MNGT 1211 chapter 5
Contemporary Organizational Designs
Team structure, matrix and project structure, boundaryless structure
Designing office spaces the three types
The action office 1960 to 1970 The cube from 1980to90s The collaborative office present day.
Delegation
The assignment of authority to another person to carry out specific duties, allowing the employee to make some of the decisions
Departmentalization
The basis on which jobs are grouped together so common tasks can be coordinated
Traditional organizational designs
simple structure, functional structure, divisional structure. These tend to be more mechanistic
Contingency variables that affect structural choice
1. Strategy- structure Goals are important part of an organization strategy structure should facilitate goal achievement. Simple strategy equal simple structure. Elaborate strategy equals more complex structure. Certain structural design's work best with different organizational strategies percent of innovation equals organic percent of cost control equals mechanistic. 2. Size- structure Number of employees affect structure. Large organizations greater than 2000 employees mechanistic. When organization reaches this number size is less influential; adding more employees has little impact and structure is already fairly mechanistic. 3. Technology- structure Used by every organization to convert inputs into outputs. See page 115 4. Environment- structure Environment is a constraint on managerial discretion. Environment also has a major effect on organization structure. Stable environment equals mechanistic structure. Dynamic and uncertain environment equals organic structure.
List the communication process steps
1. The source or the sender encodes a thought. The ability to encode depends on the senders skills, attitudes, knowledge and social cultural system. If the sender Doesn't know a lot about the subject unlikely the message will be successfully transmit it. 2. The message is the actual product that is transmitted example speech or writing, the message travels through a channel to get to the recipient 3. The receiver decode the message and is affected by the skills attitude knowledge and social cultural system of the recipient. 4. Feedback final stage in communication process, and internal check we're by the source I'm sure the recipient receive the message properly.
Organizing
A management function that involves determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be made.
Networked organization
A small Core organization that outsources major business functions. Allows organizations to concentrate on what they do best into contract out activities to companies that specialize in those activities.
Advantages and disadvantages of boundaryless structure - contemporary organizational designs
Advantage is highly flexible and responsive, and draws on talent Wherever it is found Disadvantages: lack of control and communication difficulties
Advantages and disadvantages to the cute farm
Advantages: Cubes offered some privacy and the ability to personalize, businesses found cubicles flexible and affordable Disadvantages cramped quarters 144 ft.² per employee, bad air in artificial light left workers unmotivated and anxious to leave, prairie dog and or the tendency of workers to pop their heads up to communicate with others
Advantages and disadvantages of team structure - contemporary organizational design
Advantages: employees are more involved and empowered and reduces barriers among functional areas. Disadvantages: no clear chain of command, pressures on teams to perform.
Advantages and disadvantage is of the action office
Advantages: flexibility for employers to choose elements, well designed desk spaces gave better access to tools and resources Disadvantages: High quality components were very expensive, open environment was noisy and distracting
Advantages and disadvantages of Matrix - project structure - contemporary organizational Designs
Advantages: fluid and flexible design that can respond to environmental changes, and faster decision making Disadvantages: complexity of assigning people to projects, and task and personality conflicts.
Collaborative office (present day) advantages and disadvantages
Advantages: open designs encourage interaction, workers can adapt to the environment that is best for them, smaller footprint equals lower cost average space per employee is 176 ft.² Disadvantages: open concept offices distract from the ability to be deep in focus, less efficiency in shared spaces
Virtual organization
An organization that has elements of a traditional organization, but also relies on recent developments in information technology to get work done. Consists of a small Core full-time employees and hires temporary workers based on the opportunities in the organization. Could be employees who work from home.
Boundaryless organization/structure Contemporary design
An organization that is not defined by a chain of command, places no limits on spans of control, and replaces departments with empowered teams. Flexible and unstructured. Jack welsh former chair of GE coined the term Mobility within the company
Team structure
An organizational structure in which the entire organization is made up of work groups or teams example google Employee empowerment is crucial Teams are held responsible for all the work and performance results
Matrix structure Contemporary design
An organizational structure that assign specialist from different functional departments to work on one or more projects. Lead by a project Manager. Once a project is complete the specialist returns to their functional departments. Weeds together elements of functional and project departmentalization creating a matrix arrangement. Create a duel chain of command violates the classical organizing principle of unity of command. To work effectively project on functional managers have to communicate regularly coordinate work demands on employees and resolve conflicts together.
Organic organization
And organization that is highly adaptive and flexible Loose structure allows for rapid adjustment Collaborative both vertical and horizontal, adoptable duties, few rules, informal communication, decentralized decision authority, and wide spans of control leading to flatter structure
Mechanistic Organization (bureaucracy)
And organization that is rigid and Tightly controlled Combines traditional aspects of all six elements of organizational structure: high specialization, rigid departmentalization, clear chain of command, narrow spans of control leading to taller structure, centralization and high formalization. Greater than 2000 employees large organizations
Divisional structure
And organizational structure that consists of separate business units or divisions. Each unit or division has relatively low autonomy, with a division manager responsible for performance who has strategic and operational authority. The parent company acts as an external overseer to coordinate and control the divisions.
