MGW1010 Week 6 Managing Organisational Design

Contemporary designs: team structures

- on top of functional structures - task forces/teams made up of representatives from functional structures such as manufacturing, sales, finance, etc - looks specifically to a certain innovation or to advocate for certain important initiatives (eg for COVID; for equality across diff members of organisation, irrespective of gender etc)

divisional structures

departments represent the unique products, services, customers, or geographic locations the company is serving - basically created smaller/more manageable

Article by Rivera & Stainback (2020) - Covid 19: confidently navigating through the corona virus crisis, PWC; organisational design in times of crisis: CREATE A DEDICATED CRISIS TEAM

senior level oversight - and internal cohesion among cross-functional teams, grounded in preparation, training and testing - are key to good outcomes (looks at issues with different perspectives)

Article by Rivera & Stainback (2020) - Covid 19: confidently navigating through the corona virus crisis, PWC; organisational design in times of crisis: ESTABLISH THE FACTS

strong data also reinforces a central element of crisis planning - exploring different scenarios and how they could affect the business in the short, medium and long term (play it out)

bureaucratic (mechanistic) VS adaptive (organic) design

- Goals: predictability (dw variance, wants uniformity/standardisation) vs adaptibility - authority: centralised vs decentralised - rules and procedures: many vs few - spans of control: narrow (micromanage) vs wide (less strict monitoring; works well with highly experienced, independent employees) - tasks: specialised vs shared - teams and task forces: few vs many - coordination: formal and impersonal vs informal and personal

What is organising as a management function?

- arranging ppl and resources to work together to accomplish a goal (ultimate purpose for org) - organisation structure (another meaning of management function): system of tasks, reporting relationships , and communication linkages - when managers develop or change an organisation's structure, they are engaged in organisational design - organisational design is the process of creating structures that accomplish mission and objectives

Metrics structures: advantages

- better cooperation across functions (leverages on their different kinds of expertise and dimensions) - improved decision making - increased flexibility in restructuring - better customer service - better performance accountability - improved strategic management

functional structure: branch bank setting

- can be segregated or organised based on different aspects of their services - Branch manager -> manager in terms of giving loans, investments, operations and the unit trusts

team structures: disadvantages

- conflicting loyalties among members (tightness is specific to the teams) - excessive time spent in meetings (inefficient when it comes to meeting deadlines; unhelpful team members; lots of time spent on coordination and meetings; sometimes translations are needed for the sake of equal interpretation -> not necessarily in languages only, but also discipline expertise, jargon) - effective use of time depends on quality of interpersonal relations, group dynamics, and team management

network structures: disadvantages

- control (quality) and coordination problems may arise from network complexity - potential loss of control over outsourced activities (standards of service/performance; risk involved in customer data/even own employee data for human resource outsourcing) - potential lack of loyalty among infrequently used contractors - excessively aggressive outsourcing can be dangerous

organic design

- cross functional teams - cross hierarchical teams - free flow of information - wide spans of control - low formalisation - decentralised (decision-making is largely autonomous; teams will make decisions under a certain framework of accountability)

Divisional structures: disadvantages

- duplication of resources and efforts across divisions - competition and poor coordination across divisions - emphasis on divisional goals at expense of organisational goals; therefore coordination towards the unified goal of the organisation can be compromised as well

team structures: advantages

- eliminates barriers between operating departments - improved morale - greater sense of involvement and identification - increased enthusiasm for work - improved quality and speed of decision making

network structures: advantages

- firms can operate with fewer full-time employees and less complex internal systems - reduced overhead costs and increased operating efficiency - permits operations across great distances; shows the kind of outreach that is far greater than what they could have done alone

Divisional structures advantages:

- group together people who work on the same product/process, serve similar customers, and/or are located in the same area/geographical region - common in complex organisations

Metrics structures

- has multidimensional layers (can actually be based on functional areas; at the same time they have simultaneous project dimension -> only one example of a possible metrics structure) - one staff member can be reporting to two managers or more; same time, this person also reports to project manager of a particular project that is assigned

Mechanistic design (prominent in the earlier 19th century; very hierarchical)

- high specialisation (clear division of labour) - rigid departmentalisation (clear segregation of responsibilities) - high chain of command - narrow spans of control - high formalisation - centralised (top management making most of the decisions)

