Présentation PowerPointThe Formal Organization
Organizational Structure
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Described and made tangible by « organizational charts » : state who reports to who and what are the main domain of responsibilities of each person.
Human Resources, Law and Management Department - September 2009
The process of defining and operating an organizational structure
ORGANIZATIONAL/OPERATING DESIGN
Hierarchy
Roles
Purposes
organization
Specialization -
are narrowly defined and
expertise
Integration : the process of coordinating the different parts of an organization towards pursuing organizational goals
Diffentiation
Integration
Purposes : the objectives the organization is trying to achieve
Differentiation = the process of breaking the organization goals into tasks
Horizontal differentiation = differentiation ° between organizational sub-units (in terms of expertise, time frame, goals, etc)
Vertical D = differentiation ° between low level and high level in the hierarchy
Geographic D = geographical dispersion
The highest these three level of differentiation (H / V / G), the highest complex the organization
functions (input based differentiation)
or product type ; customer type ; geography (output based differentiation)
Division of labour = specifies how the total set of organizational tasks is divided into jobs
Defines personal task responsibilities
Differentiation and Integration are Opposing Structural Forces
Differentiation
Integration
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Purposes : the objectives the organization is trying to achieve
Differentiation = the process of breaking the organization goals into tasks
Horizontal differentiation = differentiation ° between organizational sub-units (in terms of expertise, time frame, goals, etc)
Vertical D = differentiation ° between low level and high level in the hierarchy
Geographic D = geographical dispersion
The highest these three level of differentiation (H / V / G), the highest complex the organization
functions (input based differentiation)
or product type ; customer type ; geography (output based differentiation)
Division of labour = specifies how the total set of organizational tasks is divided into jobs
Defines personal task responsibilities
Option 1: Functional Design
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It is so called because it groups activities according to a logic of similarity « in work function »
Pros :
It is intended to maximize the economies of scale from specialization
Limited duplication effort
The top manager is the only person whose position grants them the big picture
Human Resources, Law and Management Department - September 2009
Option 2: Multi-Divisional Design
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Functional structure will often turn to the multi-divisional form (one reason : overburdened centralized descision makers)
The « M form » groups units in one of these 3 ways :
Products
Geographical region of activity
Eg : GM is divisionalized on the basis of its products : Chevrolet division, Cadillac, etc
Banks : on the basis of geographic region or client types
! When companies operate divisions in different industries (rather than just divisionalizing products within an industry) : such organizations are known as conglomerates or holding companies.
It very often result from mergers and acquisition : here the concern is more financial than organizational
Human Resources, Law and Management Department - September 2009
Option 3: Matrix Design
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The matrix structure was developed with the intention of providing the bast of both functional and multi-divisional laternatives
This is accomplished by overlaying functional and divisional structures
Functionally specialized employees are assigned to one or more project teams
The REVOLUTION : Dual lines of authority : the matrixed employees are accountable to two bosses!
Human Resources, Law and Management Department - September 2009
Four Symptoms of Structural Weakness
Delay in decision
Right information not reaching
No coordinating effort
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Conclusion
The basic objective of OD is to balance differentiation and integration
No « one best way »: each structural configuration has its pros and cons: compromising vs. optimizing
Contemporary Reality: de-differentiated & integrated flat organizations seem to be imperative
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Today, many researchers advocate we have one too far in the differentiation processes : what is need is to de-differentiate (the cost of integration is too high)
See Clegg + Hammer et Champy (re-engineering)
You need to set flat organizations (see Mc Kinsey blue-print) + organization around processes : PROCESS ORIENTED & CLIENT ORIENTED STRUCTURE
Human Resources, Law and Management Department - September 2009
The Informal Organization
Organizational Culture: A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems (Schein, 1992)
A Naturally-Occurring Phenomenon inherent to Surviving Organizations learning from their Experience
A shared Perceptual/Cognitive Construct and thus Implicit & Informal
Perceived as a both Internally & Externally Valid Recipe for Organizational Success
A Point-of-Reference for the Cognitive-Affective Socialization of Organizational Newcomers
Human Resources, Law and Management Department - September 2009
Organizational Culture…
the basic tacit assumptions about how the world is and ought to be that a group of people share and that determines their perceptions, thoughts, feelings, and, their overt behavior
(Schein, 1996)
As such Rigid/Strong OC’s have been accused of causing:
Competency Traps Range Restriction of the People
Organizational Myopia/Groupthink & Attracted/Recruited
Levels of Organizational Culture
Organizational Culture is an Outcome of a Long-Term, Multi-Level Interaction
Organizational Culture shares to a certain extend attributes with the National/Societal Culture
(GLOBE Project)
Organizational Culture is a Long-term Operationalization of the Personality of the Founder/Entrepreneur and/or of the Dominant Coalition/Top Management
(Argyris, 1958; Bass & Avolio, 1993; McGregor, 1960; Pinfield, 1995;
Schein 1985, 1992, 1993).
Organizational Culture is a function of the aggregate attributes of Organizational Members
(Schneider, 1987)
Organizational Culture is influenced also by the industry of operation
(DiMaggio & Powell, 1983; Hannan & Freeman, 1977)
Organizational Culture is a function of any Sub-Cultures
(Martin, 1992; Trice & Beyer, 1993)
Human Resources, Law and Management Department - September 2009
The Informal Organization…
Organizational Climate: the shared perception of the way things are around here (Reichers and Schneider, 1990)
Organizational climate is informal and represents the shared perceived reality of organizational practice by organizational members
Organizational climate is a cognitive construct
Organizational climate reflects both organizational culture and politics (power)
Human Resources, Law and Management Department - September 2009
Climate Strength
the more organizational members agree in climate perceptions climate strength increases
the less organizational members agree in climate perceptions climate strength decreases
Climate strength expresses the situational strength to which individuals and groups in organizations are subject to and its level is crucial in determining behavior
Strong situations emerge when situational characteristics drive people to perceive events uniformly, equate expectations about the most appropriate behavior and entail the means to perform that behavior (Mischel, 1976)
Human Resources, Law and Management Department - September 2009
Conclusion
The Elements/Characteristics of the Organizational Structure, Culture & Climate are the Situational Variables that OB studies because those are contributing in determining (predicting) Individual, Group & Organizational behavior
Organizational Structure entails formal & actual variables while in contrast Culture & Climate perceived/cognitive variables and thus represent the informal organizational structure
Climate Strength is crucial in determining (predicting) the scale of the effect that situational variables have on individual, group & organizational behavior
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