Developed by Cool Pictures & MultiMedia Presentations Copyright © 2002 by South-Western, a division of Thompson Learning. All rights reserved.Developed by Cool Pictures & MultiMedia Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

An OverviewWhich Comes first—strategy or structure?

Form follows functionBut, once the form is in place, it impacts the function.

Chapter OutlineThe horizontal organization

The need for coordinationTask force, teams and project management

Coordination

Quality of collaboration across departments

Evolution of Organization Structures

Traditional Vertical Structure

Teams and Project Managers for Horizontal

Coordination

Reengineering to Horizontal Processes

New Workplace Learning Organization

Structural Design

• Task Force...A temporary team or committee formed to solve a specific short-term problem

• Team…Participants from several departments who meet to solve ongoing problems

•Project Manager…A person responsible for coordinating the activities of several departments

Traditional VerticalOrganization

Dominant Structural Approach

New Workplace Organization

Traditional versus Learning Organizations

Horizontal structure is dominant

Vertical Structure is dominant1. Few teams, tasks forces, or project managers 2. Vertical communications and reporting system 3. Centralized strategic decision making 4. Specialized tasks 5. Rigid culture

1. Horizontal teams, task forces, project management2. Open information, horizontal communication, face to face3. Decentralized decision making, participate strategy4. Empowered employees, shared responsibility5. Strong adaptive culture

Chapter OutlineTraditional organizations vs. the new workplace

Horizontal structureOpen informationDecentralized decisions making & participative strategyEmpowered employeeStrong, adaptive culture

Empowerment

Giving employees the power, freedom, knowledge, and skills to make decisions and perform effectively

Corporate Culture

The set of key values. Beliefs, understandings, norms shared by members of the organization.Is the foundation of a learning organization

Strong, Adaptive Culture Values

The whole is more important than the parts, and boundaries between parts are minimized.The culture is egalitarianThe culture values change risk taking

Structure Follows Strategy

Differentiation strategy, organization attempts to develop innovative productsCost leadership strategy, striving for internal efficiency

Chapter Outline

Factors shaping structureStructure follows strategyStructure reflects the environmentStructure fits the technologyStructure follows the workflow

Influencing Organizational Structure

Interdependence

Strategy

Environment

Technology

Traditional Vertical Structure

New Horizontal Structure

Company Performance

Three Things Happen Due To

Uncertain Environments

1. Increased differences occur among departments2. The organization needs increased coordination to

keep departments working together3. The organization must adopt to change

Environment versus Structure

Woodward’s Manufacturing Technology

Small batch and unit production Large batch and mass

production Continuous process production

Manufacturing Technology and Organizational

Structure

Interdependence

The extent to which departments depend on each other for resources or materials to accomplish their tasks.

Types of Interdependence and Required Coordination