4.basic orgn design

8/3/2019 4.Basic Orgn Design

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Organization Organization

The framework Developments in

for dividing, or changes to

assigning, and the structure of

coordinating work an organization


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ey e e s

orSpecialization

ut or ty anResponsibility

Chain Centralization vs.of Command Decentralization

DepartmentalizationSpan of Control


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Jobisbrokendownintoanumberofsteps

H

igh

individuality

Makesefficient

use

of

the

diversity

of

skills

thatworkershaveroducti

Work Specialization HighLowLow


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e

a n

o

ommane xecu veOfficer

ExecutiveVice President

ExecutiveVice President

President

VicePresident

VicePresident

VicePresident

VicePresident

VicePresident

Region1

Region2

Region3

Region4

Region5

DistrictA

DistrictB

DistrictC

DistrictD

DistrictE

DistrictF

DistrictG


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pan

o

on ro

Numberofemployeesthatanmanagercan

Increasedoverthelastseveralyears

Contingencyvariables

impact

number


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u or y

vs.

espons y

Rightsinherentin

mana erial

ositionto

Obligationtoperform

giveordersandexpectthemtobefollowed

withauthority

Relatedto

ones

characteristicsof


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The

Concept

of

Authority

Chief Executive

MarketingHuman

ResourcesProductionAccountingFinance

Research and

Development


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ne

u or y

Levelofauthoritythatentitlesmanagerto

Contributesdirectlytotheachievementof

organ za ona

o ec ves


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The ConceptThe Concept

of Powerof Power

AuthorityLevel

The PowerCore

Accounting

Resources

MarketingResearch and

DevelopmentProduction

unc on


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CoerciveCoercive

ReferentReferent RewardReward

xpertxpert Leg t mateLeg t mate


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TheDegreeofCentralization

HigherLower

en

tDecentralizationDecentralizationtrol

ower

entCo

eeEm

nagem

Emplo

TopM

Hi her

Centralization

Lower


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ve

ays

o

epar men a ze

Functional

Customer

Geographic


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Structure

MECHANISTIC

ORGANIC

oll bor tion

both

relationships

verticalandhorizontal)

A t ble uties

xe

u es Formalcommunication

Information

communicationchannels

Centralizedauthority

Decentralized

uthorize


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trategy

Contin encFactors and

rgan za on Technology

nv ronmen aUncertainty


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ewDe artments

e pansof Control

The Simple

tructure

AuthorityFormalization


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e

ureaucracy

StructureStructure


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ClearAccountabilit

Cross-FunctionalCoordination

The Matrix

tructure

of Specialists

of Command


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a r x

ruc ure

amp e


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The Team-Based

Structure

Hold TeamsEmpowerunm y

of Work

Decisions


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Globalizationofmarketsandcompetitors

Needforrapidinnovation


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Or anizational Desi nBoundarylessTeams

Empowerment

Information SharingOpen

Organizational CultureStrong mutual relationships LEARNING

me y

Accurate

ense o commun y

CaringTrust

ORGANIZATION

LeadershipShared vision

Source:Management, Seventh Canadian Edition, by Stephen P. Robbins, MaryCoulter, and Robin Stuart-Kotze, page 231. Copyright 2003. Reprinted by

permission of Pearson Education Canada Inc.


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CULTURE?

Systemofsharedmeaningwithinanorganizationthatdeterminestoalargeextenthowemployeesbehaveand

act


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Dimensions

of

Organizational

Groupemphasis Conflicttolerance

Peoplefocus

Unitinte ration Means

end

Control Opensystems Risktolerance ocus


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Constrainswhatmanagerscanandcannotdo

Culturehasalinkbetweenvaluesand

managerialbehaviour

what

is

acceptable

andnot


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.

Predictability

Consistency

Internalguidelines


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ARECAP


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ENTERPRISE


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Structure?

S ecificationof

the

obs

to

be

done

withinanorganizationandthewaysin.

allowsthe

organization

to

achieve

its

goals. Atsomeorganizationsthe

structureis

ri id

at

other

it

is

more

flexible.


