After reading this chapter, you should be able to answer the following questions: What is the formal structure of the organization? How is work organized and coordinated? What is organizational design? What are bureaucracies and what are the common forms?
Chapter 16 Organizational Structure and Design Pull together to achieve common goals Chapter 16 Learning Objectives What is the Formal Structure of the Organization? How is Work Organized and Coordinated? What is Organizational Design? What are Bureaucracies and What Are the Common Forms? Copyright © 2014 John Wiley & Sons, Inc 16-2 What is the Formal Structure of the Organization? Organizational Hierarchies • Vertical Specialization An organization’s hierarchical division of labor • Organization Charts Diagrams that depict the formal structure of organizations • Span of Control The number of individuals reporting to a supervisor Copyright © 2014 John Wiley & Sons, Inc 16-3 Figure 16.1 A partial org chart for a state university Copyright © 2014 John Wiley & 16-4 What is the Formal Structure of the Organization? Vertical Divisions of Labor • Line Units Personnel conduct the major business of the organization • Staff Units Assist the line units by providing specialized expertise and services Copyright © 2014 John Wiley & Sons, Inc 16-5 What is the Formal Structure of the Organization? Controls as a Basic Feature • Control The set of mechanisms used to keep action or outputs within predetermined limits • Output Controls Focus on desired targets for each unit • Process Controls Attempt to specify the manner in which tasks are accomplished Copyright © 2014 John Wiley & Sons, Inc 16-6 Copyright © 2014 John Wiley & 16-7 How is Work Organized and Coordinated? Organizing and Coordinating Work • Horizontal Specialization A division of labor that established specific work units or groups within an organization • Coordination The set of mechanisms that an organization uses to link the actions of their units into a consistent pattern Copyright © 2014 John Wiley & Sons, Inc 16-8 How is Work Organized and Coordinated? Traditional Types of Departments • Functional Departmentation Groups individuals by skill, knowledge and action • Divisional Departmentation Groups individuals together by products, territories, services, clients or legal entities Copyright © 2014 John Wiley & Sons, Inc 16-9 Copyright © 2014 John Wiley & 16-10 How is Work Organized and Coordinated? Coordination • Coordination The set of mechanisms that an organization uses to link the actions of their units into a consistent pattern Personal Methods of Coordination Impersonal Methods of Coordination Copyright © 2014 John Wiley & Sons, Inc 16-14 What is organizational design? Organizational Design • The process of choosing and implementing a structural configuration Copyright © 2014 John Wiley & Sons, Inc 16-15 What is organizational design? Organizational Design • The process of choosing and implementing a structural configuration Simple Design • A configuration involving one or two ways of specializing individuals and units Technology and Organizational Design Operations Technology and Organizational Design Copyright © 2014 John Wiley & Sons, Inc 16-16 What is organizational design? Operations Technology and Organizational Design • The combination of resources, knowledge, and techniques that creates a product or service output for an organization common classifications for operations technology Copyright © 2014 John Wiley & Sons, Inc 16-17 What is organizational design? View of Technology • James D Thompson Based on the degree which technology could be specified under Intensive technology Mediating Technology Long-linked Technology • Joan Woodward’s Based on three categories Small-batch Mass production Continuous process manufacturing Copyright © 2014 John Wiley & Sons, Inc 16-18 What is organizational design? Operating Technology and Adhocracy • Adhocracy Characterized by shared decentralized decision making, extreme horizontal specialization, few management levels and minimal formal controls with very few rules, policies and procedures Copyright © 2014 John Wiley & Sons, Inc 16-19 What is organizational design? Information Technology and Organization design • Information Technology The combination of machines, artifacts, procedures, and systems used to gather, sore, analyze, and disseminate information for translating it into knowledge Copyright © 2014 John Wiley & Sons, Inc 16-20 What is organizational design? Virtual Organization • Virtual Teams and Virtual Projects Ever shifting constellation of firms, with a lead corporation, that pools skills, resources, and experiences to thrive jointly Copyright © 2014 John Wiley & Sons, Inc 16-21 What is organizational design? Environment and Organizational Design • Segment of the Organization’s Environment General Environment The set of cultural, economic, legal-political, and educational conditions found in the areas in which the organization operates Specific Environment The owners, suppliers, distributors, government agencies, and competitors with which an organization must interact to grow and survive Copyright © 2014 John Wiley & Sons, Inc 16-22 What is organizational design? Environmental Complexity • Refers to the magnitude of the problems and opportunities in the organization’s environment with three main factors Degree of Richness Degree of Interdependence Degree of Uncertainty Copyright © 2014 John Wiley & Sons, Inc 16-23 What is organizational design? Networks and Alliances for Highly Complex Environments • Going beyond traditional boundaries The management networks The development of alliances • Interfirm Alliances Cooperative agreements or joint ventures between two independent firms Copyright © 2014 John Wiley & Sons, Inc 16-24 What are bureaucracies and what are the common forms? Bureaucracy • Form of organization that emphasizes legal authority, logic, clear division of labor, promotion by merit, and administrative rule Mechanistic - emphasizes vertical specialization and control Organic – emphasizes horizontal specialization Copyright © 2014 John Wiley & Sons, Inc 16-25 What are bureaucracies and what are the common forms? Mechanistic bureaucracy • Emphasizes vertical specialization and control • Organizations of this type stress rules, policies, and procedures; specify techniques or decision making; and emphasize developing welldocumented control systems Copyright © 2014 John Wiley & Sons, Inc 16-26 What are bureaucracies and what are the common forms? Benefits of the organic type • Better for problem solving and for serving individual customer needs • Centralized direction by senior management is less intense • Good at detecting external changes and adjusting to new technologies Copyright © 2014 John Wiley & Sons, Inc 16-27 What are bureaucracies and what are the common forms? Common types of hybrid bureaucracies • Divisional firm Composed of quasi-independent divisions so that different divisions can be more or less organic or mechanistic • Conglomerate A single corporation that contains a number of unrelated businesses Copyright © 2014 John Wiley & Sons, Inc 16-28 ... Technology and Organizational Design Operations Technology and Organizational Design Copyright © 2014 John Wiley & Sons, Inc 1 6-1 6 What is organizational design? Operations Technology? ?and? ?Organizational? ?Design... Inc 1 6-1 4 What is organizational design? Organizational? ?Design • The process of choosing and implementing a structural configuration Copyright © 2014 John Wiley & Sons, Inc 1 6-1 5 What is organizational. .. 1 6-9 Copyright © 2014 John Wiley & 1 6-1 0 Copyright © 2014 John Wiley & 1 6-1 1 How is Work Organized and Coordinated? Matrix Structures • Matrix Departmentation Uses both the functional and