Functional structure
And organizational structure that group similar or related occupational specialties together
Simple structure
And organizational structure with low departmentalization, wide spans of control, authority centralized in a single person, and Little formalization. Used by small businesses. As the organization grows it adds employees and the structure tends to become more specialized and formalized.
Level one of the communication pyramid
Awareness and requires concise and relevant communication so employees will hear the message. Breakthrough the clutter of information employees receive.
Four levels of the communication pyramid
Awareness, understanding, belief, and commitment
Level three of the communication Pyramid
Belief and requires consistency and evidence so employees will internalize the information and Bayant the rationale for decision making.
Problems involved in outsourcing
Choosing the wrong activities to outsource Choosing the wrong vendor Writing a poor contract** Failing to consider personnel issues Losing control over the activity** Ignoring the hidden costs Failing to develop an exit strategy - moving to another vendor or bring the activity back in the house Some companies formally used as outsourcers are now direct competitors due to globalization.
Five suggestions to be more effective at delegating
Clarify the assignment, specify the employees range of discretion, allow the employee to participate, inform others about the delegation, and establish feedback channels.
Organic model of organizational design
Collaboration both vertical and horizontal, Adoptable duties, Few rules, Informal communication, Decentralized decision authority and Flatter structures
Human Resource Management (HRM)
Controllable elements meaning a factor such as an organizational culture. Uncontrollable elements meaning factors such as economy or government legislation. The ways an organization handle recruitment, training, and the reward system can have a significant impact on the growth and success of the business
Strength and weaknesses of functional structure
Cost saving advantages from specialization, minimal duplication of people and equipment and employees are grouped with others who have similar tasks. Weaknesses pursuing a functional goals can cause managers to lose sight of what is best for the overall organization; functional specialist become insulated and have a little understanding of what other units are doing.
Organizational design challenges
Designing an office space Keeping employees connected Building a learning organization, and managing global structural issues.
Purpose of organizing
Divides work to be done into specific jobs and departments. Assigned tasks and responsibilities associated with individual jobs. Coordinate diverse organizational tasks. Customers jobs into units. Establishes relationships among individuals, groups, and apartments. Establish his formal lines of authority. Allocates and employees organizational resources
Adam Smith
First identified division of labour and concluded that it contributed to increased Employee productivity
Employee Empowerment
Giving more authority to employees to make decisions
Functional departmentalization
Grouping jobs by functions performed Can be used in all types of organizations The functions change to reflect the organizations purpose and work.
Product departmentalization
Grouping jobs by product line Each product area is placed under the authority of a manager
Customer departmentalization
Grouping jobs on the basis of customers who have common needs or problems Enables companies to better understand their customers and to respond faster to their needs
Process departmentalization
Grouping jobs on the basis of product or customer flow Work activities follow a natural process in flow of products or even customers Example hair salons May have separate employees for shampoo and colouring cutting all different processes for having one hairstyle
Geographical departmentalization
Grouping jobs on the basis of territory or geography
Organizational structure
How drug tests are formally divided, group, and coordinated with an organization
Level four of the communication pyramid
Is commitment and requires gaining trust and involvement so employees will have greater ownership for the desired outcome and want to make it happen.
Line managers
Managers responsible for the essential activities of the organization, including production and sales. Have the authority to issue orders to those in the chain of command Examples president, production manager, and the sales manager
Staff managers
Managers who work in the supporting activities of the organization, such as human resources or accounting. Have advisory authority and cannot issue orders to those in the chain of command except in their own department. Example vice president of accounting, human resources manager, and the marketing research manager
What factors affect organizational structure
Mechanistic model or organizational design
Structural characteristics of a learning organization
Members of a learning organization must be able to share information and collaborate on work activities throughout the entire organization - across different functional specialties and different organizational levels. Sharing and collaboration requires that structural and physical barriers be minimal. In such boundaryless environment, employees can work together and collaborate in the organizations work and learn from each other. Second teams tend to be an important feature. Employees work in teams empowered to make decisions about what work needs to be done and to resolve issues. With empowered employees and things the organization has a little need for bosses to direct and control. Managers serve as facilitator supporters and advocates.
Factors affecting organizational structure
No one structure is best. The appropriate structure depends on the organization strategy( innovation, cost, minimization, imitation), it's size, the technology uses (unit production, mass production, or process production), and the degree of environmental uncertainty the organization faces
Major elements of organizational structure
Organizational structure is the formal arrangement of jobs within an organization. Organizational structures are determined by six key elements: work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization. Decisions made about these elements define how work is organized; how many employees managers supervise; where in the organization decisions are made; and whether employees follow standardize operating procedures or have greater flexibility and how they do their work.