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..OrganizationalstructurevariesaccordingtoaOrganizationalstructurevariesaccordingtoa

,

,

,

,

.

.

Size,technologySize,technology,and,andchangesinenvironmentalchangesinenvironmentalc rcums ancesc rcums ances a so n uences ruc ure.a so n uences ruc ure.

Although all organizations have the same basic

,contributes to the most efficient operations.


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throughan

OrganizationChartDia ram

de ictin

a

com an s

structure

and

showin

em lo ees

where

theyfitintoitsoperations

TheformalOrganizationchartalsoreflectsthe

ChainofCommand

Reporting

relationships

within

a

company


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TheOrganizationalChart

Contemporary Landscape Services, Inc.

Mark Ferguson

Retail ShopManager

NurserManager Operations

Manager

BuyerOffice

Mana erBuyer Supervisor

Residential

Mana er

Commercial

Mana er

66 -- 3232


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TheBuildin Blocksof

OrganizationalStructure

Thefirststepindevelopingthestructureofany

Specialization

Determining

who

will

do

whatDepartmentalization

Determininghowpeopleperformingcertaintasks

canbest

be

grouped

together


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Inaverysmallorganization,theownermay

performevery

job.

Asthefirmgrows,however,sodoestheneedtospecializejobssothatotherscanperformthem.

am m n177 scovere eac o enworkers

did

all

the

steps

of

making

pins

each

groupcouldmake48,000aday.

Rememberalso

that

or anizations

can

overdo

specialization. Why?


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Departmentalization

ProfitCenter

andprofits

Somecompanyoperationsdonotgenerate


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Departmentalization

CustomerDepartmentalization

likelytobuyagivenproduct

Departmentalization

according

to

specific

products

bein created

ProcessDepartmentalization

usedtocreateagoodorservice


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GeographicDepartmentalization

business

Departmentalization

according

to

groups

functions

or

activities

M lti l F f D t t li ti


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MultipleFormsofDepartmentalization

President

Functional DepartmentalizationFunctional Departmentalization

Marketing

Production

Finance

Geographical DepartmentalizationGeographical Departmentalizationexas an

Manager

regon an

Manager

or a an

Manager

Product DepartmentalizationProduct Departmentalization

66 -- 3838

onsumer

Products

n ustra

Products

onsumer

Products

n ustra

Products

onsumer

Products

n ustra

Products


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Establishin the

DecisionMaking

Hierarchy

Whomakeswhichdecisions?The answer almost never focuses on an

individual or even on a small group. Themore accurate answer usually refers to the

- .


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DevelopingaDecisionMaking

Hierarchy

Assi nTasks: Determine

who

can

make

decisionsandspecifyhowtheyshouldbe

.

Givethe

authority to

make

decisions

and

the

respons y oro ga on oma e em.Authorityandresponsibilitygohandinhand.


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havebeenmade. Thisinvolves

Delegation

Assignmentofatask,responsibility,orauthorityby

a

manager

to

a

subordinateAccountabilit

Liabilityofsubordinatesforaccomplishingtasks

assi nedb

mana ers


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Manymanagers

actually

have

trouble

delegatingtaskstoothers.

wherethe

owner

manager

started

out

.


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have

trouble

delegating

effectively?

Theyfeelthatemployeescanneverdoanythingas

wellas

they

can.

Theyfearthatsomethingwillgowrongifsomeone.

The lacktimeforlon ran e lannin becausethe areboggeddownindaytodayoperations.

Theysensetheywillbeinthedarkaboutindustrytrendsandcompetitiveproductsbecauseofthetime

.


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to

delegate

effectively?

Admitthattheycannevergobacktorunning

prosperwiththehelpoftheiremployees.

Theymustlearntoletgo.

