Management Chapter 10 Managing Organizational Structure and Culture

Groups Tasks into Jobs: Job Design

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Grouping Jobs into Functions and Divisions: Designing Organizational Structure.

... typically managers first decide to group jobs into departments and then design a functional structure to use organizational resources effectively.

Designing Organizational Structure

...organizing is the process by which managers establish the structure of working relationships among employees to allow them to achieve an organization's goals efficiently and effectively.

What is not a characteristic of an Organic Organization?

A stable organizational environment

Liaison Roles

Managers can increase coordination among functions and divisions by establishing liaison roles.

Integrating roles

an integrating role is a role whose only function is to increase coordination and integration among functions or division to achieve performance gains from synergies. Usually managers who perform integrating roles are experienced senior managers who can envisage how to use the resources of the functions or divisions to obtain new synergies.

Hierarchy or authority

an organization's chain of command, specifying the relative authority of each manager.

Flat organization

ex: 3 levels in hierarchy

Organizational Design

is the process by which managers create a specific type of organizational structure and culture so a company can operate in the most efficient and effective way. Two main challenges managers face: MOTIVATING and COORDINATING.

Organizational Culture

is the shared set of beliefs, values, and norms that influence how people and groups work together to achieve an organization's goals.

Formal organizational structure.

more control for managers.

Span of control

the number of subordinates who report directly to a manager.

Allocating Authority

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Organizational Culture

...the second principal issue in organizational design is to create, develop, and maintain an organization's culture.

Roles of the Product Team Manager?

Acts as a facilitator, keeps project within budget, controls financial resources, and keep project on time.

Functional structure

An organizational structure composed of all the departments that an organization requires to produce its goods or services. Possess similar skills or use the same knowledge, tools, or techniques. Managers may tend to view issues from their own relatively narrow departmental perspective which can reduce efficiency and effectiveness. manufacturing; short-term. Product development; long-term.

Divisional Structures: Product, Market, Geographic.

As the problems associated with growth and diversification increase over time, managers must search for new ways to organize their activities to overcome the problems associated with a functional structure.

How should a company promote innovation?

Change the norms.

Technology

Combination of skills, knowledge, machines, and computers that are used to design, make, and distribute goods and services.

Unstable environment?

Decentralize and empower employees. more complex strategy and technology, more highly qualified and skilled workforce, more flexible culture.

Organizational Structure

Different kinds of structure give rise to different kinds of culture; so to create a certain culture, managers often need to design particular type of structure.

In organizations where employees and jobs are grouped by product, teamwork between product divisions often increases and helps the entire organization.

FALSE, competing goals and viewpoints can actually reduce teamwork throughout the entire organization.

When a company decides to expand the scope of its activities through diversification or vertical integration, improved coordination among the different business divisions can be helped by a

FLEXIBLE structure. Best for innovative cultures. Flexible is best when scope of activities is diversified or vertically integrated, helps to improve coordination and different business divisions.

Decentralizing authority

Giving lower-level managers and non managerial employees the right to make important decisions about how to use organizational resources.

Three human resource issues?

How to group jobs into functions and divisions, how to group tasks into individual jobs, and how to allocate authority and coordinate functions and divisions.

Job Enlargement and Job Enrichment

In an attempt to create a division of labor and design individual jobs to encourage workers to perform at a higher level and be more satisfied with their work, several researchers have proposed ways other than job simplification to group tasks into jobs: job enlargement and job enrichment.

The Job Characteristic Model

J. R. Hackman and G. R. Oldham's job characteristics model is an influential model of job design that explains in detail how managers can make jobs more interesting and motivating. 5 Characteristics The more employees feel that their work is meaningful and that they are responsible for work outcomes and responsible for knowing how those outcomes affect others, the more motivating work becomes and the more likely employees are to be satisfied and to perform at a high level. Skill variety, task identity, task significance, autonomy, feedback.

Strategy

Managers decide on a strategy and then choose the right means to implement it. Different strategies often call for the use of different organizational structures and cultures.

Managers can choose which of the following structures to best suit their organizational needs?

Matrix, geographic, product, market, functional, product team, and hybrid.

Four major factors that determine the type of organizational structure or culture that managers select:

Nature of the organizational environment, characteristics of the organizaiton's human resources, technology, and

Determine the design of organizational structure.

Organizational environment, Technology, Strategy, Human Resources.

Managers must design an organizational architecture that makes the best use of resources in order to perform which two managerial tasks?

Organizing, and controlling.

Where does Organizational Culture Come From?

Shaped by the integration of four main factors: the personal and professional characteristics of people within the organization, organizational ethics, the nature of the employment relationship, and the design of its organizational structure. Characteristics of organizational members, organizational ethics, organizational structure, the employment relationship.

Characteristics model

Task significance, autonomy, task identity, feedback, and skill variety.

What determines if technology is routine and its level of complexity?

Task variety and task analyzability.