Mechanistic Model Of organizational design
Rigid hierarchical relationships Fixed duties Many rules Formalized communication channels. Centralized decision authority Taller structures
Span of control: Appropriate number of employees a manager can efficiently and effectively manage what factors influence
Skills and abilities of the manager, the employees in the characteristics of the work being done. Example the more training and experience employees have the less direct supervision they need Similarity of employee tasks, complexity of tasks, physical proximity of subordinates, the degree to which standardized procedures are in place, sophistication of the organization's IT system, strength of organizations culture and the preferred style of the manager Companies are investing in training so managers can handle a wide span of employees
Simple structure strengths and weaknesses
Strength fast, flexible, and expensive to maintain, clear accountability Weaknesses not appropriate as organization grows, reliance on one person is risky
Strength and weaknesses of divisional structure
Strengths: focusses on results - division managers are responsible for what happens to their products and services Weaknesses: duplication of activities and resources increases cost and reduces efficiency
3BL The triple bottom line
Sustainability, social responsibility and the environment. Urging companies to incorporate these as part of their organizational structure.
Chain of command
The continuous line of authority that extends from the top of the organization to the lowest level and clarifies who reports to whom
Centralization Decision making
The degree to which decision making is concentrated at a single point in the organization. If top managers make your decisions with little or no input from below. A stable environment with more rules and procedures
Formalization
The degree to which jobs within the organization are standardized and the extent to which employee behaviour is guided by rules and procedures. Highly formalized the person has a little freedom to choose what is to be done when and how. Employees are expected to have all the same input the same way resulting in consistent and uniform output. Organizations have explicit job descriptions, numerous organizational rules, define procedures covering work processes. Example employees who print the newspapers they have both time and space constraints that standardize how they do their work. Low formalization: job behaviours are relatively unstructured, employees have a great deal of freedom in how they do that work Example news reporters
Decentralization Decision making
The degree to which lower level employees provide input or actually make decisions. Good with companies facing dynamic environments I need to adapt quickly to change. Example a large university with five Different campuses they treat each as a separate unit
Work specialization
The degree to which tasks in an organization are subdivided into separate jobs; also known as division of labour. The essence is that an entire job is not done by one individual but is broken down into steps and each step is completed by a different person. Each employee does part of an specialized activity. Implemented in the 20th century example henry Ford assembly line. Initially productivity Rose then boredom fatigue stress poor quality increased absenteeism and higher turnover offset the economic advantages. Important organizing method Not a source of increased productivity Jobs are divided up
Unity of command
The management principle that states every employee should receive orders from only one superior Helps preserve the concept of a continuous line of authority Without unity of command, conflicting demands and priorities from multiple managers can create problems
Accountability
The need to report and justify work to a managers superiors
Span of control
The number of employees and manager can efficiently and effectively manage. Wider spans are more efficient in terms of cost, but reduce effectiveness. Employees performance can suffer because managers no longer have the time to provide leadership and support
Responsibility
The obligation or expectation to perform any assigned Duties
Organizational design
The process of developing or changing an organizations structure
Level two of the communication Pyramid
Understanding and requires clear and interactive communication so employees will comprehend the information. Dialogue is key to ensuring employees get the message.
Best practises for ensuring 3BL success in organization includes
The responsibility with senior executives. Establish regular target setting and reporting. Uses employees, partners, and collaborators to leverage 3BL capabilities. Recruit 3BL change agents: champions of change will help and better culture of concern for people, profit and the planet.
Authority
The rights inherent in a managerial position to tell people what to do and expect them to do it
Beyond traditional organizational designs, how else can organizations be structured?
The traditional structures of organizations are simple, functional, and professional. Contemporary organizational designs include team structure, matrix and project structures, and boundaryless organization.
Three structures of 3BL
Traditional model: 3BL is an initiative or a few activities. Minimal resources are allocated, spread across many departments or business units. Federated model: organization has likely created a 3BL business unit and engaged an executive such as chief sustainability officer or responsibility officer. This unit is able to liaison with other business units and starts to align 3BL priorities with business strategy. Embedded structure: 3BL is no longer a separate initiative but integrated into the company's business model, structure and culture. A major source of company competitive advantage.
Common organizational designs
Traditional organizational designs, contemporary organizational designs.
Cross functional teams
Work team is made up of individuals who are experts in various functional specialties
project structure Contemporary design
an organizational structure in which employees continuously work on projects. No formal department That employee returns to after completion of a project. Instead employees take their specific skills and abilities and experiences to other projects. All work in this environment is performed by teams or employees who become part of the project team. Tends to be fluid and flexible organizational design. No departmentalization or rigid organizational hierarchy to slow down decision making. Managers act as facilitators, mentors and coaches they serve the team by illuminating or minimizing obstacles and ensure the team has resources they need to effectively and efficiently complete their work.
