1. ORGANIZATION SYSTEM, STRUCTURE, AND CULTURE

2. Dr. Crazy’s Problems - 1
Dr. Crazy left his university to open his own management consulting firm
The firm provides training and consulting services on management to organizations in Hanoi
The firm has 4 people – 2 of them are trainers and consultants, 1 is secretary. The firm contracts out outside trainers when needed.
How do Dr. Crazy and his friends organize his firm in order to run his business?

3. Dr. Crazy’s Problems - 2 After 1 year, the firm has many customers
It now has 5 trainers/ consultants and contracts outside trainers if needed
It also has a number of people who help with marketing, accounting, personnel, and administration works
How would Dr. Crazy organize his firm?

4. Functional Departmentalization
Advantages
Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations
Coordination within functional area
In-depth specialization
Disadvantages
Poor communication across functional areas
Limited view of organizational goals
Figure 10.2a

5. Dr. Crazy’s Problems - 3 After 5 year, the firm has a good reputation
It now has 20 trainers/ consultants and contracts outside trainers if needed
It also provides different training/consulting services - management/marketing, financial/investment, and legal – to organizations
How would Dr. Crazy organize his firm?

6. Product Departmentalization
+ Allows specialization in particular products and services
+ Managers can become experts in their industry
+ Closer to customers
– Duplication of functions
– Limited view of organizational goals
Figure 10.2c
Source: Bombardier Annual Report.

7. Dr. Crazy’s Problems - 4
After 10 years, the firm has good reputation internationally
It now provides these services in different countries: Laos, Mainland China, Vietnam, and Cambodia
Different countries require different ways of management: customers/ local trainers/ level of requirements, etc.
How would Dr. Crazy organize his firm?

8. Geographical Departmentalization
Advantages
More effective and efficient handling of specific regional issues that arise
Serve needs of unique geographic markets better
Disadvantages
Duplication of functions
Can feel isolated from other organizational areas
Figure 10.2b

9. Defining Organizational Structure
The formal arrangement of jobs within an organization.
Organizational Design
A process involving decisions about six key elements:
Work specialization
Departmentalization
Chain of command
Span of control
Centralization and decentralization
Formalization

10. Exercise: NEU Structure
Describe the organizational structure of NEU. Compare the structure in 2007 and today.
Evaluate advantages and disadvantages of this structure
Offer your recommendation for improvement

11. The Organization’s Culture
Organizational Culture
A system of shared meanings and common beliefs held by organizational members that determines, in a large degree, how they act towards each other.
“The way we do things around here.”
Values, symbols, rituals, myths, and practices
Implications:
Culture is a perception.
Culture is shared.
Culture is descriptive.

12. Dimensions of Organizational Culture
Exhibit 3.2

13. Benefits of a Strong Culture
Creates a stronger employee commitment to the organization.
Aids in the recruitment and socialization of new employees.
Fosters higher organizational performance by instilling and promoting employee initiative.

14. Organizational Culture
Sources of Organizational Culture
The organization’s founder
Vision and mission
Past practices of the organization
The way things have been done
The behavior of top management
Continuation of the Organizational Culture
Recruitment of like-minded employees who “fit”
Socialization of new employees to help them adapt to the culture

15. Three Dot.Com Companies
How do you describe these companies’ structure, cultures?
How do these companies develop their cultures?
What are the pros and cons of these cultures?

16. The Old and New Ways – Examples from Three Dot.com Companies
The old way The new way
Security Opportunity
Detachment Total commitment
Hierarchy We’re all equal
Work and fun don’t mix Pamper me
It’s just a job It’s so much more