Autonomy

The degree to which a job gives an employee the freedom and discretion needed to schedule different tasks and decide how to carry them out.

Task significance

The degree to which a worker feels his or her job is meaningful because of its effect on people inside the organization, such as coworkers, or on people outside the organization, such as customers.

Task Identity

The extent to which a job requires that a worker perform all the tasks necessary to complete the job, from the beginning to the end of the production process.

Skill Variety

The extent to which a job requires that an employee use a wide range of different skills, abilities, or knowledge.

Feedback

The extent to which actually doing a job provides a worker with clear and direct information about how well he or she has performed the job.

Coordinating Functions and Divisions.

The more complex the structure a company uses to group its activities, the greater are the problems of linking and coordinating its different functions and division.

Organizational architecture

The organizational structure, control systems, culture, and human resource management systems that together determine how efficiently and effectively organization resources are used.

Job simplification

The process of reducing the number of tasks that each worker performs. Managers must be careful not to take job simplification too far. Can reduce efficiency.

What factors make the functional structure less effective and efficient when the organization expands and produces a wide range of goods?

There is increased difficulty communicating and coordinating between functions, and managers lose sight of organizational goals as they focus exclusively on their own departmental goals.

Integrating and Coordinating Mechanisms.

To increase communication and coordination among functions or between divisions and to prevent these problems from emerging, top managers incorporate various integrating mechanisms into their organizational architecture.

Matrix and Product Team Designs

To operate effectively under these conditions, managers must design the most flexible kind of organizational structure available: a matrix structure or a product team structure. Both of these are the most flexible types of organizational structure.

The minimum chain of command

To ward off the problems that result when an organization becomes too tall and employs too many managers, top managers need to ascertain whether they are employing the right number of middle and first-line managers and whether they can redesign their organizational architecture to reduce the number of managers. Minimum chain of command calls for top managers always constructing a hierarchy with the fewest levels of authority necessary to efficiently and effectively use organizational resources.

Characteristic or organizational members

ULTIMATE source of organizational culture

In a ____ environment, it is critical to have increased levels of communication and coordination among people and functions in order to obtain resources.

Unstable

Task Forces

a committee of managers from various functions or divisions who meet to solve a specific, mutual problem; also called AD HOC COMMITTEE They are temporary, they ay meet on a regular basis or only a few times, when the problem or issue is solved the task force is no longer needed.

Function

a function is s group of people, working together, who possess similar skills or use the same kind of knowledge, tools, or techniques to perform their jobs. each job is essential because it helps the function perform the activities necessary for high organizational performance.

Flexibility facilitates a differentiation strategy by

allowing managers to develop innovative products quickly.

Overall Organizational External Environment

an organization's external environment, strategy, technology, and human resources are the factors to be considered by managers seeking to design the best structure and culture for an organization.

Divisional Structure

an organizational structure composed of separate business units within which are the functions that work together to produce a specific product for a specific customer. Grouping can result in decreased teamwork and failure to cooperate and share information or knowledge with other divisions.

Market Structure (customer structure)

an organizational structure in which each kind of customer is served by a self-contained division; also called customer structure. Can respond to customers and be very flexible. depends on who the customer is. lets managers be responsive to the needs of their customers and allows them to act flexibly in making decisions in response to customers' changing needs.

Product structure

an organizational structure in which each product line or business is handled by a self-contained division. Depends on what goods or services they provide each product division takes responsibility for deciding where to manufacture its products and how to market them in countries worldwide. MANAGERS USE THIS if they decide to diversify with new products or expand their existing product line.

Geographic structure

an organizational structure in which each region of a country or area of the word is served by a self-contained division. Depends on area of the world. managers locate different divisions in each of the world regions where the organization operates.

Matrix Structure

an organizational structure that simultaneously groups people and resources by function and by product. Employees are grouped by functions to allow them to learn from one another and become more skilled and productive. In addition, employees are grouped into product teams in which members of different functions work together to develop a specific product. The result is a complex network of reporting relationships among product teams and functions that makes the matrix structure very flexible. Two managers. to keep the matrix structure flexible, product teams are empowered and team members are responsible for making most of the important decisions involved in product development.

Routine Technologies

are characterized by low task variety and high task analyzability.

Inert cultures

are those whose values and norms fail to motivate or inspire employees; they lead to stagnation and, often, failure over time. Instrumental values of loafing, laziness, and noncooperation. Poor working relationships between the organization and its employees, work norms of output restriction. Two factors: close supervision of employees, and hierarchical authority.

Adaptive Cultures

are those whose values and norms help an organization to build momentum and to grow and change as needed to achieve its goals and be effective. Attempt to avoid layoffs, invest in training and development, link rewards of performance, and emphasize long term employment relationship. empowers employees, utilizes cross functional teams, emphasis on entrepreneurship, respect for employees.

Inegrating role

as a means of increasing communication and coordination among its functions.

Mechanistic form of organization

authority, detailed rules, SOPs, and restrictive norms to guide and govern employee's activities.

