MGMT3 PPT CH09 IENOvideo dlf - Orange Coast College€¦ · Organizational Structure The vertical and horizontal configuration of departments, authority, and jobs within a company

Chapter 9

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1Copyright ©2011 by Cengage Learning. All rights reserved

Chapter 9Designing Adaptive

Organizations

Designed & Prepared byB-books, Ltd.

MGMT3

Chuck Williams


Organizational Structure


The vertical and horizontal configuration of departments, authority, and jobs within a company.

Organizational Process

The collection of activities that transform inputs into outputs that customers value.



Process View of Microsoft’s Organization Process View of Microsoft’s Organization

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Designing Organizational Structures

After reading these sections, you should be able to:

1. describe the departmentalization approach to organizational structure.

2. explain organizational authority.

3. discuss the different methods for job design.


Departmentalization

CustomerCustomer GeographicGeographic MatrixMatrix

FunctionalFunctional ProductProduct

11


Functional Departmentalization

1.11.1

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Advantages Disadvantages

Functional Departmentalization

� Work done by highly skilled specialists

� Lowers costs through reduced duplication

� Communication and coordination problems are lessened

� Cross-department coordination can be difficult

� May lead to slower decision making

� Produces managers with narrow experiences

1.11.1


Product Departmentalization

United TechnologiesUnited Technologies

CarrierCarrier

Hamilton SundstrandHamilton

Sundstrand

ChubbChubb

OtisOtis

Pratt & WhitneyPratt & Whitney

UTC PowerUTC Power--Administrative services--Communication & public relations--Customer service & support--E-Business--Engineering--etc…

SikorskySikorsky

1.21.2



Product Departmentalization

• Managers specialize, but have broader experiences

• Easier to assess work-unit performance

• Decision-making is faster

• Duplication of activities

• Difficult to coordinate across departments

1.21.2

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Customer Departmentalization

1.31.3Source: “Company Structure,” About Swisscom, available online at http://www.swisscom.ch [accessed 14 November 2009].



Customer Departmentalization

• Focuses on customer needs

• Products and services tailored to customer needs

• Duplication of resources


• Efforts to please customers may hurt the company

1.31.3


Beyond the BookDell’s Spotlight Now on CustomersTraditionally, Dell’s core focus has been making PCs as efficiently as possible to sell at a discount to their competitors. Like most tech companies Dell organized itself around its products. Since the beginning of 2009, Dell has taken a different approach focusing around four customer groups: consumers, corporations, small and midsized businesses, and governments and educational buyers. Dell believes that an outward focus will empower managers to better respond to client needs.

Source: C. Edwards, “Dell’s Do-Over”, Business Week, 26 October 2009. 36-40.

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Geographic Departmentalization

1.41.4Source: “Territories of Operation, 2007 Annual Report,” Coca-Cola Enterprises, available online at http://www.cokecce.com/brochures/cce_2007/index.html#territories [accessed 7 September 2008].



Geographic Departmentalization

• Responsive to the demands of different market areas

• Unique resources located close to the customer

• Duplication of resources


1.41.4


Matrix Departmentalization

1.51.5Source: “Corporate Info: Structure,” P&G, available online at http://www.pg.com/jobs/corporate_structure/four_pillars.shtml [accessed 8 August 2008].

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Matrix Departmentalization

• Efficiently manage large, complex tasks

• Pool of available resources

• Requires high levels of coordination

• Conflict between bosses

• Requires high levels of management skills

1.51.5


Organizational Authority

Delegationof AuthorityDelegationof Authority

Degree ofCentralization

Degree ofCentralization

Chain ofCommand

Line versusStaff Authority

22


Chain of Command

• The vertical line of authority in an organization

• Clarifies who reports to whom

• Unity of command– matrix organizations violate

this principle

– workers report to only one boss

2.12.1

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Line versus Staff Authority• Line authority

– the right to command immediate subordinates in the chain of command

• Staff authority– the right to advise but not command others

2.22.2


Delegation of Authority


The assignment of direct authority and responsibility to a subordinate to complete tasks for which the manager is normally responsible.

2.32.3



2.32.3

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How to Be a More Effective Delegator1. Trust your staff to do a good job.

