FOM 6.1Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Chapter 6Organizational Designs

FOM 6.2Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Learning Outcomes

Identify and define the six elements of organization structure

Describe the advantages and disadvantages of work specialization

Contrast authority and power Identify the five different ways by which

management can departmentalize Contrast mechanistic and organic organizations Summarize the effect on organization structures of

strategy, size, technology, and environment (continued)

FOM 6.3Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Learning Outcomes (continued)

Contrast the divisional and functional structures

Explain the strengths of the matrix structure Describe the boundaryless organization and

what elements have contributed to its development

Explain what the term learning organization means

Describe what the term organization culture means

FOM 6.4Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

The framework

for dividing,

assigning, and

coordinating work

Developments in

or changes to

the structure of

an organization

OrganizationStructure

OrganizationDesign

FOM 6.5Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Key Elements of Organization Structure

DepartmentalizationSpan of Control

WorkSpecialization

Chainof Command

Authority and Responsibility

Centralization vs. Decentralization

FOM 6.6Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Work Specialization HighLowLo

wH

igh

Pro

du

ctiv

ity

Work Specialization Job is broken down into a number of

steps Each step is completed by a separate

individual Makes efficient use of the diversity of

skills that workers have

FOM 6.7Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

The Chain of Command

DistrictA

DistrictB

DistrictC

DistrictD

DistrictE

DistrictF

DistrictG

Region1

Region2

Region3

Region4

Region5

VicePresident

VicePresident

VicePresident

VicePresident

VicePresident

Chief ExecutiveOfficer

ExecutiveVice President

ExecutiveVice President

President

FOM 6.8Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Span of Control

Number of employees that an manager can manage effectively

Increased over the last several years Contingency variables impact number

FOM 6.9Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Authority vs. Responsibility

Rights inherent in managerial position to give orders and expect them to be followed

Related to one’s position--not the characteristics of person

Obligation to perform

Goes hand-in-hand with authority

FOM 6.10Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

MarketingHuman

ResourcesProductionAccountingFinance

Chief ExecutiveOfficer

Research andDevelopment

The Concept of Authority

FOM 6.11Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Line Authority

Level of authority that entitles manager to direct the work of an employee

Contributes directly to the achievement of organizational objectives

FOM 6.12Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

FinanceAccounting

Marketing

Human Resources

Research andDevelopmentProduction

The ConceptThe Conceptof Powerof Power

Function

AuthorityLevel

The PowerCore

FOM 6.13Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

ExpertExpert LegitimateLegitimate

CoerciveCoercive

ReferentReferent RewardReward

PowerPower

FOM 6.14Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

The Degree of Centralization

Higher

Em

plo

yee

Em

po

we

rme

nt

Centralization

DecentralizationDecentralization

HigherLowerT

op

Man

ag

eme

nt

Co

ntr

ol

Lower

FOM 6.15Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Five Ways to Departmentalize

Functional Product Customer Geographic Process

FOM 6.16Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Contingency Variables Affecting Structure

MECHANISTIC Rigid hierarchical

relationships Fixed duties Formal

communication channels

Centralized authority

ORGANIC Collaboration (both

vertical and horizontal)

Adaptable duties Information

communication Decentralized

authorized

FOM 6.17Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

ContingencyFactors andOrganization

Design

Strategy

Size

EnvironmentalUncertainty

Technology

FOM 6.18Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

CentralizedAuthority

LittleFormalization

FewDepartments

Wide Spans of Control

The SimpleStructure

FOM 6.19Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

TheBureaucracy

DivisionalStructure

FunctionalStructure

FOM 6.20Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Allocationof Specialists

ClearAccountability

Dual Chainof Command

The MatrixStructure

Cross-FunctionalCoordination

FOM 6.21Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Matrix Structure Sample

FOM 6.22Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

The Team-BasedStructure

Hold TeamsAccountablefor Results

of Work

EmpowerEmployees

to MakeDecisions

FOM 6.23Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Boundaryless Organization Globalization of markets and

competitors Rapidly changing technology Need for rapid innovation

FOM 6.24Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

The Learning OrganizationOrganizational Design•Boundaryless•Teams•Empowerment

Leadership•Shared vision•Collaboration

Information Sharing•Open•Timely•Accurate

Organizational Culture•Strong mutual relationships•Sense of community•Caring•Trust

LEARNING ORGANIZATION

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

permission of Pearson Education Canada Inc.

FOM 6.25Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

WHAT IS ORGANIZATIONAL CULTURE?

System of shared meaning within an organization that determines to

a large extent how employees behave and act

FOM 6.26Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Dimensions of Organizational Culture Member identity Group emphasis People focus Unit integration Control Risk tolerance

Reward Conflict tolerance Means-end

orientation Open-systems

focus

FOM 6.27Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Cultural Affects on Managers Constrains what managers can and

cannot do Constraints are rarely explicit Culture has a link between values and

managerial behaviour--what is acceptable and not

FOM 6.28Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.

Strong vs. Weak Cultures Predictability Orderliness Consistency Internal guidelines