designing organizational structure chapter seven copyright © 2011 by the mcgraw-hill companies,...
TRANSCRIPT
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Designing Designing Organizational Organizational
StructureStructure
Chapter Seven
Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
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Learning ObjectivesLearning Objectives
LO1 Identify the factors that influence managers’ choice of an organizational structure
LO2 Explain how managers group tasks into jobs that are motivating and satisfying for employees
LO3 Describe the types of organizational structures managers can design, and explain why they choose one structure over another
LO4 Explain why managers must coordinate jobs, functions, and divisions using the hierarchy of authority and integrating mechanisms.
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Designing Organizational StructureDesigning Organizational Structure
• Organizing–The process by which managers establish the
structure of working relationships among employees to achieve goals
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Designing Organizational StructureDesigning Organizational Structure
• Organizational Structure–Formal system of task and reporting relationships
that coordinates and motivates organizational members so that they work together to achieve organizational goals
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Designing Organizational StructureDesigning Organizational Structure
• Organizational design– The process by which managers make specific
choices that result in a particular kind of organizational structure.
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Factors Affecting Organizational Factors Affecting Organizational StructureStructure
Figure 7.1 7-6
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Question?Question?
What is increasing the degree of responsibility a worker has over a job?
A. Job DesignB. Job SimplificationC. Job EnlargementD. Job Enrichment
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Job DesignJob Design
• Job Design– The process by which managers decide how to
divide tasks into specific jobs
• Job Simplification– The process of reducing the number of tasks that
each worker performs
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Job DesignJob Design
• Job Enlargement– Increasing the number of different tasks in a given
job by changing the division of labor
• Job Enrichment– Increasing the degree of responsibility a worker
has over a job
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The Job Characteristics ModelThe Job Characteristics Model
Figure 7.2 7-10
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Job Characteristics ModelJob Characteristics Model
Job Characteristic
Skill variety Employee uses a wide range of skills.
Task identity Worker is involved in all tasks of the job from beginning to end of the production process
Task significance Worker feels the task is meaningful to organization.
Autonomy Employee has freedom to schedule tasks and carry them out.
Feedback Worker gets direct information about how well the job is done.
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Grouping Jobs into FunctionsGrouping Jobs into Functions
• Functional Structure– An organizational
structure composed of all the departments that an organization requires to produce its goods or services
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Grouping Jobs into FunctionsGrouping Jobs into Functions
• Advantages– Encourages learning
from others doing similar jobs
– Easy for managers to monitor and evaluate workers
• Disadvantages– Difficult for departments
to communicate with others
– Preoccupation with own department and losing sight of organizational goals
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Divisional StructuresDivisional Structures
• 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
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Types of Divisional StructuresTypes of Divisional Structures
• Product Structure– Each product line or
business is handled by a self-contained division
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Product StructureProduct Structure
Advantages• Allows functional managers to specialize in
one product area• Division managers become experts in their
area• Removes need for direct supervision of
division by corporate managers• Divisional management improves the use of
resources
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Figure 7.4
Product, Market, and Geographic Structures
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Types of Divisional StructuresTypes of Divisional Structures
• Geographic Structure– Each region of a country or area of the world is
served by a self-contained division
• Global geographic structure– Managers locate different divisions in each of the
world regions where the organization operates– Generally, occurs when managers are
pursuing a multi-domestic strategy
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Types of Divisional StructuresTypes of Divisional Structures
• Global Product Structure– Each product division, not the country or regional
managers, takes responsibility for deciding where to manufacture its products and how to market them in foreign countries
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Global Geographic and Global Geographic and Global Product StructuresGlobal Product Structures
Figure 7.5 7-20
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Types of Divisional StructuresTypes of Divisional Structures
• Market Structure– Each kind of customer is served by a self-
contained division– Also called customer structure
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Matrix Design StructureMatrix Design Structure
• Matrix Structure– An organizational
structure that simultaneously groups people and resources by function and product
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Matrix StructureMatrix Structure
Figure 7.6 7-23
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Product Team Design StructureProduct Team Design Structure
• Product Team Structure– Members are permanently assigned to a cross-
functional team and report only to the product team manager or to one of his subordinates
• Cross-functional team – group of managers brought together from
different departments to perform organizational tasks
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Product Team StructureProduct Team Structure
Figure 7.6 7-25
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Hybrid StructuresHybrid Structures
• Hybrid Structure– The structure of a large organization that has
many divisions and simultaneously uses many different organizational structures
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Macy’s Hybrid StructureMacy’s Hybrid Structure
Figure 7.7 7-27
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Coordinating Functions and DivisionsCoordinating Functions and Divisions
• Authority– The power to hold people accountable for their
actions and to make decisions concerning the use of organizational resources
• Hierarchy of Authority– An organization’s chain of command, specifying
the relative authority of each manager
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Allocating AuthorityAllocating Authority
• Span of Control– The number of subordinates that report directly to a
manager
• Line Manager– someone in the direct line or chain of command who
has formal authority over people and resources
• Staff Manager– Someone responsible for managing a specialist
function, such as finance or marketing.
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Tall & Flat Organizations
Figure 7.97-30
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Tall and Flat OrganizationsTall and Flat Organizations
• Decentralizing authority– giving lower-level managers and nonmanagerial
employees the right to make important decisions about how to use organizational resources.
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Types of Integrating MechanismsTypes of Integrating Mechanisms
• Integrating Mechanisms – Organizing tools that managers can use to
increase communication and coordination among functions and divisions
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Discussion Question?Discussion Question?
Which of these is an example of an integrating mechanism?
A. Direct ContactB. Liaison rolesC. Task ForcesD. Cross-functional TeamsE. All of the above
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Types and Examples of Integrating Types and Examples of Integrating MechanismsMechanisms
Figure 7.10 7-34
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Strategic AlliancesStrategic Alliances
• Strategic Alliance– An agreement in which managers pool or share
firm’s resources and know-how with a foreign company and the two firms share in the rewards and risks of starting a new venture.
• Outsource – To use outside suppliers and manufacturers to produce
goods and services
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Strategic AlliancesStrategic Alliances
• Network Structure–A series of strategic alliances that an organization
creates with suppliers, manufacturers, and distributors to produce and market a product
–Network structures allow firms to bring resources together in a boundary-less organization
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Strategic AlliancesStrategic Alliances
• Boundaryless Organization– An organization whose members are linked by
computers, faxes, computer-aided design systems, and video-conferencing and who, rarely, if ever, see one another face-to-face
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Strategic AlliancesStrategic Alliances
• Knowledge Management System– A company-specific virtual information system
that allows workers to share their knowledge and expertise and find others to help solve problems.
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B2B Network Structures and ITB2B Network Structures and IT
• Business to Business (B2B ) network– A group of organizations that join together and
use IT to link themselves to potential global suppliers to increase efficiency and effectiveness.
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Video Case: Making Changes in New Video Case: Making Changes in New Orleans’ Most Troubled SchoolsOrleans’ Most Troubled Schools
• How would you rate teaching according to the five characteristics that determine how motivating a job is?
• Does establishing organizational culture in a school present any different challenges than establishing culture in other types of organizations?