Marketing Manager Course - Chapter 09

z Use organization structure and the three basic organization designs – mechanistic, organic, and boundaryless – to achieve strategic goals.. z Anticipate key strategic events likely t

Learning Objectives

After reading this chapter, you should be able to:

z Identify the vertical and horizontal dimensions of organization

structure.

z Develop coordination across departments and hierarchical levels.

z Differentiate between authority, responsibility, and

accountability.

z Recognize when structural characteristics of centralization, span

of control, formalization, and chain of command should be used.

z Apply the three basic approaches – functional, divisional, and

matrix – to departmentalization.

z Use organization structure and the three basic organization

designs – mechanistic, organic, and boundaryless – to achieve

strategic goals.

z Anticipate key strategic events likely to trigger a change in the

structure and design of an organization.

zThe deployment of resources to achieve strategic

goals It is reflected in:

¾The organization’s division of labor that forms jobs and

departments

¾Formal lines of authority

¾The mechanisms used for coordinating diverse jobs and roles

in the organization

zStrategy indicates what needs to be done.

zOrganizing shows how to do it.

Organization Structure

zFormal system of relationships that determine:

¾Lines of authority – who reports to whom.

¾Tasks assigned to individuals and units – who does what

tasks and with which department.

zDimensions of organization structure:

¾Vertical dimension

¾Horizontal dimension

The Vertical Dimension of Organization Structure

zUnity of Command – a

subordinate should have only

one direct supervisor.

zA decision can be traced back

from the subordinates who

carry it out to the manager who

made it.

The Vertical Dimension of

zAuthority – The formal right of a manager to make

decisions, give orders, and expect the orders to be

zAccountability – the manager (or other employee)

with authority and responsibility must be able to

justify results to a manager at a higher level in the

organizational hierarchy.

The Vertical Dimension of

zLine Authority

¾entitles a manager to directly control the

work of subordinates by hiring, discharging, evaluating, and rewarding them

¾line managers hold positions that contribute directly to the

strategic goals of the organization

¾part of the chain of command

zStaff Authority

¾the right to provide advice, recommend, and

counsel line managers and others in the organization

¾staff managers direct line managers

The Vertical Dimension of

zSpan of control – the feature of vertical structure

that outlines:

¾The number of subordinates who report to a manager

¾The number of managers

¾The layers of management within an organization

zSmaller span – fewer employees supervised by a

manager – creates a tall vertical organizational

structure

zLarger span – greater number of employees

supervised – creates a flat organizational structure

The Vertical Dimension of

zCentralization – the location of decision authority at

the top of the organization hierarchy.

zDecentralization – the location of decision authority

at lower levels in the organization.

zFormalization – the degree of written

documentation that is used to direct and control

employees.

The Horizontal Dimension of

Organization Structure

zThe organization structure element that is the basis

for:

¾Dividing work into specific jobs and tasks

¾Assigning jobs into units such as departments or teams

zDepartmentalization:

¾Functional

¾Divisional

¾Matrix

Functional Departmental Structure

Engineering Production Marketing Finance

President

Advantages and Disadvantages of

the Functional Approach

Advantages

z Decision authority is

centralized at the top of the

organization hierarchy

z Career paths foster

professional identity with the

business function

z High degree of efficiency

z Economies of scale help

develop specialized expertise

in employees

Disadvantages

z Communication barriers

z Conflict between departments

z Coordination of products and services is difficult

z Diminished responsiveness to customers’ needs

z Employees identify with functional department goals and not organization goals or needs

of the customer

Divisional Organization Structure

President

Software Division

Software Division

Consulting Source Division

Consulting Source Division

Computer Division

Computer Division

Production Marketing Finance

Geographic-Based Organization Structure

U.S andCanadaDivision

LatinAmericaDivision

EuropeanDivision

AsianDivisionPresident

Advantages and Disadvantages of

the Divisional Approach

z Reduced specialization in occupational skills

z Competition among divisions

Matrix Organization Structure

President

Vice President Finance

Vice President Finance Vice President Operations

Vice President Operations Vice President Manufacturing

Vice President Manufacturing

Vice President Sales and Marketing

Vice President Sales and Marketing

Advantages and Disadvantages of

the Matrix Approach

Advantages

z Efficient utilization of scarce,

expensive specialists

z Flexibility that allows new

projects to start quickly

z Conflict between product and functional managers over

deadlines and priorities

z Too much time spent in meetings to coordinate decisions

Organization Design

zThe selection of an organization structure that

best fits the strategic goals of the business.

zBasic organization designs:

Organization Design (continued)

zAs business strategy changes, so do the structural

elements of organization design.

zStrategic factors that affect the choices of

Mechanistic, Organic, and

Top-down communication

Low formalization Low formalization

Mechanistic

Redesigning Organizations

Merger

Acquisition

Divestiture

Applications of Management Perspectives—For the Manager

zOrganization structure provides sources other than

formal authority for a manager to get things done.

zOne source of power is the recognition of how the

resources that a unit or department controls can

contribute to organization performance.

Applications of Management Perspectives—For Managing Teams

zOne way to strengthen the culture of a team is to

organize a ceremony that exemplifies what the

team values.

zCeremonies reinforce specific values and create

bonds among employees by allowing them to

celebrate the achievements of the team or of

individual team members.

zCeremonies celebrate high-performing employees

and help build cohesion among team members.

Applications of Management

Perspectives—For Individuals

zMake yourself indispensable by anticipating your

boss’s need for support and by providing it without

being asked.

zLook for ways to show loyalty by speaking well of

your boss to others.

zDevelop a trusting relationship by being

dependable, consistent, and honest.

zKeep your boss well informed.