chapter 11 - chapter outline

Disadvantages of Divisional structure

-can reduce economies of scale and increase costs through the duplication of resources and efforts across divisions. -They can also create unhealthy rivalries as divisions compete for resources and top management attention, emphasizing division needs over broader organizational goals.

Organizational Design includes

A)Contingency in organizational design B)Mechanistic and organic organization designs C)Relationship between strategic needs and structure D)Trends in organizational design (and all terms discussed; e.g., chain of command, unity of command, span of control, how to determine optimal span of control, advantages of delegation, etc...)

Decentralized organization

An organization in which decision-making authority is pushed downward to lower levels of the organization

Centralized Organization

An organization in which high-level executives make most decisions and pass them down to lower levels for implementation

Decentralized with Centralization

Answers the question, where should decisions be made? Trending: Delegation, empowerment, and horizontal structures are contributing to more decentralization in organizations; at the same time, advances in information technology help top managers maintain centralized control.

Advantages of Matrix Structures

Better communication and cooperation across functions. • Improved decision making; problem solving takes place at the team level where the best information is available. • Increased flexibility in adding, removing, or changing operations to meet changing demands. • Better customer service; there is always a program, product, or project manager informed and available to answer questions. • Better performance accountability through the program, product, or project managers. • Improved strategic management; top managers are freed from lower-level problem solving to focus time on more strategic issues.

Empowerment

Delegation that is done well leads to.. -occurs when delegation provides decision-making authority to individuals most capable of doing the work. It builds performance potential by allowing individuals freedom to use their talents, contribute ideas, and do their jobs in the best possible ways

Boundary less organization

Eliminate internal boundaries among subsystems and external boundaries with the external environment Combination of team and network structures + "temporariness" Key requirements:Absence of hierarchy, Empowerment of team members, Technology utilization, Acceptance of impermanence •Encourage creativity, quality, timeliness, flexibility, & efficiency •Knowledge sharing is both a goal and essential component

Summary: Contemporary organizing trends

Fewer levels of management/Flatter structures •Shorter chains of command •Less unity of command •Wider spans of control •More delegation and empowerment -managers assign responsibility, grant authority to act, and create accountability •Decentralization with centralization •Reduced use of staff

Traditional organizational structures include:

Functional structures Divisional structures Matrix structures

Tall Structures

Have narrow spans of control with many levels of management. tall organizations have more managers, they are more costly. less efficient, less flexible, and less customer-sensitive.

Which to Choose: Mechanistic or Organic

Mechanistic designs work in a stable environment(bureaucratic structures with their focus on clear cut division of labor, formal rules and procedures and strict hierarchy of authority are ideal for organizations doing routine tasks in a stable environment ) Organic designs work in a rapidly changing and uncertain environment (Adaptive organizations operate with a minimum of bureaucratic feature and encourage worker empowerment and teamwork)

The trend in Organization Design (contemporary)

Organizations are cutting unnecessary levels of management and shifting to wider spans of control. Managers are taking responsibility for larger teams whose members operate with less supervision. Fewer levels of management/flatter structures -Shorter chains of command •Less unity of command •Wider spans of control

Informal: advantages and disadvantages

PROS:-allow people to make contacts with others who can help them get things done. They stimulate informal learning as people work and interact together -also sources of emotional support and friendship that satisfy members' social needs. CONS: susceptible to rumor, carry inaccurate information, breed resistance to change, and even divert work efforts from important objectives

Organizational Design - definition

Process of creating structures that accomplish mission and objectives •A problem-solving activity that should be approached from a contingency perspective in which the best design is the one that fits the situational features such as the businesses strategic and operational needs

Reduced Use of Staff

Reduced use -- to decrease costs & increase efficiency

Horizontal Organizational Structures includes

Team Structures Network Structures Boundary less and Virtual

What is organization structure?

The way in which the various parts of an organization are arranged It is the system of tasks, workflows, reporting relationships, and communication channels that connect the work and activities of diverse individuals and groups within a firm

Organic - definition

These are horizontal structures that operate with decentralized authority, fewer rules and procedures, less precise division of labor, wider spans of control, and more personal means of coordination. Adaptable goals•Decentralized authority•Few rules and procedures•Wide spans of control•Shared tasks•Many teams and task forces•Informal and personal means of coordination

Trends in Organization Design include

Trends in organizational design - and all terms discussed; e.g., chain of command unity of command, span of control how to determine optimal span of control advantages of more delegation, more empowerment, centralized/decentralized, line vs staff

Team Structures

both permanent and temporary teams: to solve problems, complete special projects, and accomplish day-to-day tasks. cross-functional teams: composed of members drawn from different areas of work responsibility. project teams: that are convened to complete a specific task or "project."

Matrix Structures

combines functional and divisional structures an attempt to gain the advantages and avoid the disadvantages of each by creating permanent teams in a matrix that cuts across functions to support specific products, projects, or programs.

