UGBA 105 Sections 102, 104, 106 Week 3: Organizational Structure

In the news … Ford names new CEO Struggling No. 2 automaker says Bill Ford Jr. will be succeeded as CEO by Alan Mulally, from Boeing. September : 6:05 PM EDT NEW YORK (CNNMoney.com) -- Ford Motor Co. Tuesday surprised the auto industry by tapping senior Boeing executive Alan Mulally as its new chief executive officer, succeeding current CEO Bill Ford, who will stay on as chairman. Mulally, 61, who heads Boeing's commercial airplane unit, will become president and CEO of Ford immediately as the struggling automaker gets set to unveil a huge overhaul of its North American auto operations. Mulally was most recently executive vice president at Boeing (Charts).BoeingCharts Shares of Ford (Charts) rose about 1.5 percent on the New York Stock Exchange Tuesday and surged another 2 percent or so in after-hours trading.FordCharts The announcement came after the close of regular trading. Industry analysts said that Bill Ford, the 49-year-old great-grandson of company founder Henry Ford, was making a smart move but that more would be needed to halt the slide in market share for the nation's No. 2 automaker. "I think Bill Ford was under some pressure to bring in additional leadership," Tim Ghriskey at Solaris Asset Management, an investment firm, told Reuters. "He remains as executive chairman, still very much in control, but I think this step to bring in new management from outside the company is a smart, mature action... to move the company on to the next step." Ghriskey noted that GM has made more headway in restructuring than has Ford. "My point with Ford is and always has been, they wouldn't be in this position if they didn't have these problems on the product side," Erich Merkle, analyst at IRN Inc., told the news agency. "What Ford has to do on the product side is to get back to an understanding of why people purchase cars and take more risks in terms of design." Bill Ford told employees just recently that the company needs a new business model and is considering turning to outside executives and making alliances with other carmakers, according to a Financial Times report on Sunday citing a memo it said was sent to staff. Alan Mulal ly “Asked why he chose someone from outside the organization, Ford said that wasn't one of the central criteria guiding his decision. “’It wasn't about inside versus outside. I was more focused on who was the best candidate,’ he told reporters. "Business skills are by and large transferable, especially with someone with an industrial background who's focused on the customer."

Agenda 1. Review: Formal organization 2. Types of org structures 3. Allentown 4. Next week’s coming attractions 5. Team assignments

1. Review: Formal org Strategic grouping: How work is divided Strategic grouping: How work is divided –Functional –Divisional –Matrix –Process –Network –Hybrid

1. Review (cont.) Strategic linking: How work is coordinated Strategic linking: How work is coordinated –Hierarchy –Mutual adjustment –Rules & standards –“Culture”

1. Review (cont.) How do you decide: Considerations How do you decide: Considerations –Task interdependence –Congruence! (environment, informal org, people, etc.)

2. Types of structure

R&D Engineer- ing Manu- facturing General Manager Human resources Sales Product A Product B Product C Functional grouping

CEO Cars Prefab Houses Electronics HRMfgMktHRMfgMktHRMfgMkt Product grouping

CEO North America Europe Asia Pacific HRMfgMktHRMfgMktHRMfgMkt Regional grouping

Product Z manager Engineer- ing Manufac- turing Marketing General Manager Z Eng Z Mfg Z Mkt Matrix organization

Top Management Team Process Coordinators Team Process Coordinators Team Process Coordinators New product development process Order fulfillment process Procurement, logistics process

Designers Core Firm Producers Distributors Suppliers Managers Suppliers Distributors IT Services Producers Designers Distributors Suppliers Brokers Full Vertical Integration Full Network Organization Networked Firm HR Services IT Services HR Services Designers Marketers HR Services IT Services

Managing process & network organizations Abandonment of the “ manager as engineer ” (vertical, mechanistic) model Abandonment of the “ manager as engineer ” (vertical, mechanistic) model –Less hierarchical command & control –Fewer rules, standards, and procedures –Less detailed and rigid division of labor –No more vertical career Embrace of “ manager as leader ” (horizontal, organic) model Embrace of “ manager as leader ” (horizontal, organic) model –Teamwork (coordination through mutual adjustment) –Networking and political maneuvering –Leadership and culture –Entrepreneurial