Contemporary designs: network structures

- operates as part of the sharing economy - central core (eg like Grab, central core would be its full time employees) - has many networks/outside contractors/partners supplying the essential key services to the customers (drivers) - central core is usually rather small; keeps things stable - network partners are quite expansive and reaches out to the market base they serve in (provides firm with agility/flexibility) - eg Airbnb -> integrates diff partners and home owners - leverages on strategic alliances and also outsourcing contracts (largely so that it can reduce overhead cost and increase efficiency for these companies)

Article by Rivera & Stainback (2020) - Covid 19: confidently navigating through the corona virus crisis, PWC; organisational design in times of crisis: COLLABORATE - INTERNALLY AND EXTERNALLY

- public relations and communications teams (to convey important messages to stakeholders in a timely manner) - legal and regulatory teams (unique situations that arise with prices) - operational response teams

functional structures: disadvantages

- sense of cooperation and common purpose break down (difficult to communicate across departments; esp if org grows more domestically/internationally) - narrow view of performance objectives (managers can become very preoccupied with their own departments; conflicts could occur; lose sight of org goals -> reduce efficiency and effectiveness)

what can the organisation chart tell you?

- specialisations/ division of work that is involved in company - supervisory relationships - communication channels (if there are new product developments/customer grievances, who to report to?) - major subunits/business units - levels of management (many levels/hierarchical? or flatter organisation structure?)

functional structure: community hospital setting

- structure is based on medical staff - administrator -> directors in medical staff, nursing, clinics and patient services

Metrics structures: disadvantages

- two-boss system is susceptible to power struggles, task confusion and conflict in work priorities (violation of unity of command by Fayol's principles - should only have one boss) - strong team loyalties cause a loss of focus on larger organisational goals (more of project identity than organisational identity; more attached to client/team)

Traditional structures: functional structure

- very common - type of structure where the people in the organisation are structured according to similar skills and knowledge-based in terms of the specific discipline that they are trained in - highly specialised

Key Considerations in organising

- what tasks are to be done? - who will do them? - how will the tasks be grouped? - how will the activities be coordinated? - where will decisions be made? - who will report to whom? - who is accountable for decisions (who should be a supervisor for junior staff etc)?

Challenges faced in today's organisational designs: managing global structural issues

- when designing/changing structure, managers may need to think about the cultural implications of certain design elements (how will people/employees respond to diff kinds of structures imposed?) - formalisation may be more important in less economically developed countries and less important in more economically developed countries where employees may have higher levels of professional education and skills

organisation chart

a diagram describing reporting relationships and the formal arrangement of work positions within an organisation; can derive the specialisations or division of work that are involved in a particular company

functional structures: advantages

advantages: - economies of scale (efficiency); bc when people are structured according to similar expertise, similar skill sets and knowledge-based, easier for managers to monitor and evaluate performance - task assignments are consistent with expertise and training (same jargon, easier communication) - high-quality technical problem solving - in-depth training and skill development - clear career paths within functions (know what to expect when it comes to professional development; provides better scope of managing staff development in terms of career path advancement, and skill development)

Contingency theory perspective in organisation design

firstly, CT is about how there is no one best style of management - when is bureaucracy a good choice for an organisation? when it isn't, alternatives? - ENVIRONMENT determines the most appropriate design: - mechanistic designs work in STABLE environment (very relevant still; gov sector/public organisations/higher education sector/manufacturing firms); is a strategy for cost-reducing purposes - organic designs work in a RAPIDLY CHANGING and UNCERTAIN environment - adaptive organisations operate with a minimum of bureaucratic feature and encourage worker empowerment and teamwork

Divisional structures examples: process

focus: activities part of same process example catalog sales manager -> product purchasing, and order fulfillment

Divisional structures examples: customer

focus: customer or client serviced example: agency administrator -> problem youth, and senior citizens

Divisional structures examples: product

focus: good/service produced example: general manager -> grocery products (have their own staff), and drugs and toiletries (have their own staff)

Divisional structures examples: geographical

focus: location of activity example: president -> asian division, and european division

Challenges faced in today's organisational designs: keeping employees connected

mobile computing and communication technology have given organisations and employees ways to stay connected and to be more productive (how to maintain identity and connectivity?); BUT need to consider employee isolation mental health and wellbeing of employees must be taken into consideration

functional structure: business setting

president -> vice presidents could be based on marketing, finance, accounting, production, logistics, wholesale service, HR or facilities