Lecture Exploring management - Chap 8: Organization structure and design

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?

Organization Structure and Design

Exploring Management

– describe the formal structure, how an

organization should ideally work

Organizational Charts

What You Can Learn from an Organization Chart

Formal Structure

– Bad points include rumors, inaccurate information and resistance to change

Common Types of Structures

• Functional structures group together

people using similar skills

• Divisional structures group together

people by products, customers or

locations

• Matrix structures combine the functional

and divisional structures

• Team structures use many permanent and temporary teams

• Network structures extensively use

strategic alliances and outsourcing

COMMON ORGANIZATIONAL STRUCTURES

COMMON ORGANIZATIONAL STRUCTURES

COMMON ORGANIZATIONAL STRUCTURES

Functional Structures

Common functional structure

COMMON ORGANIZATIONAL STRUCTURES

Functional Structures

Functional Chimneys or Silos

• Communication and performance decrease across functions

COMMON ORGANIZATIONAL STRUCTURES

Divisional Structures

• Divisional structures group together

people who work on a similar product,

work in the same geographical region, or serve the same customers

COMMON ORGANIZATIONAL STRUCTURES

Divisional Structures

Common divisional structures

COMMON ORGANIZATIONAL STRUCTURES

Divisional Structures

Potential Advantages of Divisional Structures

• Expertise focused on special products,

COMMON ORGANIZATIONAL STRUCTURES

Matrix Structures

Matrix Structures combine functional and

divisional structures

to gain the advantages of both the functional and divisional approaches

COMMON ORGANIZATIONAL STRUCTURES

Matrix Structures

COMMON ORGANIZATIONAL STRUCTURES

Matrix Structures

Potential advantages of Matrix structures

program, product, or project managers

functions.

COMMON ORGANIZATIONAL STRUCTURES

COMMON ORGANIZATIONAL STRUCTURES

Team Structures

Team structure example

COMMON ORGANIZATIONAL STRUCTURES

Team Structures

Possible advantages of Team structures

cooperation, and decision-making

persons, not just job titles

increase enthusiasm and task involvement

COMMON ORGANIZATIONAL STRUCTURES

Network Structures

Network structures

relationships with contractors

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

technology to link alliances

and essential services

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 TRENDS

• manger supervises larger number of people

• flatter organizations have wide span of control

ORGANIZATIONAL DESIGN TRENDS

Organizational Design

ORGANIZATIONAL DESIGN TRENDS

ORGANIZATIONAL DESIGN TRENDS

2 Grant authority—allow others to act as

needed to complete task

3 Create accountability—require others to

report back, complete task

ORGANIZATIONAL DESIGN TRENDS

Horizontal and Adaptive Organizations

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