H1 org design

8/7/2019 H1 org design

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Organizational Design

Fundamentals



Contemplative Questions

• In what type of company would

I like to work?

• How do organizations process

information?

• Are all organizations the same?

• How are they different?

• What career paths can I pursue?



Management Functions

Planning Organizing Leading Controlling

Defining

goals, estab-

lishing

strategy, and

developingsubplans to

coordinate

activities

Determining

what needs

to be done,

how it will

be done,and who is

to do it

Directing

and moti-

vating all

involved

parties andresolving

conflicts

Monitoring

activities

to ensure

that they are

accomplishedas planned

Achieving the

organization’s

stated

purpose

Lead to

Designing organizational structures is part of

organizing, one of the four basic management functions.



Org chart example

Chief ExecutiveOfficer

President

Vice-

President

Region3

District

D

Executive

Vice-President

Region1

Region2

Region4

Region5

District

A

District

B

District

E

District

F

District

G

District

C

Vice-

President

Vice-

President

Vice-

President

Vice-

President

Executive

Vice-President



Alternate Org. Form:

A Matrix OrganizationDesign

Engineering

Manu-

facturing

Contract

Admin.Purchasing Accounting

Human

Resources

Alpha

Project

Beta

Project

GammaProject

Omega

Project

Design

Group 1

Design

Group 2

DesignGroup 3

Design

Group 4

Mftg.

Group 1

Mftg.

Group 2

Mftg.Group 3

Mftg.

Group 4

Contract

Group 1

Contract

Group 2

ContractGroup 3

Contract

Group 4

Purch.

Group 1

Purch.

Group 2

Purch.Group 3

Purch.

Group 4

Acctg.

Group 1

Acctg.

Group 2

Acctg.Group 3

Acctg.

Group 4

HR

Group 1

HR

Group 2

HRGroup 3

HR

Group 4



An IS Department Org Chart

Fig. 1-3.

IS professionals frequently work in project-based teams.

Only 1 team works on a project, usually.

People work on many projects, however (e.g. a matrix organization).

Teams are comprised of diverse group of members from several areas, and

may include users, managers, analysts, programmers, etc.



Whether you are a programmer, analyst, useror manager, it will help your career if youcan understand how organizations work. Analysts, especially, need to understand how

organizations process information. There are literally millions of organizations in

the world. When is a group of people considered an

organization? An organization is a ________ with some form of

___________ who collectively possess some___________ .

Organizations



In what type of organization would you like to work? All organizations vary in terms of their strategy,

their structure, their processes, their culture. Organizational structure is almost always

predetermined. It is there on your first day on thejob.

What works at one company may not work inanother, therefore it would be helpful to classify

organizations into certain types. Then we can make general statements about the types.

Organizations



In what type of organization would you like to work? Think of organizations in terms of 3 dimensions:

Degree of complexity Formalization Centralization

These dimensions will help you assess prospectiveemployers They generate great questions for job interviews.

They also help to determine how information is processedwithin the organization.

Organizations



Degree of Complexity

Two dimensions of organizational design

Vertical (the number of layers of management) Span of control = avg. # employees / manager

Horizontal (how jobs are differentiated)

Unity of Command says everyone should report to one and

only one superior (this is often not the case in IS).

IS positions commonly require team work

You may have a superior who advises you and teamleaders or project managers who give you specificdirection



Assuming Span of 4

Vertical complexity

Contrasting Spans of Control

(Highest)

Assuming Span of 81

2

3

4

5

6

7

1

4

16

64

256

1,024

4,096

1

8

64

512

4,096

Organizati o

nLe

vel

(Lowest)Span of 4:

4,096 Operatives. 1,365 ManagersSpan of 8:

4,096 Operatives. Only 585 Managers!

Which organization looks more appealing to you?



Horizontal complexity

Functional Departmentalization

Plant Manager

Manager,

Engineering

Manager,

Accounting

Manager,

Manufacturing

Manager,

Human

Resources

Manager,

Purchasing

Press

Dept. Mgr.

Tube

Dept. Mgr.

Finishing

Dept. Mgr.

Inspection

Dept. Mgr.

Castings

Dept. Mgr.




Product Departmentalization

Bombardier, Inc.

Recreational

Products

Division

Logistic

Equipment

Division

Industrial

Equipment

Division

Bombardier-

Rotax

(Gunskirchen)

Mass Transit

Sector

Rail Products

Sector

Recreational and Utility

Vehicles Sector

Mass Transit

Division

Bombardier-Rotax

(Vienna)

Rail and Diesel Products

Division




Customer Departmentalization

Director Director of Sales

Manager Manager,

Retail AccountsManager Manager,

Wholesale AccountsManager Manager,

Government Accounts

Figure 10-7




Geographic Departmentalization

Vice PresidentVice Presidentfor Sales

Sales Director,Sales Director,

Western RegionSales Director Sales Director

Southern RegionSales Director,Sales Director,

Midwest RegionSales Director Sales Director

Eastern Region



Centralization and Decentralization

DEGREE OF CENTRALIZATION

DEGREE OF DECENTRALIZATION

Judging by the size of the desk, where do decisions get made?

Which organization looks more appealing to you?



Two Extremes for Organizational Types

Rigid hierarchicalrelationships

Fixed duties

High formalization

Formalizedcommunication

channels

Centralizeddecision authority

Vertical and horizontalcollaboration

Adaptable duties

Low formalization

Informal

communication

Decentralizeddecision authority

Mechanistic Organic



Types of Organizations

Rigid hierarchicalrelationships

Fixed dutiesHigh formalization

Formalizedcommunicationchannels

Centralizeddecision authority

Vertical and horizontalcollaboration

Adaptable duties

Low formalization

Informalcommunication

Decentralizeddecision authority

Mechanistic Organic

In which type of organization would you like to work?

Do you like to take orders?

Are you risk-averse, i.e. do you avoid risk?

Do you prefer to be aware of the ‘big picture’?



Woodward’s Findings on Technology,

Structure, and Effectiveness

Unit

Production

Mass

Production

Process

Production

Structural

characteristics

Low vertical

differentiation

Moderate vertical

differentiation

High vertical

differentiationLow horizontal

differentiation

High horizontal

differentiation

Low horizontal

differentiation

Low

formalization

High

formalization

Low

formalization

Most effective

structure

Organic Mechanistic Organic

Documents

H1 org design