Ch10-1 Organ is Ing in the 21st Century

8/6/2019 Ch10-1 Organ is Ing in the 21st Century

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Copyright Houghton Mifflin Company. All rights reserved. 10-1

Chapter 10

Organising in the 21st

Century


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Chapter Outline

Contingency Design The Burns and Stalker Model

The Lawrence and Lorsch Model


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Chapter Outline(continued)

Basic Structural Formats

Functional Departments Product-Service Departments

Geographic Location Departments

Customer Classification DepartmentsWork Flow Process Departments in Re-

engineered Organizations


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Contingency Design Alternatives

Span of Control

Centralisation and Decentralisation

Line and Staff Organisations

Matrix Organisations


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Effective Delegation

The Advantages of Delegation

Barriers to Delegation


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The Changing Shape ofOrganisations

Characteristics of the New Organisations

New Organisational Configurations


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CONTI

NGE

NCY DE

SIGN

Contingency design: the process of

determining the degree of

environmental uncertainty and adapting

the organisation and its subunits to the

situation.


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CONTINGENCY DESIGN(continued)

Dimensions ofEnvironmental

Uncertainty1. Strength of social, political, and economic pressures

on the organization.

2. Frequency of technological breakthroughs in the

industry.

3. Reliability of resources and suppliers.

4. Stability of demand for the organizations products or

services.


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CONTI

NGE

NCY DE

SIGN(continued)

For Discussion: Is the general trendtoday toward more or less

environmental uncertainty? Explain

with specific examples.


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THEBURNS AND STALKER MODEL(Contingency Organisation Design)

Two Ends ofa Structural Continuum

Mechanistic organisations: rigid in

design and have strong bureaucratic

qualities.

Organic organisations: flexible in

structure and adaptive to change.


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THEB

URNS AND ST

ALKE

R MODE

L(Contingency Organisation Design)(continued)

Key Research Findings:1. Successful organisations in relatively stable

and certain environments tended to be

mechanistic.

2. Relatively organic organisations tended to be

the successful ones when the environment

was unstable and uncertain.


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THEBURNS AND STALKER MODEL

(Contingency Organisation Design)(continued)

Practical Conclusion:

Mechanistic design is appropriate for

environmental stability, and organic

design is appropriate for highenvironmental uncertainty.


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THE LAWRENCE AND LORSCH MODEL

Opposing Organisational Forces

Differentiation: tendency among specialists to

think and act in restricted ways. (Tends to

fragment the organisation.)

Integration: in direct opposition to

differentiation, it involves the collaboration amongspecialists needed to achieve a common

purpose. (Tends to coordinate the organisation.)


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Figure 10.1 Differentiation and

Integration: Opposing Organisational

Forces


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THE LAWRENCE AND LORSCH MODEL(continued)

Key Research Findings:

1. Every organisation requires an appropriate

dynamic equilibrium between differentiation

and integration.

2. In successful firms, both differentiation andintegration increased as environmental

complexity increased.


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THE LAWRENCE AND LORSCH MODEL(continued)

Practical Conclusions:

These findings suggest that organisational failure inthe face of environmental complexity probably results

from a combination of high differentiation and

inadequate integration.

Needed organisational integration (coordination) can

be achieved through formal hierarchy, standard

policies and rules, departmentalisation, computer

networks, cross-functional teams, human relations

training, and liaison individuals.


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BASIC STRUCTURAL FORMATS

Departmentalisation: related jobs,activities, or processes are grouped into

major organisational subunits.


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BASIC STRUCTURAL FORMATS(continued)

Five Types ofDepartmentalization

Functional Departments (most common) Product-service departments (organic alternative to

functional departments)

Geographic location departments (communication

can be strained)


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BASIC STRUCTURAL FORMATS(continued)

Five Types ofDepartmentalisation

Customer classification departments (needs ofdifferent customers better served

Work flow process departments (found in

horizontal organisations resulting from reengineering)


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Figure 10.2 Alternative

Departmentalisation Formats (A)


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Departmentalisation Formats (B)


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Departmentalisation Formats (C & D)


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Departmentalisation Formats (E)


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SPAN OF CONTROL

(Contingency Design Alternatives)

Span ofcontrol: the number of people who

report directly to a manager.

Is There an Ideal Span ofControl?

The relevant question is no longer how wide spans ofcontrol should be but instead, How wide can ones

span of control be? Wider spans of control meanless administrative expense and more self-

management, both popular notions today.


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Figure 10.3 Narrow and Wide Spans

ofControl


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Figure 10.4 Situational

Determinants ofSpan ofControl


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CENTRALISATION AND

DECENTRALISATION(Contingency Design Alternatives)

Two Ends of the Same Continuum Centralisation: the retention of decision-

making authority by top management.

Decentralisation: management shares

decision-making authority with lower-levelemployees.


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CENTRALISATION AND

DECENTRALISATION

(Contingency Design Alternatives)(continued)

Balance Needed within a Contingency

Approach

The case against extreme decentralisation can besummed up in three words, lack of control. Balance

helps neutralise this concern.

Centralisation, because of its mechanistic nature,

generally works best for organisations in relativelystable situations.

A more organic, decentralised approach is

appropriate for firms in complex and changing

conditions.


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MATRIX ORGANISATION

Matrix organisation: vertical and

horizontal lines of authority arecombined in checkerboard fashion.


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Copyright Houghton Mifflin Company. All rights reserved.10-32

MATRIX ORGANISATION

(continued)

Advantages (increased coordination)

Efficient use of resources Project integration

Improved information flow

Flexibility

Discipline retention

Improved motivation and commitment


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MATRIX ORGANISATION

(continued)

Disadvantages (project managers authoritygap)

Power struggles

Heightened conflict

Slow reaction time

Difficulty in monitoring and controlling Excessive overhead

Experienced stress


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MAT

RIX

ORGANI

SATI

ON(continued)

For Discussion: On balance, is matrixdesign worth the trouble? Why?


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Figure 10.6 A Line and Staff

Organisation


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Figure 10.8 The Delegation Continuum


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DELEGATION(continued)

For Discussion:

1. Does a high degree of delegation make anorganisation more mechanistic or more

organic? Explain.

2. What is the relationship between delegation

and decentralisation?


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BARRIERS TO DELEGATION(continued)

Vague job definition.

Fear of competition from those below.

Reluctance to take the risks involved in depending on

others.

Lack of controls that provide early warning of

problems with delegated duties. Poor example set by bosses who do not delegate.


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BARRIERS TO DELEGATION(continued)

For Discussion:

1. Which three of the above reasons for notdelegating do you think are most common?

Why?

2. What should managers delegate: What they

know best, or what they know least well?


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THE CHANGING SHAPE OF

ORGANISATIONS

Characteristics of the New

Organisations

Fewer layers

More teams

Smallness within bigness


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Figure 10.9 Reshaping the Traditional

Pyramid Organisation


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THE CHANGING SHAPE OF

ORGANISATIONS(continued)

For Discussion:

1. Which of the new-style organizations willlikely be most common in twenty years?

2. In which of these new organisations would

you most like to be a top manager? A

middle manager? A first-line supervisor? A

nonmanagerial employee?

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Ch10-1 Organ is Ing in the 21st Century