Organization behavior, structure, process 4375 Chpt 14

Distinguishing characteristic of matrix

dual authority conflict between allegiance to functional manager or product manager

Decisions Guidelines on whether authority should be centralized or decentralized

1. How routine and straightforward are the job's or unit's required decisions? Routine decisions- centralized fast food 2. Are individuals competent to make the decision? Not competent- centralize 3. Are individuals motivated to make the decision? Motivation must accompany competency for decentralization 4. Do the benefits of decentralization outweigh the cost?

Reasons to Centralize Authority

1. Managers must be trained to make decisions and training can be expensive, which can more than offset the benefit 2. Mangers accustomed to making decisions and resist delegating authority. Consequently, they may perform at lower levels of effectiveness-delegation involves losing control 3. Admin. costs are incurred because of new or altered accounting performance systems must be developed to provide top mgmt. information about the effects of subordinates decisions 4. Most pragmatic reason to centralize is that decentralization means duplication of functions

Reasons to decentralize Authority

1. Organizations enable mangers to make significant decisions, to gain skills, and advance in company-Decision Making 2. Can lead to a competitive environment. In which managers compete on sales, cost reduction, etc. Positive factor in overall organizational performance 3. Managers with relatively high authority can exercise more autonym, and thus satisfy their desires t participate in problem solving. 4. participate in setting goals - but necessary condition for goal setting is authority to make decisions

Steps to Organizational Design

1. focus on individual jobs- job responsibilities and specialized activity. Most important is DEGREE of SPECIALIZATION. 2. focus on groups of jobs or departments 3. departments/groups size and reporting superior- span of control wide or narrow 4. delegation of authority throughout structure.

Division of labor in organizations can occur in three different ways

1. work divided into personal specialties 2. divided into different activities by natural sequence of the work the organization does. HORIZONTAL SPECIALIZATION 3. Divided along the VERTICAL PLANE. Ex: CEO work is different from the shift supervisor

Mechanistic Model Henry Fayol

4 principals useful in managing a large coal mine 1. Specialization 2. Unity of Direction- jobs should be grouped according to specialty- sales people with sales people 3. Authority and responsibility- Managers delegated authority-lead to centralized authority due to top level managers work being more complex, number of workers involved is greater, and the relationship between action and results is remote. 4. Scalar chain principle- Graded chain of mgmt. ultimate authority to lowest ranks . Chain is route for all vertical communications in an organization

Virtual Organization

Achieves efficiency and flexibility by subcontracting some of its operations to members of a network, including suppliers, distributor's, customers, strategic alliance partner, and even competitors Earlier users Nike and reebok originated in Japan- Term- Keiretsu involves very large financial institution, very large industrial conglomerate, and smaller firms in a net work.

Integration

Achieving unity of effort among different organizational units and individuals through rules, planning, and leadership

Structure as Recurring Activity

Activities performed as consequence of the structure. PATTERNED REGULARITY- persistence and regularity of activities. Certain activities can be counted on to occur routinely This regularly occurring organizational activities is term organizational processes- Communication, decision making, performance evaluation, career, and socialization

Geographical departmentalization

All activities in a given region assigned to one manager.

Company example of decentralizing authority

Best Buy

Functional Departmentalization

Combine jobs according to the functions of the organization. Necessary functions are actives that organizations must do to work. Ex: Production, Sell, Create New Products Found in relatively small organizations providing a narrow range of products and services Widely used in divisions of large multiproduct organizations General Motors

Differentiation

Degree of differences among units of an organization due to individual and structural differences 3 behavioral attributes 1. employees of some depts. would be more or less task orientated than employees in other depts. Fiedlers situational theory 2. Employees of some depts. would have longer or shorter time horizons than members of other depts. -explained by environmental attributes Length of time between action and the feedback of results 3. Some employees more concerned with goal of their department than goals of total organization Mechanistic- shorter time horizons more orientated towards task

Degree of Specialization

Determining span of control at all levels of mgmt. Lower level managers can oversea more employees because work at lower level is more specialized and less complicated than higher levels of mgmt. Actual relationship for determining optimum span of control-Factor

Understanding the relationship between Environmental Uncertainty and structure

Differences is structural designs is due to the difference in the environment al uncertainty each department confronts Production Environment is certain department can be designed to achieve high efficiency R&D Environment is highly uncertain with the ability to be flexible and foresee obstacles

Classic study of Technology and Organ. Design

Joan Woodward Wanted to determine if there were structural differences between more and less effective teams- when they went to compare structure to category no pattern occurred. Then they began to analyze INFORMATION relating to technology- resulted in a continuum of technology between 1) Job-Order Manufacturing 2) Process Manufacturing (Both of these at the extremes) 3. Mass-Production (in the middle) Difference were as follows: 1. Organizations at the ends of the continuum were more flexible- Organic Model- Job duties define. Middle- specialized and formalized- Mechanistic Model 2. Organizations at the ends made greater use of verbal and written communication. Middle- greater use of written communication and more formalized 3. Mgmt. positions were more highly specialized in mass production. Mgmt. positions in Job Order- expected greater technical knowledge. Mgmt. in process manufacturing were expected to have greater scientific expertise 4. Mass production control of production and scheduling separated from supervision of production

