Organizing for Action Chapter 6 June 13, 2012

Learning Objectives LO 1 LO 1 Define the characteristics of organization structure: organic or mechanistic, differentiation, and integration. LO 2 LO 2 Summarize how authority operates and who generally holds top authority in a company. LO 3 LO 3 Discuss how span of control affects structure and managerial effectiveness. LO 4 LO 4 Explain how to delegate effectively. 6-2

Learning Objectives (cont.) LO5 LO5 Distinguish between centralized and decentralized organizations. LO6 LO6 Define basic types of organization structures, and summarize their strengths. LO7 LO7 Describe important mechanisms used to coordinate work. LO8 LO8 Discuss how organizations can improve their agility through their strategy, commitment to customers, and use of technology. 6-3

Organizing Definition – The deployment of organizational resources to achieve strategic goals – The process by which managers establish the structure of working relationships among employees to achieve goals

Organization Structure The set of formal tasks assigned to individuals and departments Formal reporting relationships Mechanistic (Bureaucratic/Hierarchical) to Organic (Learning/Flat/Horizontal)

Factors Influencing Structure Organizational environment Strategy Technology Human resources

Organizational chart Schematic representation of these arrangements and relationships – The reporting structure and division of labor in an organization 6-7

Conventional Organization Chart

Differentiation Definition – Different units, different tasks, different skills, different ways Specialization Division of labor

Big problem Integration Coordination

Vertical structure Definition Authority

Pyramid Top level – Board of Directors – CEO – TMT Middle managers – Technology – Bad economy Which has led to….

Span of control Definition – Narrow vs wide Huge issue – how many people can any one person effectively manage?

4 direct reports 19 direct reports

Delegation Definition Key distinctions – Responsibility – Authority – Accountability Advantages

Decentralization Centralized organization – An organization in which high-level executives make most decisions and pass them down to lower levels for implementation Decentralized organization – An organization in which lower-level managers make important decisions – Relationship with delegation???? 6-18

Centralized Organization

Decentralized Organization

Horizontal structure

Functional Divisional Matrix

The Functional Organization 6-26

The Divisional Organization 6-28

Matrix Organizational Structure 6-29

The Network Organization 6-30

Coordination Standardization Plans Mutual adjustment

Organizational agility Definition Poster child

Organizational agility Core competencies

Organizational agility Core competencies Strategic alliances

Organizational agility Core competencies Strategic alliances Learning organization

Organizational agility Core competencies Strategic alliances Learning organization High-involvement organization

Organizational size