Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15 Organizational Behavior: Foundations, Realities, & Challenges Nelson & Quick, 5 th edition Organizational Design and Structure

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Organizational Design – organization’s structure Definition: Organizational Design

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Key Organizational Design Processes

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Four Dimensions – The process of deciding how to divide the work in an organization

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Horizontal Differentiation ––––

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Vertical Differentiation ––––

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Spatial Differentiation ––––

Differentiation Between Marketing and Engineering Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Basis for Difference MarketingEngineering Goal orientation Time orientation Interpersonal orientation Structure

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved –––– The process of coordinating the different parts of an organization

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Vertical Integration ––––––––––

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Horizontal Integration ––––––––

Hierarchy of Authority – Specialization – Basic Design Dimensions Formalization – Standardization – Complexity – Centralization – Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Adhocracy – Simple Structure – Machine Bureaucracy – Divisional Form – Professional Bureaucracy – Structural Configurations of Organizations Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Five Structural Configurations of Organization Structural Configuration Prime Coordinating Mechanism Key Part of Organization Type of Decentralization Simple Structure Machine Bureaucracy Professional Bureaucracy Divisionalized Form Adhocracy Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Middle Line Strategic Apex Operating Core Support Staff Techno- structure Mintzberg’s Five Basic Parts of an Organization From H. Mintzberg, The Structuring of Organizations (Upper Saddle River, N.J.: Prentice-Hall, 1979): 20. Reprinted with permission.

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Contextual Variables – Size Environment Technology Strategy and Goals Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Size Basic Design Small Large Dimensions Organizations Organizations Formalization Centralization Specialization Standardization Complexity Hierarchy of authority Size Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Technology Technological Interdependence – Technology

Relationship Between Technology and Basic Design Dimensions Key 1 Formalization 4 Standardization 2 Centralization 5 Complexity 3 Specialization 6 Hierarchy of Authority Craft Routine Nonroutine Engineering Few Exceptions Many Exceptions Task Variability Ill-defined and Unanalyzable Well-defined and Analyzable Problem Analyzability Built from C. Perrow, “A Framework for the Comparative Analysis of Organization,” American Sociological Review, April 1967, Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Environment Environment – Task Environment – Environmental Uncertainty – Environment

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Extremes of Environmental Uncertainty Mechanistic Structure – Organic Structure –

Strategic Dimension Predicted Structural Characteristics Innovation— Market differentiation— Cost control— Strategy & Goals Miller’s Integrative Framework of Structural & Strategic Dimensions D. Miller, “The Structural and Environmental Correlates of Business Strategy,” Strategic Management Journal 8 (1987): John Wiley & Sons Limited. Reproduced with permission. Strategy and Goals Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Context of the organization Correct Current Perceived Current The Relationship among Key Organizational Design Elements Structural dimensions Level of Hierarchy of Influences how manager perceive structural needs

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Which characterize the organizational processes Context of the organization Purposes Designate Designate formal information- Differentiation and Integration Which influence how well the structure meets its Which influence how well the structure fits the

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Forces Reshaping Organizations

Structural Roles of Managers Roles of Managers Today 1. Strictly adhering to boss –employee relationships 2. Getting things done by giving orders 3. Carrying messages up and down the hierarchy 4. Performing a set of tasks according to a job description 5. Having a narrow functional focus 6. Going through channels, one by one by one 7. Controlling subordinates Roles of Future Managers 1. Having hierarchical relationships subordinated 2. Getting things done by negotiating 3. Solving problems and making decisions 4. Creating the job through entrepreneurial projects 5. Having a broad cross- functional collaboration 6. Emphasizing speed and flexibility 7. Coaching one’s workers Management Review, January 1991, Thomas R. Horton. Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved HD’s Circle Organization From R. Teerlink and L. Ozley, More than a Motorcycle: The Leadership Journey at Harley-Davidson. Boston, MA, P Copyright © 2000 by the Harvard Business School Publishing Corporation; all rights reserved. Create Demand Produce Product Provide Support ____________

Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Four Symptoms of Structural Weakness Delay in decision making Poor quality decision making Lack of innovative response to changing environment High level of conflict Overloaded hierarchy... Right information... No...Departments...

Dysfunctional Personality/Organization Combinations Paranoid Dramatic Compulsive Schizoid Depressive Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved