MAN CH13

Functional specialization is the basis for the division of labor

In a bureaucracy, tasks are broken up into positions that are highly specialized. As a result, employees become experts in their jobs and can perform their tasks with skill and efficiency.

5. Mutual adjustment

In constantly changing situations, sometimes employees must disregard formal lines of communication so that they can immediately talk to the person they need in that situation. There is a steady stream of informal communication in this coordinating mechanism.

Organic Organizational Structure

In contrast to a mechanistic structure, an organic structure is characterized by a lack of rules and formal reporting relationships. They are often oases for creativity, as they allow for close collaboration between members of the organization with very different levels of responsibility and functional abilities.

Exploitative-authoritative (System One)

In this style, upper management has total control over the organization, and they force employees to comply under the threat of punishment. This organization style is full of distrust, and downward communication is much more common than upward communication.

There are five main elements of organizational design:

division of labor, departmentalization, span of control, delegation of authority, and coordinating mechanisms.

According to contingency design theories

the appropriate organizational structure is determined by the organization's environment.

Division of labor

the method of breaking work up into specialized jobs that can be handled by individuals.

Resistance to change

(Disadv. of Bureaucracy) ~Members of a bureaucracy generally try to avoid making difficult decisions and frequently avoid responsibility by redefining the problem and sending it to someone else in the organization. ~Bureaucracies are usually unresponsive to external feedback ~The extensive rules focus on controlling current behaviors rather than innovating and creating new products or processes. ~ high number of officeholders that must agree before a change takes place or a major decision is made.

Bureaucratic personality

(Disadv. of Bureaucracy) As a result of the bureaucratic structure, the personalities of some individuals may change in an unhealthy way. Rather than believing in their own principles of right and wrong, members may determine that issues of right and wrong are determined by those in the organization with a higher position of power.

The Peter Principle

(Disadv. of Bureaucracy) The Peter Principle states that in an organization, people tend to be promoted to their level of incompetence. Once they reach the level at which they are performing poorly, they will no longer be promoted and will be stuck in positions that they are not good at. Often, a higher-level position will require a totally different skill set than the position where an employee is currently finding success. For example, a computer programmer may be great at his current job of writing code, but he may not be as successful in a management position if he is promoted.

Means-ends inversion

(Disadv. of Bureaucracy) This refers to the tendency of bureaucracy officeholders to focus on the rules and regulations rather than the actual goals of the organization. While the organization's rules were created to help achieve its goals, focusing on the rules as the end (instead of the means) can get in the way of an organization's goals.

Rigid behavior

(Disadv. of Bureaucracy) While adhering to the policies will protect their jobs, members of a bureaucracy sometimes need to deviate from the rules for irregular situations that are exceptions to the rule.

Technical efficiency

(adv. of bureaucracy) A highly specialized division of labor coupled with high coordination among employees and departments means that a bureaucracy is a very efficient organization method.

Elimination of favoritism

(adv. of bureaucracy) Because bureaucracies are characterized by impersonal relationships among employees and supervisors, there is less room for nepotism, ingratiation, and other types of favoritism.

Avoids impulsive decisions

(adv. of bureaucracy) Because of the strict rules of a bureaucracy, one member cannot implement a completely radical decision and disrupt the organization. Change must be made through coordination with other members of the bureaucracy. When immediate change is necessary, however, this same feature could be considered a weakness.

Technical competence

(adv. of bureaucracy) Members of a bureaucracy are hired and retained because of their skills and experience, not favoritism. As a result, employees tend to be highly skilled and qualified for their jobs.

Predictability in performance

(adv. of bureaucracy) Since the actions of employees are dictated by very specific rules and policies, the outcomes of their work are fairly predictable.

Minimum direction needed

(adv. of bureaucracy) Since the behaviors of employees are dictated by specific policies and standard operating procedures, managers do not need to closely supervise their employees

Job security

(adv. of bureaucracy) Since there are well-defined policies, employees can ensure that they will not be fired simply by following the organization's rules. The increase in job security increases worker loyalty and reduces turnover.

Weber's original version of bureaucracy included:

...

