13-2 Organizational Design: How a Structure Connects Employees and Tasks Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Organizational Behavior, Core Concepts 13 Organizational Behavior core concepts

13-3 Learning Objectives Define organizations and their basic dimensions Explain commonly used metaphors for organizations as closed or open systems, military/mechanical bureaucracies, and biological and cognitive systems Describe basic criteria for organizational effectiveness

13-4 Learning Objectives Summarize what is involved in the contingency approach to organizational design Discuss new-style and old-style organizations, including virtual organizations

13-5 What is an Organization? Organization –system of consciously coordinated activities of two or more people.

13-6 What is an Organization? Four common denominators –Coordination of effort –Common goal –Division of labor –Hierarchy of authority

13-7 Designing Effective Teams See an article from Administrative Science Quarterly on designing effective teams

13-8 What is an Organization? Unity of command principle –each employee should report to a single manager.

13-9 Organization Charts Organization chart –boxes-and-lines illustration showing chain of formal authority and division of labor.

13-10 Sample Organization Chart for a Hospital Figure 13-1

13-11 Organization Charts Hierarchy of authority Division of labor Span of control –the number of people reporting directly to a given manager Line and staff positions

13-12 Line and Staff Positions Staff personnel –provide research, advice, and recommendations to line managers. Line Managers –have authority to make organizational decisions.

13-13 Needed: Open-System Thinking Closed System –self-sufficient entity, closed to the surrounding environment. Open System –organism that must constantly interact with its environment to survive

13-14 Organizations as Military/Mechanical Bureaucracies Bureaucracy –Max Weber’s idea of the most rationally efficient form of organization Weber’s Bureaucracy –Division of labor –A hierarchy of authority –A framework of rules –Administrative personality

13-15 Organizations as Biological Systems The complex organization is a set of interdependent parts which together make up a whole because each contributes something and receives something from the whole, which in turn is interdependent with some larger environment

13-16 The Organization as an Open System: The Biological Model Figure 13-2

13-17 Organizations as Cognitive Systems Organizations have mechanisms to interpret ambiguous events and to provide meaning and direction for participants

13-18 Question? Which effectiveness criteria is the most widely used? A.Goal accomplishment B.Resource acquisition C.Internal processes D.Strategic constituencies satisfaction

13-19 Generic Effectiveness Criteria Goal accomplishment –most widely used effectiveness criteria, measured by comparing key organizational results with previously stated goals Resource acquisition –organization is effective if it acquires necessary factors of production

13-20 Generic Effectiveness Criteria Internal processes –healthy system if information flows smoothly and if employee loyalty, commitment, job satisfaction prevail Strategic constituencies satisfaction –Strategic constituency: any group of people with a stake in the organization’s operation or success.

13-21 Mixing Effectiveness Criteria: Practical Guidelines Goal accomplishment –approach is appropriate when goals are clear, consensual, time-bounded, and measurable Resource acquisition –approach is appropriate when inputs have a traceable effect on results or output

13-22 Mixing Effectiveness Criteria: Practical Guidelines Internal processes –appropriate when organizational performance is strongly influenced by specific processes Strategic constituencies –appropriate when powerful stakeholders can significantly benefit or harm the organization

13-23 The Contingency Approach to Designing Organizations Contingency approach to organization design –creating an effective organization- environment fit.

13-24 Mechanistic versus Organic Organizations Mechanistic organizations –Rigid bureaucracies with strict rules, narrowly defined tasks, and top-down communication. Organic organizations –Flexible networks of multitalented individuals who perform a variety of tasks

13-25 Question? In what type of decision making do top managers make all key decisions? A.Centralized B.Decentralized C.Fundamental D.Primary

13-26 Approaches to Decision Making Centralized decision making –top managers make all key decisions Decentralized decision making –lower-level managers are empowered to make important decisions

13-27 New-Style versus Old-Style Organizations Table 13-1

13-28 Virtual Organizations –modern information technology allows people to get something accomplished despite being geographically dispersed