Chapter 07: Designing Organization Structure

Nat Windom is the chief operating officer (COO) of your company. He has been reading about relational coordination and has learned that it is a "powerful driver of performance when work is interdependent, uncertain and time constrained." He has also read that improving the quality of coordination in this way can improve "quality, safety, efficiency, engagement, learning and innovation." With these benefits in mind, he is very excited about implementing relationship coordination at your company. Nat knows that you have been studying how organizations coordinate the activities of people and departments, and he calls you into his office to ask for your advice.

Employees will be empowered to collaborate directly with each other across organizational boundaries.

The CEO of Alfredo's Sausage is considering moving to a functional structure. What would be the best reason to make such a move?

To gain more control over how the organization operates and centralize decision making

The managers and employees in the manufacturing unit share a common outlook and find it easier to communicate with each other because they have similar training and experience.

Functional Structure

Because each unit, such as the unit serving New England, is relatively small, it can respond quickly to changes in the business environment.

Divisional Structure

Imagine that you have just accepted a job at a company with a matrix structure. The company is a consulting firm that provides business strategy advice to its corporate clients. Employees are assigned to both a functional area and to a customer group division. You are working in the Marketing and Sales department, and you are assigned to the Small Business Accounts division. what's another thing to expect

If the environment is rapidly changing, the company will be able to respond quickly.

Nat Windom is the chief operating officer (COO) of your company. He has been reading about relational coordination and has learned that it is a "powerful driver of performance when work is interdependent, uncertain and time constrained." He has also read that improving the quality of coordination in this way can improve "quality, safety, efficiency, engagement, learning and innovation." With these benefits in mind, he is very excited about implementing relationship coordination at your company. Nat knows that you have been studying how organizations coordinate the activities of people and departments, and he calls you into his office to ask for your advice.

Information will flow across a network of informal relationships rather than primarily through a formal chain of command.

The trend recently has been for organizations to adopt xxx structures, in which employees lower in the hierarchy have more decision-making authority.

more decentralized

Federated Investors has a xxx , with each mutual fund being managed by several portfolio managers who together take responsibility for the fund's performance.

team-based structure

When you examine the organizational chart of a xxx , you find that managers have wide spans of control and fewer layers of reporting relationships between frontline supervisors and senior executives.

flat structure

In a xxx effort, Hallmark reimagined and redesigned the way in which it brought new cards to market, cutting the time from three years to less than one year.

reengineering

Which of the following characteristics would you expect Alfredo's Sausage to have? 2nd

The emphasis in this company is on horizontal communication, which facilitates rapid decision making.

Which of the following characteristics would you expect Alfredo's Sausage to have? 3rd

This organizational structure is particularly effective when operating in an environment that demands flexibility.

Which of the following characteristics would you expect Alfredo's Sausage to have? 1st

Decision making in this company is decentralized, with responsibility pushed to lower levels.

People in manufacturing communicate mostly with other manufacturing employees and relatively little with people in engineering and sales.

Functional Structure

What problem might the CEO expect if the company switches to a functional structure?

The new structure will be slower to respond to changes in the environment.

"I am thinking about decentralizing, allowing employees lower in the organization to make more decisions. When does decentralizing usually make sense?" What's one example

When environmental conditions are changing rapidly and the company needs empowered employees to make decisions quickly

The machinery that Daesun buys is much more efficient than Cedric's machinery, so Daesun often has downtime while he waits for Cedric to shear more sheep.

Drawback

Each worker will become more productive, because he will develop a high level of expertise in his task.

Benefit

If it used to take each man 4 hours to monitor one fifth of the sheep, it now takes Brian less than 20 hours to monitor all the sheep.

Benefit

Human resources is done separately in each of the seven units serving different geographic areas, and having seven smaller HR departments is less efficient than having one.

Divisional Structure

Nat Windom is the chief operating officer (COO) of your company. He has been reading about relational coordination and has learned that it is a "powerful driver of performance when work is interdependent, uncertain and time constrained." He has also read that improving the quality of coordination in this way can improve "quality, safety, efficiency, engagement, learning and innovation." With these benefits in mind, he is very excited about implementing relationship coordination at your company. Nat knows that you have been studying how organizations coordinate the activities of people and departments, and he calls you into his office to ask for your advice.

Employees in different departments or divisions will share information easily.

Imagine that you have just accepted a job at a company with a matrix structure. The company is a consulting firm that provides business strategy advice to its corporate clients. Employees are assigned to both a functional area and to a customer group division. You are working in the Marketing and Sales department, and you are assigned to the Small Business Accounts division. what's one thing you can expect

Two-boss employees will have to resolve conflicts between the competing priorities of their managers.

Your manager has xxx when he has the right to tell you what work to do and to hold you accountable for doing it.

line authority

You would study a business's xxx to see a visual representation of its vertical structure, including the chain of command.

organization chart

When your manager assigns you a task, you have the xxx to carry out that task as assigned.

responsibility

To solve a problem, a manager might establish and lead a temporary xxx of people from different departments. This group would disband once the problem was solved.

task force

"I am thinking about decentralizing, allowing employees lower in the organization to make more decisions. When does decentralizing usually make sense?" What's another example

When running a company which serves different customers in different regions differently