Formalization

A measure of the effects of formal rules and procedures on employee behavior.The type of coordinating mechanism used will usually determine the degree of formalization in an organization. Generally, higher degrees of formalization mean that employees must closely follow stringent rules and regulations, while informal organizations have fewer rules and more leeway. Formal organizations prefer to use direct supervision and standardization of work processes. By contrast, informal firms usually rely on standardization of skills and mutual adjustment.

Records and communications are written down

Administrative acts, decisions, and complaints are recorded and filed away for future reference. This ensures accountability and continuity.

A clear set of rules, policies, and regulations

An explicitly defined set of policies is in place that determines how employees do their jobs.

Customer departmentalization

An organization structure when certain market segments of customers have specialized needs

Product departmentalization

If jobs are grouped by the product (or product line) being produced

Type of task

Complicated and constantly changing jobs usually require a narrow span of control. In contrast, repetitive and uncomplicated jobs that require less supervision can have a wide span of control.

There are many ways to coordinate an organization's members so that low-level employees act in a way that supports the strategic goals of upper management.

Direct supervision, standardization of work processes, standardization of outputs, standardization of skills, and mutual adjustments.

A well-defined chain of command

Each position in a bureaucracy reports to a supervisor, who is selected based on skills and knowledge of the position.

1. Direct supervision

Employees are continually monitored by supervisors to ensure that they are continuously following the firm's rules and policies.

Disadvantage of functional departmentalization

Functional departments are often at odds with one another and usually do not have very strong lines of communication.

The education and experience level of the employees

Generally, the more education and training/experience they have, the less supervision they need, since they are familiar with their position and are usually able to self-monitor.

The dual authority structure

Helps to ensure both quality (functional) and a high number of new products (product).

3. Both managers and their subordinates must aspire to high performance goals.

High-aiming goals should not be imposed on employees; supervisors and their subordinates must work together to form ambitious goals that are challenging yet attainable.

High amount of contact

If a position requires a high amount of contact between the supervisor and subordinates, there should be a narrower span of control (fewer employees under one supervisor).

The communication method

If instructions are relatively straightforward and can be written down and given out via letter, memo, or email, a larger span of control is possible. However, if the job instructions and work-related conversations are complicated, managers would generally be better off with fewer employees working under them.

Suboptimizing

Instead of serving each other, departments may try to achieve success at the expense of the others

Advantage of functional departmentalization

It encourages the specialization of skills, since people with similar jobs work together and usually share expertise and information. In addition, this type of departmentalization also reduces waste, since there is little to no duplication of effort and equipment.

Synergy

Job specialization allows employees to work together and achieve results that are greater than if each member tried to accomplish the tasks alone.

Organizational redesign

Making changes to a structure

Bureaucracy

Max Weber; a rational organizational structure that clearly organized a collection of activities.Using a set of rules and policies, a bureaucracy combines and manages the work of many people in that organization.

A low delegation of authority (or centralization of power)

Means that lower-level managers and employees do not have the power to make decisions and must refer to higher-level supervisors when a situation arises.

A high delegation of authority (or decentralization of power)

Means that managers and employees at the lowest levels have the power to make influential decisions and must take responsibility for those decisions. Report higher rates of job satisfaction

Flaws of the matrix structure

One is that they will typically increase the stress and pressure on employees due to conflicting demands of supervisors, which can cause a lull in productivity. In addition, some employees leverage the matrix structure against their supervisors, playing one manager against the other in order to avoid work or make excuses for a poor deliverable.

Virtual workplace

One type of organic structure; Such structures allow members of the organization to work from remote locations and utilize various types of communication technologies for collaboration on projects. Such organizational structures generally save cost on facilities overhead and lead to higher employee job satisfaction as long as there are regular means by which employees can interact face-to-face.

System Four Model

Rensis Likert; there are four types of management systems

Impersonal relationships

Since business is conducted in an informal manner, no favoritism should be present.

2. Standardization of work processes

Standard operating procedures, stringent rules, and technology can help ensure that employees are performing a task a certain way.

3. Standardization of outputs

The end product has specific standards that must be met. As long as these standards are satisfied, the employees are given leeway with how they complete the deliverable.

Organizational structure

The framework within which an organization arranges its lines of authority and communications. It defines the allocation of rights and duties and determines the manner and extent to which roles, power, and responsibilities are delegated, controlled, and coordinated, and how information flows between levels of management.

Span of control

The number of people that one manager supervises. Size depends on the work at hand.

