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Division of Labour & Coordination

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1 Division of Labour & Coordination
Subdivision of work into separate jobs assigned to different people Coordination of work Informal communication Formal hierarchy Standardization Formalization Goals/outputs Training/skills J. Player, New York Times

2 Writing topics How is your organization structured?
Who reports to whom? Why do you think it is structured in this way? What works? What doesn’t work? What would help the organization function better given the contingencies of org structure.

3 Organizational Structure and Design
Chapter 16

Dimension Low High Degree of specialization General tasks Highly specialized tasks Typical organizational size Small Large Economic efficiency Inefficient Highly efficient

5 Elements of Organizational Structure
Department- alization Span of Control Organizational Structure Elements Formalization Centralization

6 Span of Control Number of people directly reporting to the next level
Assumes coordination through direct supervision Wider span of control possible when: with other coordinating methods employees perform similar tasks tasks are routine

7 Tall versus Flat Organizations: Comparison
Chief Executive Tall hierarchy Relatively narrow span of control Chief Executive Flat hierarchy Relatively wide span of control

8 Forces for (De)centralization
Organizational crises Management desire for control Increase consistency, reduce costs Centralization Complexity — size, diversity Desire for empowerment Decentralization

Low Decentralization High decentralization (High centralization) (low centralization) Eliminates the additional respon- Can eliminate levels of management, sibility not desired by people making a leaner organization performing routine jobs Permits crucial decisions to be Promotes greater opportunities for made by individuals who have decisions to be made by people closest the “big picture” to problems

10 Formalization The degree to which organizations standardize behaviour through rules, procedures, formal training and related mechanisms. Strengths and limits?

11 Mechanistic vs. Organic Structures
High formalization Narrow span of control High centralization Organic Low formalization Wide span of control Low centralization

A bird’s eye view Structure Dimension Mechanistic Organic Stability Change unlikely Change likely Specialization Many specialists Many generalists Formal rules Rigid rules Considerable flexibility Authority Centralized in Decentralized, diffused few top people throughout the organization

13 Effects of Departmentalization
How are employees and their activities grouped together? Areas of common supervision Establishes work teams and supervision structure Creates common resources, measures of performance, etc Encourages informal communication among people and subunits 5 pure types of departmentalization…

14 Simple Few employees reporting directly to one person (owner) Owner

15 Functional Organizational Structure
Organizes employees around skills or other resources (marketing, production) Create subordinate goals President Finance Production Marketing

16 Divisionalized Structure
Organizes employees around outputs, clients, or geographic areas President Enterprise Systems Laserjet Solutions Consumer Products

17 Project-Based Matrix Structure
Employees are temporarily assigned to a specific project team and have a permanent functional unit President Engineering Manager Marketing Manager Software Manager Project A Manager Project B Manager Project C Manager

18 HYBRID structures Parts are combined to maintain balance of power and effectiveness across functional, product, geographic and client focused units

19 Features of Team-Based Structures
Structure is built around Self-directed work teams rather than individuals Teams organized around work processes Very flat span of control Very little formalization Most supervisory activities are delegated to the team Usually found within divisionalized structure Very responsive and flexible; empowerment is high; reduced need for managers; time consuming; ambiquity

20 Network/Virtual Organizational Structure
Product Development Firm (France) Marketing Firm (U.K.) Core Firm (Canada) Customer Service Firm (U.S.A.) Production Firm (China) Accounting Firm (Canada)

21 Contingencies Organizational size Technology External environment
Organizational strategy

22 Types of Organizational Technology
Assembly Line Engineering Projects High Analyzability Skilled Trades Scientific Research Low Analyzability Low Variety High Variety

23 Org. Environment & Structure
Dynamic • High rate of change • Use team-based, network, or other organic structure Stable • Steady conditions, predictable change • Use mechanistic structure Complex • Many elements (such as stakeholders) • Decentralize Simple • Few environmental elements • Less need to decentralize

24 Org. Environment & Structure (con’t)
Diverse • Variety of products, clients, locations • Divisional form aligned with the diversity Integrated • Single product, client, location • Don’t need divisional form Hostile • Competition and resource scarcity • Use organic structure for responsiveness Munificant • Plenty of resources and product demand • Less need for organic structure

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