McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Ten Managing Organizational Structure and Culture

10-2 Organizational Structure  Organizational Architecture ≈ The organizational structure, control systems, culture, and human resource management systems that together determine how efficiently and effectively organizational resources are used.  Mngt 443

10-3 Designing Organizational Structure  Organizing ≈ The process by which managers establish working relationships among employees to achieve goals.  Organizational Structure ≈ Formal system of task and reporting relationships showing how workers use resources.

10-4 Factors Affecting Organizational Structure Figure 10.1

10-5 The Organizational Environment The way an organization’s structure works depends on the choices managers make about: 1.How to group tasks into individual jobs 2.How to group jobs into functions and divisions 3.How to allocate authority and coordinate functions and divisions

10-6 Job Design  Job Design ≈ The process by which managers decide how to divide tasks into specific jobs. ≈ The appropriate division of labor results in an effective and efficient workforce.

10-7 Job Design  Job Simplification ≈ The process of reducing the tasks each worker performs.  Job Enlargement ≈ Increasing the number of different tasks in a given job by changing the division of labor  Job Enrichment ≈ Increasing the degree of responsibility a worker has over a job

10-8 The Job Characteristics Model Figure 10.2

10-9 Grouping Jobs into Functions  Functional Structure ≈ An organizational structure composed of all the departments that an organization requires to produce its goods or services.

10-10 Functional Structure  Advantages ≈ Encourages learning from others doing similar jobs. ≈ Easy for managers to monitor and evaluate workers. ≈ Allows managers to create the set of functions they need in order to scan and monitor the competitive environment

10-11 Functional Structure  Disadvantages ≈ Difficult for departments to communicate with others. ≈ Preoccupation with own department and losing sight of organizational goals.

10-12 Divisional Structures  Divisional Structure ≈ Managers create a series of business units to produce a specific kind of product for a specific kind of customer ≈ Product, market, geographic

10-13 Product, Market, and Geographic Structures Figure 10.4

10-14 Types of Divisional Structures  Product Structure ≈ Managers place each distinct product line or business in its own self-contained division ≈ Divisional managers have the responsibility for devising an appropriate business-level strategy to allow the division to compete effectively in its industry

10-15 Types of Divisional Structures  Geographic Structure ≈ Divisions are broken down by geographic location  Global geographic structure ≈ Managers locate different divisions in each of the world regions where the organization operates. ≈ Generally, occurs when managers are pursuing a multi-domestic strategy

10-16 Types of Divisional Structures  Market Structure ≈ Groups divisions according to the particular kinds of customers they serve ≈ Allows managers to be responsive to the needs of their customers and act flexibly in making decisions in response to customers’ changing needs

10-17 Matrix Design Structure  Matrix Structure ≈ An organizational structure that simultaneously groups people and resources by function and product. ≈ The structure is very flexible and can respond rapidly to the need for change. ≈ Each employee has two bosses

10-18 Matrix Structure Figure 10.6

10-19 Product Team Design Structure  Product Team Structure ≈ Does away with dual reporting relationships and two-boss managers ≈ Functional employees are permanently assigned to a cross-functional team that is empowered to bring a new or redesigned product to work

10-20 Product Team Structure Figure 10.6

10-21 Hybrid Structures  Hybrid Structure ≈ The structure of a large organization that has many divisions and simultaneously uses many different organizational structures Figure 10.7

10-22 Coordinating Functions: Allocating Authority  Authority ≈ The power vested in a manager to make decisions and use resources to achieve organizational goals by virtue of his position in an organization

10-23 Allocating Authority  Line Manager ≈ Someone in the direct line or chain of command who has formal authority over people and resources  Line function is directly involved in production of good/service  Staff Manager ≈ Managers who are functional-area specialists that give advice to line managers.  Clarification re: p. 362: staff managers DO have formal authority over people and resources, i.e., staff function (accounting and finance, HR, etc.)

10-24 Tall and Flat Organizations  Tall structures have many levels of authority and narrow spans of control. ≈ As hierarchy levels increase, communication gets difficult creating delays in the time being taken to implement decisions. ≈ Communications can also become distorted as it is repeated through the firm. ≈ Can become expensive

10-25 Tall Organizations Figure 10.9

10-26 Tall and Flat Organizations  Flat structures have fewer levels and wide spans of control. ≈ Structure results in quick communications but can lead to overworked managers. Figure 10.9

10-27 Centralization and Decentralization of Authority  Decentralizing authority ≈ giving lower-level managers and non- managerial employees the right to make important decisions about how to use organizational resources

10-28 Integrating Mechanisms Figure 10.10

10-29 Sources of an Organization’s Culture Figure 10.11

10-30 Employment Relationship  Human resource policies: ≈ Can influence how hard employees will work to achieve the organization’s goals, ≈ How attached they will be to it ≈ Whether or not they will buy into its values and norms

10-31 Strong, Adaptive Cultures Versus Weak, Inert Cultures  Adaptive cultures ≈ values and norms help an organization to build momentum and to grow and change as needed to achieve its goals and be effective  Inert cultures ≈ Those that lead to values and norms that fail to motivate or inspire employees ≈ Lead to stagnation and often failure over time