Formal structures: shown in organization chart

it diagrams reporting relationships and the arrangement of work positions within an organization typical organization chart identifies positions and job titles as well as the lines of authority and communication between them. It shows the formal structure, or how the organization is intended to function.

Chain of Command

or the line of authority that vertically links each position with successively higher levels of management.

Functional Structures

people with similar skills and who perform similar tasks are grouped together into formal work units. members share technical expertise, interests, and responsibilities

Delegation

process of distributing and entrusting work to other persons, managers are delegating more

Types under Divisional Structure

product: group together jobs and activities focused on a single product or service;prompts managers to be responsive to changing market demands and customer tastes geographical: group jobs and activities being performed in the same location; used to differentiate products or services in various locations customer: group together jobs and activities serving the same customers or clients; goal is to best serve the diverse needs of different customer groups process:is a group of related tasks that collectively creates something of value for customers;groups together jobs and activities that are part of the same processes

Advantages/Disadvantages of Delegation

self-enhancement bias: this is the tendency to view oneself as more capable, intelligent, and ethical than others. authority-and-responsibility principle states that authority should equal responsibility when work is delegated by a supervisor to a subordinate. Too little delegation overloads manager with work that could be done by others and leaves them with too little time to do their own work.

Informal Structures

set of unofficial relationships between organization members it lies underneath an organization's formal structure show who talks and interacts with whom, regardless of their formal titles and relationships social network analysis (sociometric) is one way of identifying patterns in informal structures and their embedded social relationships

Contingency in Organization Design

situational—including task, technology, environment, and people Ex:A classic bureaucracy is a form of organization based on logic, order, and the legitimate use of formal authority.33 It is a vertical structure, and its distinguishing features include a clear-cut division of labor, strict hierarchy of authority, formal rules and procedures, and promotion based on competency.

Disadvantages of Functional Structures

tendency for each department or function to focus primarily on its own concerns, avoid communications with other functions, and neglect "big picture" issues a sense of common purpose gets lost and self-centered and narrow viewpoints become emphasized. (functional chimneys)

Disadvantages of Matrix Structures

the additional team leaders needed to staff a matrix structure resulting in higher costs. The two-supervisor system is susceptible to power struggles. end up sending conflicting messages and priorities may develop something called "groupitis," where strong team loyalties cause a loss of focus on larger organizational goals.

Span of Control

the number of persons directly reporting to a manager. tall vs. flat

Divisional Structures

this structure puts together people who work on the same product or process, serve similar customers, or are located in the same area or geographical region. common in complex organizations

Mechanistic - definition

vertical structures that typically operate with centralized authority, many rules and procedures, a precise division of labor, narrow spans of control, and formal coordination Predictable goals•Centralized authority•Many rules and procedures•Narrow spans of control•Specialized tasks•Few teams and task forces•Formal and impersonal means of coordination

Flat Structures

wider spans of control that have fewer levels of management. reduces overhead costs and improves agility; it can also be good for workers who gain empowerment and independence because of reduced supervision

functional chimneys or functional silos problem

—a lack of communication, coordination, and problem solving across functions.

Organization charts show

• Division of work— Positions and titles show work responsibilities. • Supervisory relationships— Lines show who reports to whom. • Communication channels— Lines show formal communication flows. • Major subunits— Positions reporting to a common manager are shown. • Levels of management— Vertical layers of management are shown.

Advantages of Functional Structures

• Economies of scale with efficient use of resources. • Task assignments consistent with expertise and training. • High-quality technical problem solving. • In-depth training and skill development within functions. • Clear career paths within functions.

Advantages of Divisional

• More flexibility in responding to environmental changes. • Improved coordination across functional departments. • Clear points of responsibility for product or service delivery. • Expertise focused on specific customers, products, and regions. • Greater ease in changing size by adding or deleting divisions.

Steps of Delegation

• Step 1— The manager assigns responsibility by carefully explaining the work or duties someone else is expected to do. This responsibility is an expectation for the other person to perform assigned tasks. • Step 2— The manager grants authority to act. Along with the assigned task, the right to take necessary actions (for example, to spend money, direct the work of others, or use resources) is given to the other person. • Step 3— The manager creates accountability. By accepting an assignment, the person takes on a direct obligation to the manager to complete the job as agreed.

Virtual Organization

•A special form of boundaryless organization •Operates in a shifting network of external alliances that are engaged as needed, using IT and the Internet

Optimal span of control depends on factors such as

•Degree of routineness•Presence of SOP's•Competence of staff•Similarity of workers tasks•Physical location of subordinates•Amount of support staff available for the manager

Line vs. Staff positions

•Staff positions provide technical expertise for other parts of the organization Trend: Organizations are lowering costs and increasing efficiency by employing fewer staff personnel and using smaller staff units.

Network Structures

•Uses information technologies to link with networks of outside suppliers and service contractors •Core components in house; use of strategic alliances or outsourcing to provide other components