Organizational design

The process of building the organizational structure.

Hiring and promotion is based on ability and experience

The selection, promotion, and retention of individuals in a bureaucracy should be based on technical competence and experience.

4. Standardization of skills

The tasks that the employees do and the way that they do them are determined by the type and amount of their training.

Mechanistic Organizational Structure

These structures are characterized by formal rules and procedures designed to facilitate the operations of a large-scale complex organization where coordination of activities is critical to success. Ex: bureaucracy

Adv. and Dis. of product departmentalization

This structure usually promotes interdepartmental cohesiveness, and each department is working toward creating and selling a good product. As a result, many of the companies that utilize product departmentalization tend to be customer-focused. Disadvantage-effort and equipment are duplicated, which creates waste.

Consultative (System Three)

This style involves the lower-level employees by giving them the opportunity to give feedback and contribute to decision making.

Participative-group oriented (System Four)

This system is characterized by a decentralized structure, open communication, and a wide base of participation in decision making and goal setting. This style usually requires a high degree of trust between managers and their subordinates.

High specialized jobs

Usually considered more efficient, but if the jobs are too specialized, there may be poor coordination and there may not be enough work for everyone. In addition, some people find highly specialized jobs boring, which could reduce motivation and job satisfaction.

Matrix structure

When an organization combines functional and product departmentalization, it creates a dual structure. One part of the firm is structured around the product, while the other part is organized along functional lines. As a result, each department has two managers: the product manager and the functional manager. Both managers have equal power, but they oversee two different parts of the organization. Ideal when the environment is in constant flux and the departments are dependent on each other for information and resources.

Geographical departmentalization

When an organizational structure is divided into groups based on location.The main advantage of this type of departmental organization is the ease of communication within each geographic division. The disadvantage is that geographical departmentalization does not have the strong points of functional and product departmentalization.

Functional departmentalization

When jobs that are relatively homogeneous are grouped into silos

Benevolent-authoritative (System Two)

While upper management behaves more benevolently than in System One, this style is still characterized by the top management making all of the important decisions by themselves.

Stable environments usually call for______while unstable and uncertain environments usually call for_________

a mechanistic structure; an organic structure

A company's information processing needs relate to the

certainty/uncertainty of its environment

Highly unstable environments tend to require more

differentiation

The two main elements of the ideal form of bureaucracy are

efficiency and rationality

Differentiation

increased division and specialization of the workforce into specific jobs. Many times these specialized departments and divisions will have a closed-minded attitude and will try to compete with other branches of the organization. As a result, firms with high differentiation need to integrate their various branches so that they can coordinate their efforts. This is done by having interdepartmental teams, as well as liaisons who organize and direct activities between different divisions.

2. linking pins

key individuals who form conduits between two or more groups. Linking pins often serve as information disseminators between management and subordinates. This is important because it ensures that the decision-making process at the higher levels includes input from those who will be affected.

1. principle of supportive relationships

means that every organization has a duty to engage its employees in ways that build and maintain their sense of value and importance. At the heart of this philosophy is the dignity of the individual employee. Every employee should be valued as an individual.

Disadvantage of organic structures

require more time and resources to function. In addition, they are less subject to managerial control than mechanistic structures.

An uncertain environment with rapid change typically requires that an organization

take in and process more information (information must be processed because the firm needs to know how the environment has changed). Since organic structures have more channels of communication than mechanistic structures, they are better equipped to deal with increased information processing demands.

Departmentalization

the process of combining jobs into groups or departments. Departments can be based on the job function (accounting, marketing, production, etc.), the product type, or the geographical territory, or can even be separated by customer (or customer group).

Technology

the way(s) that a firm turns inputs into outputs, including the production process, actions, information, and tools that are used.According to the work of Joan Woodward, the technology of a firm should determine its organizational structure.

Situations where a centralized structure is more appropriate:

~Certain shared functions, especially staff functions, are more difficult to execute under decentralization. ~Because many of the units are independent, decentralization may cause jurisdiction-related conflict and arguments over priorities. ~If employees are operating under a decentralized structure, more knowledge, training, and competence are usually necessary. ~Since decentralized units are fairly independent, the decisions made by lower-level employees and managers may not coordinate or integrate with those made by other units in the organization