2. Avoid seeking perfection.

3. Give effective job instructions.

4. Know your true interests.

5. Follow up on progress.

6. Praise the efforts of your staff.

7. Don’t wait to the last minute to delegate.

8. Ask questions, expect answers, assist employees.

9. Provide the resources you would expect if doing the assignment yourself.

10. Delegate to the lowest possible level.2.32.3


Degree of Centralization

� Centralization of authority• primary authority is held by upper management

� Decentralization• significant authority is found in lower levels of

the organization

� Standardization• solving problems by applying rules, procedures,

and processes

2.42.4


Job Design

SpecializedJobs

SpecializedJobs

Job Rotation, Enlargement,

Enrichment

Job Rotation, Enlargement,

Enrichment

JobCharacteristics

Model

JobCharacteristics

Model

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Job Specialization

� A job that is a small part of a larger task or process

� Jobs are simple, easy to learn, & economical

� Can lead to low satisfaction, high absenteeism, & employee turnover

3.13.1


Job Rotation, Enlargement, and Enrichment

• Job Rotation– periodically moving workers from one

specialized job to another

• Job Enlargement– increasing the number of tasks performed

by a worker

• Job Enrichment– adding more tasks and authority to an employee’s

job3.23.2


Job Characteristics Model

� A job redesign approach that seeks to increase employee motivation

� Emphasizes internal motivation� experience work as meaningful

� experience responsibility for work outcomes

� knowledge of results3.33.3

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Job Characteristics Model

3.33.3


Job Redesign Techniques

Redesigning JobsRedesigning Jobs

Combining TasksCombining Tasks

Forming Natural Work UnitsForming Natural Work Units

Establishing Client RelationshipsEstablishing Client Relationships

Vertically Loading the JobVertically Loading the Job

Opening Feedback ChannelsOpening Feedback Channels3.33.3


Designing Organizational Processes

After reading these sections, you should be able to:

4. explain the methods that companies are usingto redesign international organizational processes(i.e., intraorganizational processes).

5. describe the methods that companies are using to redesign external organizational processes (i.e., interorganizational processes).

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Intraorganizational Processes

ReengineeringReengineering EmpowermentEmpowerment

44


Reengineering

� The fundamental rethinking and radicalredesign of business processes

� Intended to achieve dramatic improvements in performance

� Change the orientation from vertical to horizontal

� Change task interdependence4.14.1


Reengineering and Task Interdependence

4.14.1

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Empowerment

� A feeling of intrinsic motivation

� Workers perceive meaning in their work

� Employees are capable of self-determination

EmpoweringWorkers

EmpoweringWorkers

Permanently passing decision-makingauthority and responsibilities frommanagers to workers by giving themthe information and resources they need to make good decisions

Permanently passing decision-makingauthority and responsibilities frommanagers to workers by giving themthe information and resources they need to make good decisions

4.24.2


Behavioral Informality Behavioral Formality

Behavioral Informality

� Spontaneity

� Casualness

� Interpersonal familiarity

� Routine & regimen

� Specific behavior rules

� Impersonal detachment

Beyond the Book


Behavioral Informality

Popular ways to increase behavioral informality

Casual Dress and Open Offices

Beyond the Book

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Interorganizational Processes

ModularOrganizations

ModularOrganizations

VirtualOrganizations

VirtualOrganizations

55


Modular Organizations

5.15.1


Modular Organizations


• can cost less to run thantraditional organizations

• lets organizations focuson core competencies

• loss of control from outsourcing

• may reduce their competitive advantage

5.15.1

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Virtual Organizations

5.25.2


Virtual Organizations


• let companies share costs

• fast and flexible

• being the best shouldprovide better products

• difficult to control the quality of partners

• requires tremendous management skills

5.25.2


Beyond the BookNetflix Utilizing Virtual TeamsIn an effort to improve the video recommendations on its website, Netflix awarded a $1 million prize to an outside group of designers with members from New Jersey, Quebec, Austria, and Israel. More than 40,000 teams representing 186 countries participated in the competition. Many of the participants posted their results online and teams frequently worked together. A big reason for the project’s success: Netflix was able to present it as a discrete math problem with well defined parameters and objectives.

Source: M. V. Copeland, “Tapping Tech’s beautiful Minds”, Fortune, 12 October 2009. 35-36.

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MGMT3 PPT CH09 IENOvideo dlf - Orange Coast College€¦ · Organizational Structure The vertical and horizontal configuration of departments, authority, and jobs within a company