ORGANIZATION SYSTEM, STRUCTURE, AND CULTURE

Dr. Crazy ’ s Problems - 1 Dr. Crazy left his university to open his own management consulting firm The firm provides training and consulting services on management to organizations in Hanoi The firm has 4 people – 2 of them are trainers and consultants, 1 is secretary. The firm contracts out outside trainers when needed. How do Dr. Crazy and his friends organize his firm in order to run his business?

Dr. Crazy ’ s Problems - 2 After 1 year, the firm has many customers It now has 5 trainers/ consultants and contracts outside trainers if needed It also has a number of people who help with marketing, accounting, personnel, and administration works How would Dr. Crazy organize his firm?

Figure 10.2a Functional Departmentalization Advantages Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations Coordination within functional area In-depth specialization Disadvantages Poor communication across functional areas Limited view of organizational goals

Dr. Crazy ’ s Problems - 3 After 5 year, the firm has a good reputation It now has 20 trainers/ consultants and contracts outside trainers if needed It also provides different training/consulting services - management/marketing, financial/investment, and legal – to organizations How would Dr. Crazy organize his firm?

Figure 10.2c Product Departmentalization +Allows specialization in particular products and services +Managers can become experts in their industry +Closer to customers –Duplication of functions –Limited view of organizational goals Source: Bombardier Annual Report.

Dr. Crazy ’ s Problems - 4 After 10 years, the firm has good reputation internationally It now provides these services in different countries: Laos, Mainland China, Vietnam, and Cambodia Different countries require different ways of management: customers/ local trainers/ level of requirements, etc. How would Dr. Crazy organize his firm?

Figure 10.2b Geographical Departmentalization Advantages More effective and efficient handling of specific regional issues that arise Serve needs of unique geographic markets better Disadvantages Duplication of functions Can feel isolated from other organizational areas

Defining Organizational Structure Organizational Structure  The formal arrangement of jobs within an organization. Organizational Design  A process involving decisions about six key elements: Work specialization Departmentalization Chain of command Span of control Centralization and decentralization Formalization

Exercise: NEU Structure Describe the organizational structure of NEU. Compare the structure in 2007 and today. Evaluate advantages and disadvantages of this structure Offer your recommendation for improvement

The Organization ’ s Culture Organizational Culture  A system of shared meanings and common beliefs held by organizational members that determines, in a large degree, how they act towards each other.  “The way we do things around here.” Values, symbols, rituals, myths, and practices  Implications: Culture is a perception. Culture is shared. Culture is descriptive.

Exhibit 3.2 Dimensions of Organizational Culture

Benefits of a Strong Culture Creates a stronger employee commitment to the organization. Aids in the recruitment and socialization of new employees. Fosters higher organizational performance by instilling and promoting employee initiative.

Organizational Culture Sources of Organizational Culture  The organization’s founder Vision and mission  Past practices of the organization The way things have been done  The behavior of top management Continuation of the Organizational Culture  Recruitment of like-minded employees who “fit”  Socialization of new employees to help them adapt to the culture

Three Dot.Com Companies How do you describe these companies’ structure, cultures? How do these companies develop their cultures? What are the pros and cons of these cultures?

The Old and New Ways – Examples from Three Dot.com Companies The old way The new way Security Opportunity Detachment Total commitment Hierarchy We’re all equal Work and fun don’t mix Pamper me It’s just a job It’s so much more