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Organization Behavior and Organization Structure.

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Presentation on theme: "Organization Behavior and Organization Structure."— Presentation transcript:

1 Organization Behavior and Organization Structure

2 Organization Behavior A field of study that investigates the impact that individuals, groups, and structure have on behavior within organizations, for the purpose of applying such knowledge toward improving an organization effectiveness Stephen P. Robbins & Timothy A. Judge

3 Organization Structure The way in which job tasks are formally divided, grouped, and coordinated Stephen P. Robbins & Timothy A. Judge

4 6 elements of Organization’s Structure Stephen P. Robbins & Timothy A. Judge

5 1. Work Specialization Describes the degree to which tasks in an organization are divided into separate jobs. The main idea of this organizational design is that an entire job is not done by one individual. It is broken down into steps, and a different person completes each step. Individual employees specialize in doing part of an activity rather than the entire activity.

6 2. Departmentalization The basis by which jobs in an organization are grouped together. For instance every organization has its own specific way of classifying and grouping work activities.

7 2. Departmentalization 5 common forms of departmentalization: 1. Functional departmentalization 2. Product departmentalization 3. Geographical departmentalization 4. Process departmentalization 5. Customer departmentalization

8 Functional Departmentalization PositiveNegative Efficiencies from putting together similar specialties and people with common skills, knowledge and orientations Poor communication across functional areas coordination within functional area Limited view of organizational goals In- depth specialization Plant Manager Manager engineering Manager Accounting Manager manufacturing Manager HR

9 Product Departmentalization PositiveNegative Allows specialization in particular products and services Duplication of function Managers can become experts in their industry Limited view of organizational goals Closer to customers Procter & Gamble TidePampersCharminPringles

10 Geographical Plant Manager Geographical Departmentalization PositiveNegative More effective and efficient handling of specific regional issues that arise Duplication of function Serve needs of unique geographic markets better Can feel isolated from other organizatonal areas Vice President for Sales Sales Director Western Region Sales Director Southern Region Sales Director Midwestern Region Sales Director Eastern Region

11 Process Departmentalization PositiveNegative More efficient flow of work activities can only be used with certain types of products State motor vehicle office Motor vehicles division Licensing department Treasury department

12 Customer Departmentalization PositiveNegative Customers need and problems can be met by specialists Duplication of functions Limited view of organizational goals Director of sales Manager consumers account Manager large corporation account Manager software developers account Manager small business account

13 3. Chain of Command Unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom 2 important concept: 1. Authority: Refers to the rights inherent in a managerial position to tell people what to do and to expect them to do it 2. Unity of Command: The management principle that each person should report to only one manager

14 4. Span of Control The number of subordinates a manager can efficiently and effectively direct

15 5. Centralization and Decentralization Centralization: the degree to which decision making is concentrated at a single point in an organization Decentralization: decision making is pushed down to the managers closest to the action

16 6. Formalization The degree to which jobs within an organization are standardized

17 Organizational Design Robbins

18 Simple Structure Low degree of departmentalization, Wide span of control, High authority, and Low formalization. The company usually small and “young” Used by big company in crisis, for example IBM in 1993

19 Simple Structure

20 PositiveNegative The structure is simpleLimitless decision making Flexible, fast andInsufficient if the company expands Low cost in implementation High risk in implementation

21 Bureaucracy Structure Specialization on routine operational task Formalized regulation, centralized authority, narrow span of control and decision making follow the chain of command Applied on big and mature organization with active routine and high standarization, for example U.S Department of Education

22 Bureaucracy Structure

23 PositiveNegative Carry out standarized task efficiently Can create conflict between sub-unit Doesn’t require many employee training Overly concern on rule, hence there is no initiative from the employees Increasse communication in the organization Focus on sub-unit’s objective

24 Matrix Structure A combined structure of functional departmentalization and product departmentalization Two chain of command, so each employee has two superior Used by company that require fast response in changing environment, fast information processing, and dealing with financial and human resource constrain, for example : Bussiness Administration school

25 Matrix Structure

26 PositiveNegative Simplifying the activity coordination in the company Confusion in handing the report to either superior Easy to communicate between employees Competition between managers Employee with specific skill are spread in the organization

27 Team Structure Using teams as main force in coordinating each job activities Desentralized decision making until team level Require the employee to work in specialization and generalization For Example; Food Market Inc.

28 Virtual Organization Implenting Outsourcing for main functions and sentralization of the organization Focusing on organization specialization For Example: Apex Digital

29 Virtual Organization

30 PositiveNegative Flexible in the implementation Lack of control in the organization’s sub-units

31 Boundaryless Organization Chain of command is erased, has unlimited span of control, and changing department with empowered team There are cross-hierarchy team, participative decision making, and 360 degree work valuation Employees are driven to generalisazing rather than specialisazing Organization remove the boundaries with external party For Example : Oticon A/S

32 MCS & Organizational Structure An effective execution of MCS is possible only when there is an efficient HR management, excellent work culture as well as an efficient organization culture -Subhash Chandra Das- Organization structure is a principal component in MCS’s structure. Organizational structure is a tool to distribute authority needed in using organization’s resource to achieve organization’s objective. –Mulyadi- An effective execution of MCS is possible only when there is an efficient HR management, excellent work culture as well as an efficient organization culture -Subhash Chandra Das- Organization structure is a principal component in MCS’s structure. Organizational structure is a tool to distribute authority needed in using organization’s resource to achieve organization’s objective. –Mulyadi-

33 Why do Structure Differ? Mechanistic Model : A structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization Organic Model: A structure that is flat, uses cross- hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participate decision making Major causes or determinants of an organization’s structure:  Strategy Innovation Cost Minimization Imitation  Organization size  Technology  Environment Mechanistic Model : A structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization Organic Model: A structure that is flat, uses cross- hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participate decision making Major causes or determinants of an organization’s structure:  Strategy Innovation Cost Minimization Imitation  Organization size  Technology  Environment


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