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Ch6 Organizational Structure And Design (6-3 Compare and contrast…
Ch6 Organizational Structure And Design
6-1 Describe six key elements in organizational design
Organizational design
Authority and responsibility
Traditional view
Chained of command
Authority
Line authority
Entitles a manager to direct the work of an employee
"Line" refers to managers whose organizational function contributes directly to the achievement of organizational objectives
Staff authority
Support, assist, advise
Generally reduce some of their informational burdens
Responsibility
Unity of command
Each employee should report to only one managers
Today's view
Those conditions no longer exist
Span of control
Today's view
Increasing their spans of control
Traditional view
Most favored small spans In order to maintain close control
Departmentalization
Traditional view
How jobs are grouped together
Activities grouped
Functional departmentalization
Product departmentalization
Customer departmentalization
Geographic departmentalization
Process departmentalization
Today's view
Cross-functional teams
Made up of individuals from various departments
Complex and diverse skills
Centralization an Decentralization differ
Traditional view
Centralization
The degree to which making takes place at upper levels
Decentralization
The degree to which lower-level managers provide input or actually make decisions
No organization is completely centralize or completely decentralize
Today's view
Choose the amount of centralization or decentralization that will allow them to best implement their decisions.
Work specialization
Traditional view
Division of labor
Employees "specialize" in doing part of an activity
organization was reasonable (at the beginning of 21 century)
The human economies outweigh the economic advantages
Today's view
See work specialization as an important organizing mechanism
Helps employees be more efficient
Formalization
Traditional view
How standardized an organization's jobs
Extent to which employee behavior is guided by rules and procedures
Today's view
Many organizations today rely less on strict rules and standardization
6-2 Identify the contingency factors that favor either the mechanistic model or the organic model of organizational design
Mechanistic organization
Formalized communication channels
Many rules
Fixed duties
Rigid hierarchical relationships
Centralized decision authority
Taller structures
Organic organization
Few rules
Informal communication
Adaptable duties
Decentralize decision authority
Flatter structures
Collaboration (Both vertical and horizontal)
Technology and structure
Technology is use--by every organization--to convert inputs into outputs
Mass production
Large-batch manufacturing
Process production
Most complex and sophisticated
Continuous-process production
Unit production
Least complex and sophisticated
The production of items in units or small batches
Environment and structure
Environment also has a major effect on an organization's structure
Stable environment: Mechanistic structure
Dynamic/uncertain environment: Organic structure
Environment is constraint on managerial discretion
Strategy and structure
Simple strategy, simple structure
Elaborate strategy, more complex structure
Goals are important part of organization's strategies; structure should facilitate goal achievement
Certain structural designs work best with different organizational strategies
Passionate pursuit of innovation / organic
Passionate pursuit of cost control / mechanistic
Size and structure
Magic number seems to be 2,000 employees
Large organizations(>2,000 employees)--mechanistic
Considerable evidence that size(number if employees) affects structure
6-3 Compare and contrast traditional and contemporary organizational designs
Functional structure
Strengths
Cost-saving advantages from specialization(Economies of scale, minimal duplication of people and equipment)
Employees are grouped with others who have similar tasks
Weaknesses
Pursuit of functional goals can cause managers to lose sight of what's best for the overall organization
Functional specialists become insulated and have little understanding of what other units are doing
Divisional structure
Strengths
Focus on results
Division managers are responsible for what happens to their products and services
Weaknesses
Simple structure
Weaknesses
Not appropriate as organization grows
Reliance on one person is risky
Strengths
Flexible
Inexpensive to maintain
Fast
Clear accountability
Team structure
Advantages
Employees are more involved and empowered
Reduced barriers among functional areas
Disadvantages
No clear chain of command
Pressure on teams to perform
Matrix-project structure
Advantages
Fluid and flexible design that can respond to environmental changes
Fast decision making
Disadvantages
Complexity of assigning people to project
Task an personality conflicts
Boundaryless structure
Advantages
Highly flexible and responsive
Utilizes talent wherever it's found
Disadvantages
Lack of control
Communication difficulties
Learning structure
Advantages
Sharing of knowledge throughout organization
Sustainable source of competitive
Disadvantages
Reluctance on part of employees to share knowledge for fear of losing their power
Large numbers of experienced employees on the verge of retiring
6-4 Discuss the design challenges faced by today's organizations
The learning organization
Information sharing
Timely
Accurate
Open
Leadership
Shared vision
Collaboration
Organization design
Teams
Empowerment
Boundaryless
Organizational culture
Sense or community
Caring
Trust
Strong mutual relaitonship
Telecommuting
Linked to the workplace by computer
Not every job is a candidateg
A work arrangement in which employees work at home
Flexible work hours
Job sharing
Compressed workweek