Functional Linkage

can be difficult because goals and viewpoints between entities may vary.

Human resource policies

can influence how hard employees will work to achieve the organization's goals and how attached they will be to the organization.

Nonroutine Technologies

characterized by high task variety and low task analyzability.

Human Resources

choice of structure and culture is the characteristics of the human resources it employs.

Organizational architecture

control systems, organizational structure, organizational culture, human resource management.

Divisional structure

creates smaller, more manageable units within the organization.

Highly skilled employees

desire greater freedom and autonomy and dislike close supervision.

Liaison

develops informal relationships that help ease the strain between functions.

Product Team Structure

differs from a matrix structure in two ways: it does away with dual reporting relationships and two-boss employees, and functional employees are permanently assigned to a cross-functional team that is empowered to bring a new or redesigned product to market. retain flexibility of matrix system but do not have to report to two managers permanently assigns emplyees to a cross functional team so that they only report to one manager.

What is the result of the job design process?

division of labor among employees that managers have determined to be the most efficient.

Stable environment?

don't decentralize authority. The structure is formal and controlling; and a culture that prescribes how employees should act in particular situations.

Tall organization

ex: 7 levels in the hierarchy

Matrix structure

groups people by PRODUCT and FUNCTION.

Cross-functional teams

in many cases the issues addressed by a task force are recurring problems, such as the need to develop new products or find new kinds of customers. To address recurring problem effectively managers are increasingly using permanent integrating mechanisms such as cross-functional teams.

Integrating mechanisms..

increase coordination between functions, distribute authority, and increase communication between functions.

What is not an advantage of grouping functions by divisions?

increases the expensive sextra layers of management.

Job Enrichment

increasing the degree of responsibility a worker has over his or her job by, for example, empowering workers to experiment to find new or better ways of doing the job, encouraging workers to develop new skills, allowing workers to decide how to do the work and giving them the responsibility for deciding how to respond to unexpected situations, and allowing working to monitor and measure their own performance.

Division

is a collection of functions or departments that work together to produce the product.

Cross-functional team

is a group of managers brought together from different departments to perform organizational tasks. When managers are grouped into cross-functional teams, the artificial boundaries between departments disappear, and a narrow focus on departmental goals is replaced with a general interest in working together to achieve the organization's goals. counsel and help team members, develop technological innovations that can help improve each team's performance, share knowledge among teams.

Company culture

is a result of its pivotal or guiding values and norms.

Job enlargement

is increasing the number of different tasks in a given job by changing the division of labor. Subway employees make and serve the food. Decreases boredom, and increases motivation.

Job enlargement

is that increasing the range of tasks performed by a worker will reduce boredom and fatigue.

Organizational Structure

is the formal system of task and job reporting relationships that determines how employees use resources to achieve an organization's goals. Three human resource issues: How to group jobs into functions and divisions, how to group tasks into individual jobs, and how to allocate authority and coordinate functions and divisions.

Product team is different from Matrix how?

it does away with dual reporting relationships, and functional employees are permanently assigned to a cross functional team.

More complex organizational deisngs:

matrix structure, and product team structure.

Integrating mechanisms

organizing tools that managers can use to increase communication and coordination among functions and divisions. Increase communication between functions, increase coordination between functions, and distribute authority.

Task and authority relationships

promo specific cultural values and norms to obtain desired attitudes and behaviors.

How should a manager go about encouraging specific attitudes and behaviors within a team?

promote specific values and norms, and create a particular arrangement of task and authority relationships.

Line manager

someone in the direct line or chain of command who has formal authority over PEOPLE and RESOURCES at lower levels.

Staff manger

someone responsible for managing a SPECIALIST FUNCTION, such as finance or marketing.

The Organizational Environment

the more quickly the external environment is changing and the greater the uncertainty within it, the greater are the problems managers face in trying to gain access to scarce resources. If the external environment is stable, resources are readily available, and uncertainty is low, then less coordination and communication among people and functions are needed to obtain resources.

Organizational ethics

the more values, beliefs, and rules that establish the appropriate way for an organization and its members to deal with each other and with people outside the organization. MORALS, BELIEFS, AND RULES

Employment relationship

the nature of the employment relationship a company establishes with its employees via its human resource policies and practices. `

Organizational Structures should be based on

the particular situations and circumstances that their company routinely faces.

Authority

the power to hold people accountable for their actions and to make decisions concerning the use of organizational resources.

Job design

the process by which managers decide how to divide tasks into specific jobs the tasks that have to be performed to provide customers with goods and services. Made up of job simplification, enlargement, and enrichment. Job design leads to division of labor.

Organizational design

the process by which managers make organization choices that lead to an organizational structure.

Organizational Culture

the shared set of beliefs, expectations, values, and norms that influence how members of an organization relate to one another and cooperate to achieve the organization's goals. Employees internalize organizational vales and norms and then let these values and norms guide their decisions and actions.