Organizational Structure & Design Chapter 15: Organizational Behavior 261 Gabrielle Durepos

Reminders for Today Attendance Guest Speaker: Peter Bowler –Wed Oct 19 th –Participation is crucial – I will keep track –Topic: Culture Change and Leadership Midterm exam is on Mon Oct 17 th –Decide on the structure of the exam TODAY –Exam covers chapters: 1, 13, 14, 15 Update on Marking Assignments: –I have 15 assignments marked from BSAD261:12 They take approx. 20 minutes each to mark & I can mark 10 per day –BSAD261:12 will get their assignments back on Mon Oct 17 th –BSAD 261:11 will get their assignments back on Wed Oct 26 th

Outline Toward an understanding of structure and design Contemporary organizational design: –Network or virtual Exercise Mintzberg & five elements of organizational structure Contingency theorists & determinants of organizational structure –Strategy –Size & Technology –Environment Conclusions

Toward an understanding of Structure and Design Organizational Structure: –Stable & formal pattern of relationships –Formal division of labor & formal division of authority to coordinate and control activities Refers to the formal division of TWO TYPES labor: 1.Vertical division of labor : Addresses issues of authority 2.Horizontal division of labor: Addresses issues of task allocation

Contemporary organizational design: Network or Virtual Temporary or permanent arrangement between organizations These companies are otherwise independent Companies produce a product by sharing –Costs –Core competencies Network configurations have no –Organizational chart –Corporate head office Benefit: –Structure enables flexibility, fast response to change Drawback: –Associates have little or no direct control over activities of other organizations Example: Amazon books, Cisco Systems, Dell Computers, Nortel Networks

Exercise: Can you Identify the Structure? 1.Read the article –I need all articles back 2.Draw the organizational chart for PAA 3.You may need to consult your notes from last class 4.Look at your drawing & identify the structure –By function –By division Product / service Geographical location Set of customers served –Matrix –Network or virtual

Henri Mintzberg Five basic elements of organizational structure An organization has 5 core parts which it manipulates to achieve a structure –3 line roles: Top management Middle management Production core –workers who do the work of the organization; making products or servicing customers –2 staff roles: Technical support Administrative support The manipulation of these can take on many structural configuration 4 essential functions to survive include: 1.Product that is developed must have value 2.Major source of income for workers who are engaged 3.Product must be marketed and made available to those who will use it 4.Need financial resources to develop, create and distribute the product

Contingency Theory and Determinants of Organizational Structure: Is there one best way to design an organization? Contingency theorists say: –No; it depends on many factors particular to the organization Structure depends on a mix of variables & context 1.Strategy 2.Size 3.Technology 4.Environment

Determinants of organizational structure: 1 - Strategy Strategy refers to: –Activity or pattern of activities that top leaders perform to accomplish goals This involves: –Evaluating a number of factors that affect the organization through undertaking a SWOT Strengths Weaknesses Opportunities Threats –Making a choice concerning the direction of the organization –Deciding on a structure based on these factors

Determinants of organizational structure: 2 - Size & 3 - Technology Size –How many workers are employed? –As an organization increases in size, so does formalization… Technology –What type of technology is available to the organization –How does this affect the design of work or how workers go about performing their tasks?

Determinants of organizational structure: 4 - Environment Refers to everything outside of the organizations boundaries –Economic, political, social, legal factors affect the organization Mintzberg identifies 4 dimensions of work environments that affect structure: 1.Stability Is it stable (unchanging) or dynamic (unpredictable / constantly changing) 2.Complexity How many factors must the organization monitor within the environment? 3.Market diversity How many clients, products & locations do most organizations in this industry have? 4.Hostility More competition, hostile union-management relationship, fight for resources?

Conclusions Strategy versus structure debates –Which one guides the other? No one best universal structure Must look at multitude of factors to decide: – Which structure enables the organization to complete their tasks effectively and competitively