schermerhorn - chapter 81 chapter 8 organizing - to create structures 4 planning ahead –what is...

Schermerhorn - Chapter 8 1

Chapter 8Organizing - To Create Structures

Planning Ahead– What is organizing as a management function?– What are the traditional organization

structures?– What are the new developments in organization

structures?– What organizing trends are changing the

workplace?


Organizing as a Management Function What is Organization Structure

– system of tasks, workflow, reporting relationships and communication channels that link together workgroups


Organizing as a Management Function Formal Structure

– official working relationships often represented by an organizational chart


Organizing as a Management Function Informal Structure

– unofficial working relationships– important in understanding organizations– sometimes work against best interest of

organizations


Traditional Organization Structures Functional

– people performing similar tasks are formally grouped together

– workers share technical expertise, interests and responsibilities

Majors in this class are functional majors, accounting, cis, marketing, economics, others but not management.


Traditional Organization Structures Advantages of Functional Structures

– economies of scale– task assignments consistent with expertise– high-quality technical problem solving– in-depth training and skill development– clear career paths


Traditional Organization Structures Disadvantage of Functional Structures

– functional chimneys problem• lack of problem solving across functions

• Each major in this class needs to be good across functions and even across organizations, and across levels in organizations.


Traditional Organization Structures Divisional Structures

– groups together employees who work on the same product or service in the same geographic area


Traditional Organization Structures Advantages of Divisional Structures

– more flexibility– improved coordination– clear points of responsibility– expertise focused on specific customers,

products and regions– greater ease in restructuring


Traditional Organization Structures Disadvantages of Divisional Structures

– reduce economies of scale– increase costs through duplication of resources

across divisions– create unhealthy rivalries


Traditional Organization Structures Matrix Structure

– combination of functional and divisional structures

– used in• manufacturing

• service industries

• professional fields

• nonprofit sector


Traditional Organization Structures Advantages of Matrix Structure

– better inter-functional cooperation

– increased flexibility in restructuring

– better customer services

– better performance accountability

– improved decision making

– improved strategic management


Traditional Organization Structures Disadvantages of Matrix Structures

– two-boss system is susceptible to power struggles

– workers may suffer task confusion– focused team loyalties to detriment of

organization


Development in Organization Structures Team Structures

– Extensively use permanent and temporary teams to solve problems, complete special projects, and accomplish day-to-day tasks.

– Often use cross-functional teams.


Developments in Organization Structures Advantages of Team Structures

– Eliminates barriers between operating departments.

– Improved morale due to cross-functional interactions.

– Improved quality and speed of decision making.

– Increased enthusiasm for work.


Developments in Organization Structures Disadvantages of Team Structures

– conflicting loyalties among members– spend a lot of time in meetings


Developments in Organization Structures Network Structures

– central core that is linked through networks of relationships with outside suppliers of essential services

• Boundary-less organizations

• virtual corporations -- have no central office

• Outsource many if not all major functions– Production, accounting, marketing, cis etc.


Developments in Organization Structures Advantages of Network Structures

– operate with fewer full-time employees– reduced overhead– increased operating efficiency– work together across great distances instead of

face-to-face


Developments in Organization Structures Disadvantages of Network Structures

– Coordination of the entire system of relationships

– Potential loss of control over outsourced activities.

– Potential lack of loyalty among infrequently used contractors.


Developments in Organization Structures Boundary-less organizations

– Organizations in which teamwork and intense communication take the place of formal lines of authority.

– Break down internal boundaries.– Key requirements:

• Absence of hierarchy• Empowerment of team members• Acceptance of impermanence


Developments in Organization Structures Virtual organization

– A special form of boundary-less organization.– Operates in a shifting network of external

strategic alliances that are engaged as needed, and typically supported by extensive IT utilization.


Developments in Organization Structures Organizing Trends in the Modern

Workplace– Wider Spans of Control

• chains of command are shortened• managers have responsibility for larger number of

subordinates• Financial bonanza• Elimination of bureaucracies• Flat organizational structures



Workplace– Shorter Chains of Command

• organizations are reducing levels of management

– Less Unity of Command• increases in cross-functional teams, task forces and

horizontal structure



Workplace– More Delegation and Empowerment

• delegation – assigns responsibility– grants authority to act– creates accountability

– Problem in US you are made responsible for things you can’t always control—Japan and other countries don’t do this.



Workplace– More Delegation and Empowerment

• empowerment– freedom to contribute ideas

– increase job satisfaction

– better job performance



Workplace– Decentralization with Centralization

• empowerment allows for more decentralization

• advances in information technology allow for retention of centralized control



Workplace– Reduced use of Staff

• Specialized staff—people who perform a technical service or provide special problem-solving expertise to other parts of the organization.

• Personal staff—people working in “assistant-to” positions that provide special support to higher-level positions.


The next slide is for an exercise. The information was studied earlier in the class under types of strategies. The information in this slide should be

useful in giving you hints as to the differences between Porter’s generic strategies and how you can change your organizational structure to match the needs of a strategy.

Remember structure follows strategy.


Requirements for Generic Competitive StrategiesCommonly Required Generic Common Organizational

Strategy Requirements Skills and Resources

Overall Cost Leadership • Sustained capital investment and access to capital• Process engineering skills• Intense supervision of labor• Products designed for ease of manufacture• Low-cost distribution system

Differentiation • Strong marketing abilities• Product engineering• Creative flair• Strong capability in basic research• Corporate reputation for quality or technological leadership• Long tradition in the industry or unique combination of skills drawn from other businesses• Strong cooperation from channels

Focus• Combination of the above policies directed at the particular strategic target

• Tight cost control• Frequent, detailed control reports• Structured organization and responsibilities• Incentives based on meeting strict quantitative targets.

• Strong coordination among functions in R&D, product development, and marketing• Subjective measurement and incentives instead of quantitative measures• Amenities to attract highly skilled labor, scientists, or creative people

• Combination of the above policies directed at the particular strategic target

schermerhorn - chapter 81 chapter 8 organizing - to create structures 4 planning ahead –what is...

Documents

schermerhorn chapter

divisional structures

restructuring slide

management function

geographic area slide

organizational chart

functional majors

functional people