1. Copyright ©2008 Cengage Learning. All rights reserved 1 Chapter 9 Designing Adaptive Organizations Designed & Prepared by B-books, Ltd. MGMT 2008 Chuck Williams

2. Copyright ©2008 Cengage Learning. All rights reserved 2 Organizational Structure The vertical and horizontal configuration of departments, authority, and jobs within a company. Organizational Process The collection of activities that transform inputs into outputs that customers value.

3. Copyright ©2008 Cengage Learning. All rights reserved 3 Organizational Structure Process View of Microsoft’s Organization

4. Copyright ©2008 Cengage Learning. All rights reserved 4 Designing Organizational Structures After reading these sections, you should be able to: 1.describe the departmentalization approach to organizational structure. 2.explain organizational authority. 3.discuss the different methods for job design.

5. Copyright ©2008 Cengage Learning. All rights reserved 5 Departmentalization Customer Geographic Matrix Functional Product 1 1

6. Copyright ©2008 Cengage Learning. All rights reserved 6 Functional Departmentalization 1.1

7. Copyright ©2008 Cengage Learning. All rights reserved 7 AdvantagesDisadvantages Functional Departmentalization Work done by highly skilled specialists Lowers costs through reduced duplication Communication and coordination problems are lessened Cross-department coordination can be difficult May lead to slower decision making Produces managers with narrow experiences 1.1

8. Copyright ©2008 Cengage Learning. All rights reserved 8 Product Departmentalization United Technologies Carrier Hamilton Sundstrand Chubb Otis Pratt & Whitney UTC Power --Administrative services --Communication & public relations --Customer service & support --E-Business --Engineering --etc… Sikorsky 1.2

9. Copyright ©2008 Cengage Learning. All rights reserved 9 AdvantagesDisadvantages Product Departmentalization Managers specialize, but have broader experiences Easier to assess work- unit performance Decision-making is faster Duplication of activities Difficult to coordinate across departments 1.2

10. Copyright ©2008 Cengage Learning. All rights reserved 10 Customer Departmentalization U.S. Businesses Local Service Supply Chain Integration Supply Chain Integration Local Service Sprint Corporation International Businesses Long- Distance Service Logistics Network Long- Distance Service Solutions Wireless Services Distribution Centers Wireline & Wireless Services Business Solutions Consumer Solutions Product Development Product Development Mobile Broadband (Partial Listing) 1.3

11. Copyright ©2008 Cengage Learning. All rights reserved 11 AdvantagesDisadvantages Customer Departmentalization Focuses on customer needs Products and services tailored to customer needs Duplication of resources Difficult to coordinate across departments Efforts to please customers may hurt the company 1.3

12. Copyright ©2008 Cengage Learning. All rights reserved 12 Geographic Departmentalization Coca-Cola Enterprises Territories of Operation 1.4

13. Copyright ©2008 Cengage Learning. All rights reserved 13 AdvantagesDisadvantages Geographic Departmentalization Responsive to the demands of different market areas Unique resources located close to the customer Duplication of resources Difficult to coordinate across departments 1.4

14. Copyright ©2008 Cengage Learning. All rights reserved 14 Matrix Departmentalization Procter & Gamble North America WesternEuropeWesternEurope Asia, India, Australia Australia Beauty Care, Feminine Care Beauty Care, Feminine Care Fabric & Home Care Fabric & Home Care Baby Care, Family Care Baby Care, Family Care Snacks & Beverages Snacks & Beverages CountryManagers inSpain, UAE,Kenya, etc. CountryManagers inIndia, SouthKorea, Australia,etc. 1.5

15. Copyright ©2008 Cengage Learning. All rights reserved 15 AdvantagesDisadvantages Matrix Departmentalization Efficiently manage large, complex tasks Pool of available resources Requires high levels of coordination Conflict between bosses Requires high levels of management skills 1.5

16. Copyright ©2008 Cengage Learning. All rights reserved 16 Organizational Authority Delegation of Authority Degree of Centralization Degree of Centralization Chain of Command Line versus Staff Authority 2 2

17. Copyright ©2008 Cengage Learning. All rights reserved 17 Chain of Command The vertical line of authority in an organization Clarifies who reports to whom Unity of command –workers report to only one boss –matrix organizations violate this principle 2.1

18. Copyright ©2008 Cengage Learning. All rights reserved 18 Line versus Staff Authority Line authority –the right to command immediate subordinates in the chain of command Staff authority –the right to advise but not command others 2.2

19. Copyright ©2008 Cengage Learning. All rights reserved 19 Delegation of Authority The assignment of direct authority and responsibility to a subordinate to complete tasks for which the manager is normally responsible. 2.3

