4 Designed for efficiency: Centralized Designed for learning: Decentralized (page 93)

5 Efficiency vs. Learning Design (page 93) Long 5 Horizontal Organization Designed for Learning Vertical Organization Designed for Efficiency Dominant Structural Approach Horizontal structure is dominant Shared tasks, empowerment Relaxed hierarchy, few rules Horizontal, face-to-face communication Many teams and task forces Decentralized decision making Vertical structure is dominant Specialized tasks Strict hierarchy, many rules Vertical communication and reporting systems Few teams, task forces or integrators Centralized decision making

6 Information-sharing Perspective on Structure Long 6 Design: Provide both vertical and horizontal information flow to accomplish organizational goals. If structure doesn’t fit, people will have either too little information or spend time processing information not vital to their tasks. Vertical linkages are designed primarily for control. Horizontal linkages are designed for coordination and collaboration, which usually means reducing control. (page 93)

7 Information Processing & Structure (page 93) Long 7 Horizontal Linkages – Coordination and communication across organizational departments to achieve unity of effort and objectives Information Systems Direct Contact Task Forces Full-Time Integrator Teams

8 Horizontal Information Sharing Long 8 Overcomes barriers between departments and provides opportunities for coordination among employees to achieve unity of effort and organizational objectives. Horizontal linkage refers to communication and coordination horizontally across organizational departments. (See italicized paragraph bottom of page 95!)

9 Vertical Information Sharing Long 9 Hierarchical referral: (exhibit 3.1, page 91) Hierarchy itself. If problem arises, information goes up the hierarchy, answer passed back down. Rules and plans: Problems and decisions can be repetitious, so employees can be taught how to respond without communicating directly with their manager. Vertical information system: Periodic reports, written information, and computer-based information systems. Is efficient in this type of system. (pages 93-94)

10 Managing By Design Questions Long 10 2. Committees and task forces whose members are from different departments are often worthless for getting things done. Disagree. (page 97)

11 Design Options for Grouping Employees into Departments (page 103) Long 11 Engineering MarketingManufacturing CEO Functional Grouping Functional Grouping Divisional Grouping Divisional Grouping CEO Division A Division B Division C

12 Full-time Integrator (page 97) Long 12 Product Manager, Project Manager, Program Manager, Brand Manager. Located outside any of the departments and does not report to one being coordinated. Can also be responsible for or change project. See Exhibit 3.3, page 98.

13 Strengths & Weaknesses of Functional Design (page 102) Long 13 STRENGTHS: Economies of scale within functions In-depth knowledge and skill development Enables accomplishment of functional goals Best with only one or a few products WEAKNESSES: Slow response time May cause decisions to pile up hierarchy overload Poor horizontal coordination across departments Less innovation Restricted view of organizational goals

14 Long 14 Economies of scale: Results when all employees are located in the same place and can share facilities. Producing all products in a single plant, for example, enables the plant to acquire the latest machinery.

15 Strengths & Weaknesses of Divisional Design (page 102) Long 15 STRENGTHS: Fast change Client satisfaction High coordination across functions Allows adaptation to differences in products, regions, clients Best in large organizations with several products Decentralizes decision-making WEAKNESSES: Eliminates economies of scale in departments Poor coordination across product lines No in-depth competence Integration and standardization across product lines difficult

16 Matrix Design (pages 110-115) Long 16 Multifocused Grouping Multifocused Grouping CEO Manufacturing Marketing Product Division B Product Division B Product Division A Product Division A

17 Strengths & Weaknesses of Matrix Design (page 112) Long 17 STRENGTHS : Coordination necessary to meet dual demands from customers Flexible sharing of human resources across products Complex decisions and frequent changes Opportunity for both functional and product skill development Best in medium-sized organizations with multiple products WEAKNESSES: Dual authority, frustrating and confusing Participants need good interpersonal skills and training Time consuming; frequent meetings and conflict resolution sessions Participants understand it and adopt collegial rather than vertical-type relationships Requires great effort to maintain power balance

18 A Horizontal Design (pages 115-119) Long 18 Team 3 Team 3 Team 2 Team 2 Team 1 Team 1 Top Management Team Top Management Team 3 Team 3 Team 2 Team 2 Team 1 Team 1 Customer Process Owner Process Owner Process Owner Process Owner Testing Product Planning Product Planning Research Market Analysis Market Analysis New Product Development Process Distrib. Material Flow Material Flow Purchasing Analysis Procurement and Logistics Process

19 Strengths & Weaknesses of Horizontal Design (page 118) Long 19 STRENGTHS : Flexibility and rapid response to customer needs Attention directed toward production and delivery of value to the customer Employee has a broader view of organizational goals Promotes focus on teamwork Improves quality of life; opportunity to share responsibility, make decisions, and be accountable WEAKNESSES : Determining core processes to organize around is difficult and time- consuming Must change culture, job design, management philosophy, information and reward systems Managers have to give up power and authority Requires significant training Can limit in-depth skill development

20 Symptoms of Structural Deficiency (page 126) Long 20 Decision making is delayed or lacking in quality The organization does not respond innovatively to a changing environment Too much conflict is evident

21 Managing By Design Questions Long 21 3. Top managers are smart to maintain organizational control over the activities of key work units rather than contracting out some work unit tasks to other firms. Disagree (page 125)

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