After reading this chapter, you should be able to answer the following questions: What is organizing as a managerial responsibility? What are the most common types of organization structures? What are the trends in organizational design?
Exploring Management Chapter 8 Organization Structure and Design Chapter • • • What is organizing as a managerial responsibility? What are the most common types of organization structures? What are the trends in organizational design? 8.1 Organizing • • • • Organizing is one of the management functions Organization charts describe the formal structures of organizations Organizations also operate with informal structures Informal structures have good points and bad points ORGANIZING Management Functions • Organizing – Arranges people and resources to work toward a goal ORGANIZING Organizational Charts • Structure – • system of tasks, reporting relationships, and communication that links people and positions within an organization Organization Charts – describe the formal structure, how an organization should ideally work ORGANIZING Organizational Charts What You Can Learn from an Organization Chart ORGANIZING Formal Structure ORGANIZING Formal Structure • Division of Labor – • Formal Structure – • People and groups performing different jobs The official structure of the organization Informal Structure – The unofficial relationships that develop among an organization’s members ORGANIZING Informal Structure • Informal Structure – Unofficial but important working relationships between members ORGANIZING Informal Structure • Informal Structures have good and bad points Social network analysis identifies communication relationships – Good points include problem solving, support, friendship and fill gaps in the formal structure – Bad points include rumors, inaccurate information and resistance to change – COMMON ORGANIZATIONAL STRUCTURES Network Structures Network structures • • Consist of a central core with networks of relationships with contractors Contractors and network partners supply essential services COMMON ORGANIZATIONAL STRUCTURES Network Structures Network structure example COMMON ORGANIZATIONAL STRUCTURES Network Structures Possible advantages of Network structures • Lower costs due to fewer full-time employees • Better access to expertise through specialized alliance partners and contractors • Easy to grow or shrink with market conditions COMMON ORGANIZATIONAL STRUCTURES Network Structures Virtual Organizations • Network that depends on information technology to link alliances and essential services 8.3 Organizational Design Trends • • • • • Organizations are becoming flatter, with fewer levels of management Organizations are increasing decentralization Organizations are increasing delegation and empowerment Organizations are becoming more horizontal and adaptive Organizations are using more alternative work schedules ORGANIZATIONAL DESIGN TRENDS Organizational Design Organizational Design • Aligns structure to best accomplish mission and respond to external environment ORGANIZATIONAL DESIGN TRENDS Organizational Design Span of control • How many people report to a manager – Narrow • – manger supervises few people Wide • manger supervises larger number of people • flatter organizations have wide span of control ORGANIZATIONAL DESIGN TRENDS Organizational Design ORGANIZATIONAL DESIGN TRENDS Decentralized Decision-making Centralization • Top management keeps strong decisionmaking control Decentralization • Decision-making is distributed throughout the organization ORGANIZATIONAL DESIGN TRENDS Increased Delegation Delegation • Giving others the right to make decisions and take action • Steps Assign responsibility—explain task and expectations to others Grant authority—allow others to act as needed to complete task Create accountability—require others to report back, complete task Empowerment Empowerment • • Gives people freedom to their jobs as they think best When delegation is done well it leads to empowerment ORGANIZATIONAL DESIGN TRENDS Horizontal and Adaptive Organizations Bureaucracy • Formal authority – – – • Rules Order Fairness Mechanistic Designs – – – Bureaucratic Centralized Vertical structure ORGANIZATIONAL DESIGN TRENDS Horizontal and Adaptive Organizations • Organic Designs – Adaptable – Decentralized – Horizontal Structure ORGANIZATIONAL DESIGN TRENDS Horizontal and Adaptive Organizations ORGNIZATIONAL DESIGN TRENDS Alternative Work Schedules Alternative schedules increase flexibility and increase satisfaction for employers and employees • Compressed workweek • Flextime • Job sharing • Telecommuting ... delegation and empowerment Organizations are becoming more horizontal and adaptive Organizations are using more alternative work schedules ORGANIZATIONAL DESIGN TRENDS Organizational Design Organizational... COMMON ORGANIZATIONAL STRUCTURES Functional Structures Common functional structure COMMON ORGANIZATIONAL STRUCTURES Functional Structures Functional Chimneys or Silos • Communication and performance... customers COMMON ORGANIZATIONAL STRUCTURES Divisional Structures Common divisional structures COMMON ORGANIZATIONAL STRUCTURES Divisional Structures Potential Advantages of Divisional Structures •