Fundamentals of organizational behavior 2e by dubrin ch12

Organization Structure and DesignFundamentals of Organizational Behavior 2e PowerPoint Presentation Chapter 12... Identify and define the foundation concepts of organization structure,

Organization Structure and Design

Fundamentals of

Organizational Behavior 2e

PowerPoint Presentation

Chapter 12

Learning Objectives

1 Identify and define the foundation concepts of

organization structure, including the informal

structure.

2 Specify the basic features of the bureaucratic form

of organization, including how it is divided into

departments.

3 Describe key modifications of a bureaucratic

structure: matrix, flat, and outsourcing.

4 Describe the two contemporary organizational

designs referred to as horizontal organizations and

network organizations.

5 Understand why a new type of organization chart

called an organigraph can contribute to

Organization

 Is a collection of people working together to achieve a

common purpose (or simply a big group).

Organization structure

 Is the arrangement of people and tasks to accomplish

organizational goals.

Organizational design

 Is the process of creating a structure that best fits a

purpose, strategy, and environment.

Foundation Concepts of

Organizational Structure

Mechanistic versus Organic

 Mechanistic organizations are hierarchical bureaucracies

with an emphasis on specialization, control, and vertical

communications They rely heavily on rules, policies, and

Foundation Concepts of

Organizational Structure

Formal versus Informal Structure

 Formal organizational structure

 Is an official statement of the reporting relationships,

rules, and regulations that guide and govern the conduct

of business by the organization.

 Informal organizational structure

 Is a set of unofficial working relationships providing the flexibility that take care of events and transactions not covered by the formal structure.

 Is revealed using social network analysis to trace informal social relationships and communication channels.

Foundation Concepts of

Organizational Structure

Formalization

 Is the degree to which expectations regarding the methods

of work are specified, written down, and enforced.

 Produces an organization with highly specialized labor and high delegation of authority.

 Is associated with mechanistic (bureaucratic) organizations.

Foundation Concepts of

Organizational Structure

Complexity

 Refers to the number of different job titles and

organizational units in an organization.

 Increases the difficulty of managing an organization.

 Typically increases with the size of the organization.

Foundation Concepts of

Organizational Structure

Tight versus Loose Coupling

interdependent.

in one part produces a large change in an associated part.

the increasing interdependence of the parts or subsystems

of organizations today.

increased necessity for flexibility to meet changing market

conditions.

Weber’s Ideal Organization:

3 A high degree of job specialization.

4 An organization of offices determined by hierarchy, with

each unit reporting to a higher unit.

5 A heavy emphasis on rules and norms to regulate behavior

6 Interpersonal relations characterized by impersonality in

place of favoritism.

7 Selection and promotion based on merit.

The Bureaucratic Form of

Organization

Machine Bureaucracy

 Uses standardized work processes and is efficient.

 Best use is in large organizations.

The Bureaucratic Form

of Organization

Power and

Authority

Number of Employees

Level Managers

Top-Middle-Level Managers

First-Level Managers Operative Employees

The Bureaucratic Form of

Organization

The Contribution of Bureaucracy

 Makes possible large-scale accomplishments and

accountability for results.

 Bureaucratic layers contain managers with precious skills

and expertise If eliminated, the organization may suffer.

 Restructuring may destroy valuable organizational memory.

Potential Dysfunctions of a Bureaucracy

 Carrying bureaucratic characteristics to extremes

suppresses innovation and decision making, lowers

productivity, and creates inconvenience and inefficiency.

 Workers experience high frustration and low satisfaction.

Sources of Individual and Subunit

 Is grouping subunits according to the geographic

areas that they serve.

 Internationalization of business has increased the need

Sources of Individual and Subunit

 Creates a structure based on customer needs.

Hybrid (or Mixed) Organization Structure

 Combines the advantages of different organizational types.

Line versus Staff

 Line groups are responsible for the primary purposes of the firm whereas staff groups are responsible for secondary

purposes.

Functional Departmentalization

President

Vice President Finance and Chief Financial Officer

Vice President Human Resources

Vice President Engineering

Vice President Operations Vice President

Marketing

Vice President Human Resources

Vice President Engineering

Vice President Operations

Vice President Marketing

Human Resources Engineering

Operations Marketing

Small Appliance Division

Large Appliance Division

Real Estate Development Division

Airplane Engines Division

EXHIBIT

Organization

Vice President Palm-Size Computers

Vice President Printers

Vice President Desktop Computers

Domestic International

Operations Marketing

and Sales

Human Resources

Mixed Organizing at Various Levels

CEO

Vice President Product Planning

Vice President

Sales

Sales Manager South

Executive Vice President Operations

Vice President

Manufacturing

Vice President Information Systems

Sales Manager East

Sales

Manager

Midwest

Manager Special Projects

Manager Advanced Plannning

Manager Environmental Regulations

Manager Current Product Planning

EXHIBIT

Key Modifications to the Bureaucratic Structure

Matrix Organization

 Is a project structure superimposed on a functional

structure to take advantage of new opportunities and solve special problems.

 Projects are temporary groups of specialists working under one manager to accomplish a fixed objective such as

launching a new product.

 Matrix structure creates a dual reporting challenge—the

involved employees may have to report to two bosses.

 A key advantage is to implement projects quickly.

Matrix Organization

in an Electrics

Company

Quality Analyst

Information Systems Specialist

Marketing Specialist

Operations Technician

Electrical Engineer

Laptop

Computer

Project

Quality Analyst

Information Systems Specialist

Marketing Specialist

Operations Technician

Electrical Engineer

Cellular

Phone

Project

Quality Analyst

Information Systems Specialist

Marketing Specialist

Operations Technician

Systems Marketing

President or General Manager

Operations Electrical

Engineer

EXHIBIT

Flat Organizational Structures and

Downsizing

Flat Organization

 Has relatively few levels.

 Is less bureaucratic because:

 There are few managers available to review decisions.

 Short chain-of-command creates less concern about

authority differences among people.

 Are more efficient than tall organizations.

 Requires that managers be conscious of the effects that

downsizing to a flatter structure has on surviving

employees.

Outsourcing as an Organizational

Arrangement

Outsourcing

 Is having work done by other organizations.

 Is a method of dividing the work between groups on the

outside with groups on the inside.

 Reduces the need for employees and physical assets and

reduces payroll costs.

 Can create ethical dilemmas for companies who have no

control over the actions of their outsourcing suppliers.

Leading-Edge Organizational

Structures

The Horizontal Structure

 Is the arrangement of work by teams that are responsible for accomplishing a process.

 Is a structure in which employees take collective

responsibility for customers.

Reengineering

 Is the radical redesign of work to achieve substantial

improvements in performance.

 Searches for the most efficient way to perform a task.

 Organizes work horizontally rather than vertically.

A Horizontal Structure

Customer

Request

Order Fulfillment

Operations Specialist

IT Specialist

Finance Specialist

Marketing Specialist

EXHIBIT

The Network Structure

A Network Structure (or virtual organization)

 Is a temporary association of otherwise independent firms that are linked by technology to share resources and

markets.

 Is horizontally oriented.

 Requires that its members

trust one another.

Organigraphs: Drawing How Companies

Really Work

Organigraphs

 Maps that provides an overview of the company’s functions and the way people organize themselves at work.

 Help understand organizational functioning.

 Assist in expanding into new markets and opportunities.

 Exhibit 12-7 in the textbook depicts the current

configuration of a bank and strategic options for altering the structure of the organization.