Four reasons some managers in big


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Fourreasonssomemanagersinbig

companies

dont

delegate

as

much

oraswellastheyshould:

Theyfearthatsubordinatesdontreallyknowhowto

The fearthatasubordinatemi htshowthe

managerup

in

front

of

others

by

doing

a

superb

job

Theydesiretokeepasmuchcontrolaspossibleover

howthingsaredone

Theysimplylacktheabilitytoeffectivelydelegatetoot ers

Howcanmanagersinbigcompanies


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g g p

Allmanagersshouldrecognizethattheycantdo.

thattheycanassumemoreresponsibilityinthefuture.

Managers

should

recognize

that

if

a

subordinate

performswellitalsoreflectsfavorablyonthemanager.

Amanagerwhosimplydoesntknowhowtodelegates ou

see

spec a ze

tra n ng

n

ow

to

v e

up

an

assigntaskstoothers.


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DistributeAuthorit : Determinewhetherthe

organization

is

to

be

centralized

ordecentralized.

CentralizedOrganizationOrganizationinwhichmostdecisionmakingauthorityisheldbyupperlevelmanagementecen ra ze rgan za onOrganizationinwhichagreatdealofdecisionmakingauthorityisdelegatedtolevelsofmanagementatpointsbelowthetop Thisisthecurrenttrend.

pano ontroNumberofpeoplesupervisedbyonemanager

FlatOrganizationalStructure Vertical


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g

.

Characteristicofdecentralizedcompanieswithrelativelyfew

Chief Partner

Partners

Associates

Relatively wide span of control55 -- 4848

Tall United States ArmyUnited States Army


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Structure

eneraenera

Characteristicofcentralized

MajorsMajors

layersofmanagementandrelativelynarrowspansof

Captains &Captains &

LieutenantsLieutenantscontrol

WarrantWarrantOfficersOfficers

SergeantsSergeants

e at ve y narrow span o

control.

CorporalsCorporalsAt lower levels, where

tasks are similar and

PrivatesPrivates55 -- 4949

simpler, span of control

widens.

Line and Staff OrganizationLine and Staff OrganizationLine do theLine do the


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LineandStaffOrganizationLineandStaffOrganizationLinedotheLinedothe

Clark Equipment Corp.mainline

functions/Staff

assist

mainline

functions/Staff

assist

ResourcesDepartment

EngineeringDepartment

StafStaf

ManagersManagers

Earthmovers Division

Division

DivisionManagersManagers

MaterialsDistribution

66 -- 5050

Handling


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HorizontalOrganizationalsobecomingmorepopular.

Authorit

ranted

to

committees

or

work

teamsinvolvedinafirmsdailyoperations

Basic Forms of


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BasicFormsof

OrganizationalStructure

Organizationscanstructurethemselvesinalmostan

infinitenumber

of

ways

based

on

the

specialization,

departmentalization,ordecisionmakinghierarchies.

Thefourbasicformsoforganizationalstructurethatreflect

the

general

trends

followed

by

most

firms

are:

FunctionalFunctional

DivisionalDivisional

MatrixMatrix

InternationalInternational


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Formofbusinessorganizationinwhichauthority

s eterm ne yt ere at ons ps etweengroupfunctionsandactivities

Com an Structured Around Basic Business Functions

Marketing Operations Finance

epar men epar men epar men


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Organizationalstructure

in

which

corporate

v u u u

underthelargercorporateumbrella

Food Service Infant Foods Condiments

Star-Kist Tuna Frozen-Foods Misc. ProductsDivision Division Division Division

producing and marketing its own productsproducing and marketing its own products

Matrix Organization


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MatrixOrganization

Organizationalstructureinwhichteamsareformedan eammem ersrepor o woormoremanagers

A matrix is a highly flexible form that is

readily adaptable to changing circumstances.

Matrix structures rely heavily on committeeand team authorit .