20. Copyright ©2008 Cengage Learning. All rights reserved 20 Delegation of Authority 2.3

21. Copyright ©2008 Cengage Learning. All rights reserved 21 How to be a More Effective Delegator 1.Trust your staff to be a good job 2.Avoid seeing perfection 3.Give effective job instructions 4.Know your true interests 5.Follow up on progress. 6.Praise the efforts of your staff. 7.Don’t wait to the last minute to delegate. 8.Ask questions, expect answers, assist employees. 9.Provide the resources you would provide if doing the assignment yourself. 10.Delegate to the lowest possible level. 2.3

22. Copyright ©2008 Cengage Learning. All rights reserved 22 Degree of Centralization Centralization of authority primary authority is held by upper management Decentralization significant authority is found in lower levels of the organization Standardization solving problems by applying rules, procedures, and processes 2.4

23. Copyright ©2008 Cengage Learning. All rights reserved 23 Can Democracy Work In Business? At Ternary Software Inc., all policy decisions must be agreed to unanimously. Many employers are allowing employees a greater say in workplace policies. Though Ternary’s system has met with success, it probably would not work well on a larger scale. Source: Badal, Jaclyne. “Can a Company Be Run as a Democracy?” The Wall Street Journal. April 23, 2007. pg.B1. Beyond the Book

24. Copyright ©2008 Cengage Learning. All rights reserved 24 Job Design Specialized Jobs Job Rotation, Enlargement, Enrichment Job Characteristics Model 3 3

25. Copyright ©2008 Cengage Learning. All rights reserved 25 Job Specialization  A job that is a small part of a larger task or process  Jobs are simple, easy to learn, and economical  Can lead to low satisfaction, high absenteeism, & employee turnover 3.1

26. Copyright ©2008 Cengage Learning. All rights reserved 26 Job Rotation, Enlargement, and Enrichment Job Rotation –periodically moving workers from one specialized job to another Job Enlargement –increasing the number of tasks performed by a worker Job Enrichment –adding more tasks and authority to an employee’s job 3.2

27. Copyright ©2008 Cengage Learning. All rights reserved 27 Job Characteristics Model  A job redesign approach that seeks to increase employee motivation  Emphasizes internal motivation  experience work as meaningful  experience responsibility for work outcomes  knowledge of results 3.3

28. Copyright ©2008 Cengage Learning. All rights reserved 28 Job Characteristics Model 3.3

29. Copyright ©2008 Cengage Learning. All rights reserved 29 Job Redesign Techniques Redesigning Jobs Combining Tasks Forming Natural Work Units Establishing Client Relationships Vertically Loading the Job Opening Feedback Channels 3.3

30. Copyright ©2008 Cengage Learning. All rights reserved 30 Designing Organizational Processes After reading these sections, you should be able to: 4.explain the methods that companies are using to redesign international organizational processes (i.e., intraorganizational processes). 5.describe the methods that companies are using to redesign external organizational processes (i.e., interorganizational processes).

31. Copyright ©2008 Cengage Learning. All rights reserved 31 Intraorganizational Processes Reengineering Empowerment 4 4

32. Copyright ©2008 Cengage Learning. All rights reserved 32 Reengineering  The fundamental rethinking and radical redesign of business processes  Intended to achieve dramatic improvements in performance  Change the orientation from vertical to horizontal  Changes task interdependence 4.1

33. Copyright ©2008 Cengage Learning. All rights reserved 33 Reengineering and Task Interdependence 4.1

34. Copyright ©2008 Cengage Learning. All rights reserved 34 Empowerment  A feeling of intrinsic motivation  Workers perceive meaning in their work  Employees are capable of self-determination Empowering Workers Permanently passing decision-making authority and responsibilities from managers to workers by giving them the information and resources they need to make good decisions 4.2

35. Copyright ©2008 Cengage Learning. All rights reserved 35 Behavioral InformalityBehavioral Formality Behavioral Informality Spontaneity Casualness Interpersonal familiarity Routine & regimen Specific behavior rules Impersonal detachment Beyond the Book

36. Copyright ©2008 Cengage Learning. All rights reserved 36 Behavioral Informality Popular ways to increase behavioral informality Casual Dress and Open Offices Beyond the Book

37. Copyright ©2008 Cengage Learning. All rights reserved 37 Interorganizational Processes Modular Organizations Modular Organizations Virtual Organizations 5 5

38. Copyright ©2008 Cengage Learning. All rights reserved 38 Modular Organizations 5.1

39. Copyright ©2008 Cengage Learning. All rights reserved 39 Modular Organizations AdvantagesDisadvantages can cost less to run than traditional organizations lets organizations focus on core competencies loss of control from outsourcing may reduce their competitive advantage 5.1

40. Copyright ©2008 Cengage Learning. All rights reserved 40 Virtual Organizations 5.2

41. Copyright ©2008 Cengage Learning. All rights reserved 41 Virtual Organizations AdvantagesDisadvantages let companies share costs fast and flexible being the “best” should provide better products difficult to control the quality of partners requires tremendous management skills http://www.agileweb.com Web Link 5.2