4. Allentown Materials

5. Recap Define and describe the different types of organizational structures Define and describe the different types of organizational structures Understand the pros/cons and the tradeoffs made in each Understand the pros/cons and the tradeoffs made in each Identify some of the considerations managers weigh when making decisions about structure Identify some of the considerations managers weigh when making decisions about structure

5. Wrap-up/Next week Did everyone sign in? Did everyone sign in? For next week, prep the case “The Team that Wasn’t” For next week, prep the case “The Team that Wasn’t” Be sure you’re doing the readings Be sure you’re doing the readings

TEAMS Team 1 Team 1 –Minette –Jessica –Vivian –Richard Team 2 Team 2 –Katherine –Eric –Roger –Melanie Team 3 Team 3 –Brandon –Kevin –Angela –Alfonso Team 4 Team 4 –Angelo –Stephanie –Paul –Yuet Team 5 Team 5 –DianaW –Dean –Kei Man –Sepideh Team 6 Team 6 –Laura –Margaretha –Jennifer –Michael Team 7 Team 7 –Anthony –Jean –Samuel –Veronique

TEAMS Team 1 Team 1 –Jennifer –Keng Wai –Alexander –Ruoh-Wei –Michael Team 2 Team 2 –Claudia –Verena –Sarah –Sofia –Ha Kyung Team 3 Team 3 –Jason –Rosalva –Angie –Hannah –Katherine Team 4 Team 4 –Claire –Erick –Hamed –Josephine –Ian Team 5 Team 5 –Danielle –Seema –Ramon –Louise –Joseph Team 6 Team 6 –Albert –George –Wing Yan –Kazuma –Wang Team 7 Team 7 –Brian –Maryanne –Anton –Reilly –Erica Team 8 Team 8 –Terri –Nicholai –James –Edward –Zarina

TEAMS Team 1 Team 1 –Samin –Jennifer –Kirstin –Katya Team 2 Team 2 –Andy –Ethan –Christopher –Brian Team 3 Team 3 –Ian –Wayne –David –Jun –Tracy Team 4 Team 4 –Cindy –Alex F. –Jonanthan –Josephine –Ben Team 5 Team 5 –Martine –Alex H. –Yaniv –Jaime –Cherie Team 6 Team 6 –Anthony –Andrew –Hamed –Sagar –Nicholas Team 7 Team 7 –Douglas –Pav –Shirley –Yang –Jin Team 8 Team 8 –Maria –Priya –Elizabeth –Amy –Shiyuan

All problems involve one or more disconnects, or incongruencies, between 4 major components of organizations: In turn, solutions involve the analytic - and creative - achievement of congruence. Input Environment (Competition, change) Resources (munificence) History (age, conditions at founding) Output Systems Unit Individual Informal Org (culture, politics leadership, networks) Tasks (technologies, work flows) People (ability, skills, motivation, biases) Formal Org (job titles, depts, reporting hierarchy, IT & HR systems) The Congruence Model Strategy (diversification innovation)

Teleconferencing Groupware Knowledge management ERP Is information technology the answer? It facilitates teamwork and networking

IT and the manager ’ s job Folklore: IT has made organizations flatter, leaner, more flexible, more virtual, more global, less integrated, empowered people, reduced need for rigid control systems Folklore: IT has made organizations flatter, leaner, more flexible, more virtual, more global, less integrated, empowered people, reduced need for rigid control systems Fact: The effects of IT have been complex & contradictory. It has also disempowered employees by intensifying surveillance, increased written communication and some forms of standardization, created information overloads and shortened attention spans Fact: The effects of IT have been complex & contradictory. It has also disempowered employees by intensifying surveillance, increased written communication and some forms of standardization, created information overloads and shortened attention spans