Some companies use the matrix organization

project. The end of the project usually means

Martha StewartMatrix Organization at


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g

Area

S ecialists

Media Group Merchandising Group

Magazin

Boo

ks

Interne

Rad

io/

Newspa

Netw

or

CableT

K-martLi

Sears

Pa

Cata

lo

Lin

e

Specialt

Reta

ilins

er

/ neint

/

Cooking

Entertainment

Weddings

Crafts

Gardening

Home

Holida s

66 -- 5656Children

InternationalOrganization


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g

Approachestoorganizationalstructuredeveloped, ,

andsellinglobalmarkets

CEO

Division A

Division B

Division

LatinEuro e Asia


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21st Century

BoundarylessOrganizations minimizeoreliminate

traditional

boundaries

and

structures.

TeamOrganizationshaving littleornounderlyingfunctionalhierarchyandrelyalmostexclusivelyonprojecttypeteams.

VirtualOr anizations havelittleornoformalstructure.Theytypicallyhaveonlyahandfulofpermanentemployees,averysmallstaff,anda

mo es

a m n s ra ve

ac y.

VirtualOrganization


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Contracted Contracted

in Asia

Services

Accounting

HumanCore

Or anization

Finance Operations

Management

ContractedDistribution &

ContractedSales &

66 -- 5959


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thatcanbeseenandrepresentedinchartform.

e

n orma

organ za on w nw c

peop e

dotheirjobsindifferentwaysandinteractwitho erpeop e nways a ono o ow orma

linesof

communication.

The informal or anization is sometimes ust aspowerful, if not more powerful, than the formal

structure.

FormalversusInformal


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Organizational

Systems

Groupsofpeoplewhodecidetointeractamong

t emse ves

rapev ne

Informalcommunicationnetworkthatrunsthrough

anorganization


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RestructuringanOrganization

Restructuring referstotheprocessbywhich

mana erschan etaskandauthorit

relationships

to

improve

organizational

effectiveness.

One

t e

of

restructurin

that

has

become commoninrecentyearsisdownsizing.


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Downsizing istheprocessbywhichmanagers

andlayoffmanagersandworkerstoreduce

withrestructuringanddownsizingarethe

useo

empowere

wor ers,

se

manage

teams,andcontingentworkers.


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Empowerment istheprocessofgiving

authoritytomakeimportantdecisions.

Selfmanaged

teams are

work

groups

that

cons s o peop ew oare o n yrespons e

forensuringthattheteamaccomplishes

itsgoals

and

who

lead

themselves.


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Contingentworkers areemployedfor

whoreceivenoindirectbenefitssuchas

ea nsuranceorpens ons.

TheNetworkBasedForm


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Advantages Disadvantages

Enableshighlyflexibleandadaptiveresponses

Difficulty managing lateral

relationships across

Createsabestofthebestfirmtofocusresourcesoncustomerandmarketneeds

autonomous organ zat ons

Difficulty motivating

Eachorganization

can

leverageadistinctive

mem ers o re nqu s

autonomy to join network

competency

Permitsrapidglobalbenefits can be problematic

Canproducesynergisticproprietary knowledge and

technology

Cummings & Worley, 8e (c)2005 Thomson/South-Western14-66

TheDownsizin Process


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Clarifytheorganizationsstrategy

Assessdownsizin

o tions

and

make

relevant

choices

Implementthechanges

Followthrough

with

growth

plans



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. . integrationoftwoorganisatoins

.

revenues.

.

structuredescribe

above

. shouldbeleanerandmoreflexible.


TheReengineeringProcess


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Pre aretheor anization

Specifytheorganizationsstrategyandobjectives

Identifyandanalyzecorebusinessprocesses

Define erformanceob ectives

Design

new

processes Restructuretheor anizationaroundthenewbusiness

processes.


Characteristicsof

Reengineered Organizations


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ReengineeredOrganizations

Workunitschangefromfunctionaldepartmentstoprocess

teams Jobschangefromsimpletaskstomultidimensionalwork

eop e sro esc ange romcon ro e oempowere

Thefocus

of

performance

measures

and

compensation

shifts

.

Organizationstructureschangefromhierarchicaltoflat

Managerschangefromsupervisorstocoaches;executiveschangefromscorekeeperstoleaders


Thank You


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ThankYou

4.basic orgn design

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