1. Organizations: Effectiveness, Design, and Cultures
Lecture# 9
Organizations: Effectiveness, Design, and Cultures

2. Lecture Objectives
Identify and describe four characteristics common to all organizations and distinguish between line and staff positions.
Describe a business organization in terms of the open-system model and explain the term learning organization.
Describe the time dimension of organizational effectiveness.
Explain the concept of contingency organization design and distinguish between mechanistic and organic organizations.

3. Lecture Objectives
Identify and briefly describe the five basic departmentalization formats.
Describe how a highly centralized organization differs from a highly decentralized one.
Define the term delegation and list at least five common barriers to delegation.
Explain how the traditional pyramid organization is being reshaped.
Describe at least three characteristics of organizational cultures and explain the cultural significance of stories.

4. Organization Structure and Effectiveness
An organization is a cooperative social system of two or more people with a common purpose
Common Characteristics of Organizations
Coordination of effort: Multiplying individual contributions to achieve results greater than those possible by individuals working alone
Common goal or purpose: Having a focus to strive for something of mutual interest
Division of labor: Dividing tasks into specialized jobs that use human resources efficiently
Hierarchy of authority: Using a chain of command to control and direct the actions of others
authority: right to direct the actions of others- полномочие: право направлять действия других

5. Organization Charts Organization Chart (Table)
A visual display of an organization’s positions and lines of authority that is useful as a blueprint for deploying human resources
Vertical and Horizontal Dimensions
Vertical hierarchy establishes the chain of command.
Horizontal specialization denotes the division of labor.
Line and Staff Positions
Line managers make decisions and staff personnel provide advice and support.
Personal staff are assigned to a specific manager in supporting roles.

7. Organizations as Open Systems
Characteristics of Open Systems
Interaction with the external environment through permeable boundaries
An open-system model encourages managers to think about the organization’s life-support system
Interacting organizational subsystems:
Technical (production function) subsystems define the organization’s transformation process.
Boundary-spanning subsystems provide the organization’s interface with the external environment.
Managerial subsystems bridge (control and direct) the technical and boundary-spanning subsystems.

8. Organizational Learning
Learning Organization
One that can create, acquire, and transfer knowledge, and can then adapt its behavior accordingly
Necessary Skills for a Learning Organization
Solving problems
Experimenting
Learning from organizational experience and history
Learning from others
Transferring and implementing

9. Organizational Effectiveness
A measure of whether or not organizational objectives are accomplished
Efficiency
A measure of the relationship between inputs and outputs for the organization
No Silver Bullet
No single approach to the evaluation of effectiveness is appropriate in all circumstances or for all organizational types.
Silver Bullet-Серебряная Пуля

10. Figure 9.4: The Time Dimension of Organizational Effectiveness

11. Contingency Design Contingency Design
The process of determining the degree of environmental uncertainty and adapting the organization and its subunits to the situation
How much environmental uncertainty is there?
What combination of structural characteristics is most appropriate?

12. Table 9.1: Determining Degree of Environmental Uncertainty

13. Table 9.2: Mechanistic versus Organic Organizations

14. Basic Departmentalization Formats
Grouping of related jobs or processes into major organizational units

15. Basic Departmentalization Formats (cont’d)
Functional Departments
Categorize jobs according to the activity performed
Product-Service Departments
Group jobs around a specific product or service
Geographic Location Departments
Based on the physical dispersion of assets, resources, and customers
Customer Classification Departments
Centered on various customer categories
Work Flow Process Departments in Reengineered Organizations
Emphasis on smooth and speedy work flow between two points:
Identifying customer needs
Satisfying the customer

16. Span of Control Span of Control (Management)
The number of people who report to a manager.
Narrow spans of control foster tall organizations with many organizational/managerial layers.
Flat organizations have wider spans of control.
Is There an Ideal Span of Control?
The right span of control efficiently balances too little and too much supervision.
Situational factors dictate the width of spans of control.

17. Centralization and Decentralization
The retention of decision-making authority by top management
Decentralization
The sharing of decision-making authority by management with lower-level employees
The Need for Balance
The challenge to balance the need for responsiveness to changing conditions (decentralization) with the need to create low-cost shared resources (centralization)

18. The Changing Shape of Organizations
Characteristics of New Organizations
Fewer organizational layers
More teams
Smallness within bigness
New Organizational Configurations
Hourglass organization: Three-layer structure with constricted middle (management) layer
Cluster organization: Collaborative structure in which teams are the primary unit
Virtual organizations: Internet-linked networks of value-adding subcontractors

19. Characteristics of Organizational Cultures
Collective: Organizations are social entities.
Emotionally charged: The organization’s culture serves as a security blanket to its members.
Historically based: Trust and loyalty result from long-term organizational associations.
Inherently symbolic: Actions often speak louder than words.
Dynamic: Culture promotes stability and control.
Inherently fuzzy: Ambiguity, contradictions, and multiple meanings are part of culture.
Inherently fuzzy- Неотъемлемо нечеткий
security blanket- одеяло безопасности
Ambiguity-Двусмысленность
Contradictions-противоречия

20. Figure 9.11: Forms and Consequences of Organizational Culture

21. Summary
All organizations exhibit four characteristics: (1) coordination of effort, (2) common goal or purpose, (3) division of labor, and (4) hierarchy of authority.
In open-system terms, business organizations are made up of interdependent technical, boundary-spanning, and managerial subsystems.
Organizations need to satisfy different effectiveness criteria in the near, intermediate, and distant future.
Contingency advocates contend that there is no one best organizational setup for all situations.

22. Summary (cont’d)
There are five basic departmentalization formats: functional, product-service, geographic location, customer classification, and work flow process departmentalization.
Situational factors dictate degree of centralization and how many people a manager can directly supervise
Effective delegation permits managers to tackle higher-priority duties while helping train and develop lower-level managers.
Management is reshaping the traditional pyramid bureaucracy. Three emerging configurations are the hourglass, cluster, and virtual organization.
Organizational culture is the “social glue” binding people together through shared symbols, language, stories, and practices.

23. Terms to Understand Organization Span of control Authority
Organization chart
Line and staff organization
Learning organization
Organizational effectiveness
Contingency design
Mechanistic organizations
Organic organizations
Departmentalization
Span of control
Centralization
Decentralization
Delegation
Hourglass organization
Cluster organization
Virtual organization
Organizational culture
Organizational values
Organizational socialization