The classic study of the relationship between Environment ad Organizational Design

Lawrence and Lorsch. 1. Envrm. demands facing organizations different and how do these demands relate to design of eff. organ.? 2. True that org. in certain or stable envrm. make more exclusive use of centralized authority to make key decisions. why? 3. Same degree of specialization and differences in orientation among indivd. and groups found in organ. ? 4. If greater differences occur- in different industries, do these differences influence coordinating organ. parts? LEAD TO: DIFFERENTIATION INTEGRATION ENVIROMENT

Bureaucracy- mechanistic Model

Max Weber Refers to the particular way to organize all collective activities. Based on his interest in the fact that society develops hierarchies of control s that one group can, in effect, dominate other groups. (Organizational Design has the element) 1. All tasks highly specialized 2. Each task performed to a system of abstract rules to ensure uniformity and coordination of different task. Manger can eliminate uncertainties 3. Each employee is accountable for job performance to one, and only one manager. 4. Each employee relates to other employees/clients in an impersonal, formal manner, maintaining social distance with subordinates and clients. Ensure no favoritism 5. Employment based on technical qualifications and is protected against arbitrary dismissal

Service organizations whose customers demand relatively homogeneous and have little disposition to participate in delivery can be managed by

Mechanistic principles- Ex: retail stores, insurance firms, airlines Integrating activities of relatively undifferentiated functions

Organizational Design

Mgmt. decisions and actions that result in a specific organization structure. Process can be explicit or implicit, it may not be one-shot or developmental Organizational structure depends on the choices that managers make

Required contact

Need for frequent contact and high degree of coordination between superiors and employees Ex: R&D, medical, production Large span of control would preclude contacting employees so frequently Actual relationship for determining optimum span of control-Factor

Span of control

Number of individuals who report to a specific manager. Can be wide or narrow Needs to include not only subordinates, but those who also have access to the manager-chairperson of several committees or task groups

Customers who demand and array of service and are predisposed to participating in service delivery can be managed by

Organic principles Integrating activities of highly differentiated activities this is due to the flexible structure of organic model and the ability to deal with highly uncertain environment Ex: Medical care, legal advice, higher education

Contingency design theory

Organizational design approach that emphasizes the importance of fitting a design to demands of a situation, including technology, environmental uncertainty, and mgmt. choice. Technology major one

Organic Model

Organizational design emphasizing importance of achieving high levels of flexibility and development through limited use of rules and procedures, decentralized authority, and relatively low degrees of specialization.

Mechanistic Model

Organizational design model emphasizing importance of achieving high levels of product and efficiency through extensive use of rules and procedures, centralized authority, and high specialization of labor

Organization structure

Patterns of jobs and groups of jobs in an organization. An important cause of individual and group behavior.

Some organizations from their inception are designed to deal with information processing demands; however most must confront problems subsequently to their creation. If company's discover that present design is incapable of dealing with a demand in changing environment.....

Problem becomes selecting the appropriate adaptive strategy: 1. reduce the need for information 2. increase capacity to process information

Departmentalization

Process in which an organization is structurally divided by combing jobs in departments according to some shared characteristic of basis

Delegation of authority

Process of distributing authority downward in an organization.

Determining managers span of control is not based on the number of interpersonal relationships

Rather, its the frequency and intensity of the actual relationships that are important Three important factors: 1. Required contact 2. degree of specialization 3. Ability to communicate

Structure as an Influence on Behavior

Structure defines the concept as those features of organization that serve to CONTROL or distinguish its parts. All organizations have a structure of jobs. The existence of structure distinguishes organizations.

Contingencies

The demands of a situation

Ability to Communicate

The need to discuss job-related factors influence span of control. People who can clearly and concisely communicate can manage more people than those who cant Actual relationship for determining optimum span of control -Factor

Sociotechnical theory

Unique, yet interdependent, these two dimensions exert a reciprocal influence on one another. Technical- methods of production and equipment used Social- formal and informal work structure that links people to technology and each other. Precursor to TQM Championed teamwork and semiautonomous work groups- resolving such variables can result in higher levels of productivity, quality, and other key performance areas.

Flexible organizations outsource non-core processes

and the product of components and parts and services

The critical managerial consideration when creating departments is

determining the basis for grouping jobs. Bases used to determine departments that report to top mgmt. are important. Basis used at the highest level determine critical dimensions of the organization

Organic Model 2

encourages greater utilization of human potential Provides individuals with sense of personal wealth and motivation Also know as the "one best way" design

Organizational structure importance

has an influence on the behavior of individuals and groups who mare up the organization.

Flattening or Downsizing

has direct implications for span of control decision . Increases the number of non-mangers per manager consequently span of average manager increases

Technology

physical and mental actions bf an individual to change the form or content of an object or idea. Organizational Structure reflect technology in the ways that jobs are designed.

Division of labor

process of dividing work into relatively specialized jobs to achieve advantages of specialization. Jobs can be specialized both by method and by application of the method. Main reason is for economical advantages

Matrix departmentalization

superimposes product or project based design on existing function-based design

Envrm. Uncertainty and Organizational Design in Service sector

two customer attributes; 1. diversity of customer demand for service 2. variation in customer disposition to participate in delivery of service