organisation design 2
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2008 The McGraw-Hill Companies, Inc. All rights reserved
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Chapter
McGraw-Hill/Irwin
Organizational
Structure,design
andCommunication
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Organization Design Design refers to a plan for the construction of
any object or system.
Organization design refers to the
construction or change of a structure withinwhich the work of the organization takes
place.
Organization design refers to managerialdecisions that determine the structure and
processes which in turn control the activities
in an organization.
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Organization Design These processes include authority and
responsibility relationships, communication
networks, planning and controlling
mechanisms. Organization design begins with the
formulation of a strategy
The strategy is derived from clear, concisestatements of vision, mission and from the
organizations basic philosophy.
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Organ izat ion s truc ture Defines the formal relationships among
people and specifies both their authorities
and responsibilities.
An organization is the structural frameworkfor carrying out the functions of planning,
decision-making, controlling, directing,
communication, motivation, etc.
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The three levels of management
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..
Organizat ion s truc turedetermines whoworks together
It is the way managers design their firms to
achieve their organizations mission and goals
Organizat ional commun icat ionflows
through its structure, which affects:
behaviorhuman relations
performance
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The transition from an economy based on
materials to an economy based on flows of
information has created considerable
challenges for organizational structure, andcommunication.
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Principles of Organization (1 of 3)
Division of Labor and DepartmentalizationDivision of labor, or work specialization refers to
the degree to which tasks are subdivided intoseparate jobs
Departmentalization grouping of relatedactivities into units
Chain of Command
line of authority from the top to the bottom of theorganization, which is shown in an organizationchart
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Principles of Organization (2 of 3)
Span of Management refers to number of employees reporting to a
manager
Centralized and Decentralized AuthorityWith centralized authority, top managers make
important decisions
With decentralized authority, middle and first-line
managers make important decisions where the
action is
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Principles of Organization (3 of 3)
CoordinationWith the division of labor and departmentalization
comes the need to coordinate the work of all
departments
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Questions and Answers for
Designing Organizational Structure:
Questions Answers
How should we subdivide work? Division of Labor and
Departmentalization
Who should departments and
individuals report to?
Chain of Command
How many individuals should report to
each manager?
Span of Management
At what level should decisions be
made?
Centralization vs.
Decentralization
How do we get everyone to work
together as a team?
Coordination
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Formal Organization Structure
President
Vice President
Production
Vice President
Finance
Vice President
Marketing
Manager
A
Manager
B
Manager
C
Manager
D
Manager
E
Manager
F
Manager
G
Manager
H
Manager
I
Vertical downwardcommunication
Vertical upwardcommunication
Exhibit 6.2
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Informal Organization Structure
President
Vice PresidentProduction
Vice PresidentFinance
Vice PresidentMarketing
ManagerA
ManagerB
ManagerC
ManagerD
ManagerE
ManagerF
ManagerG
ManagerH
Horizontal
communication
networks
Exhibit 6.2
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Common Types
of Departmentalization (1 of 4)
Divisional TerritoryMatrix
Product Customer
Functional
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Common Types of
Departmentalization (2 of 4)Functional Departmentalization involves organizing departments around essential
input activities, such as: production and operations
finance and accounting marketing and sales
human resources
Product (Service) Departmentalization
involves organizing departments around goodsand services provided
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Common Types of
Departmentalization (3 of 4)Customer Departmentalization
involves organizing departments around theneeds of different types of customers with uniqueneeds calling for different sales staffs and
productsDivisional Departmentalization (M-Form)
the firm develops independent lines of businessthat operate as separate companies, all
contributing to the corporation profitability
Territory (Geographic) Departmentalization
involves organizing departments in each area in
which the enterprise does business
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Common Types of
Departmentalization (4 of 4)Matrix Departmentalizationcombines the functional and product
departmental structures
Combinationmany large companies have more than one form
of departmentalization
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Matrix organisation2
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Contemporary Organization Design
Virtual
Organizations
Boundaryless
Organizations
E-Organizations
Learning
Organizations
Team Organizations
andReengineering
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American and Japanese Organization
Structures
Division of labor tends to be a bit lessspecialized in Japan
Both countries use the same types of
departmentalizationAmerican organizations tend to be quicker to
hire, lay off, and to change jobs than the
Japanese
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Organizational Communication
Organizational communication
thecompounded interpersonal communicationprocess across an organization
Communication flows in an organization are:Vertical
Horizontal
Grapevine (multidirectional)
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Vertical and Horizontal
Communication
Vertical Communication
The flow of information
both up and down the
chain of commandFormal communication
Recognized as official
Status andpowerare not
equal among participants
in vertical
communication
HorizontalCommunication
The flow of
information betweencolleagues andpeers
Informal
communication
Does not follow thechain of command
Not recognized as
official
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Grapevine Communication
Grapevine
the informal vehicle throughwhich messages flow throughout the
organization
When the grapevine allows employees toknow about a management decision almost
before it is made, management must be
doing something right.
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Communication Networks
Communication networks
sets ofemployees who have stable contact throughwhich information is generated andtransmitted
Two major types of communication networks:
1. within organizations
2. within departments and small groups
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Message Transmission Channels
Oral Communication
Written Communication
Nonverbal
Communication
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Oral Communication Media
Face-to-Face Telephone
Meetings Presentations
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Written Communication (1 of 2)
With increased use of e-mail, managerssubstitute face-to-face communication with e-mail
Communication Objective GuidelinesMemos
Letters
Reports
Bulletin board notices
Posters
Computers/e-mail
Fax
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Written Communication (2 of 2)
Writing skills Grammarrules for use of the eight parts of
speech
To simplify grammar, we use subjects,predicates, modifiers, and connectives
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Nonverbal Communication
FacialExpressions VocalQualities
Gestures Posture
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Emotions (1 of 2)
Emotional labor
requires the expression
of desired emotions
during interpersonalrelations
Universal emotions:
happiness
surprise
fear sadness
anger
disgust
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Emotions (2 of 2)
Understanding FeelingsFeelings are subjectivethey tell you peoples
attitudes and needs
Feelings are usually disguised as factualstatements
Feelings are neither right nor wrong but behavior
is
Gender Differences
Global Differences
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Dealing with Emotional Employees
Calming the emotional person
Use reflecting responses
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Criticism
Getting Criticism Giving Criticism
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G f G ff
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Guidelines for Giving Effective
Criticism
Give more praise than criticism
Criticize immediately
Criticism should be performance oriented
Give specific and accurate criticism
Open on a positive note and close by
repeating what action is needed
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Summary
Organization structure is essential to achievethe organizational goals.
The organization structure basically shows
the relationships between different jobs the concept of organization design and
structure
hierarchy, division of work, unity ofcommand, authority & responsibility, span of
control, centralization & decentralization&
departmentation.
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