MODULE 14 ORGANIZATIONAL DESIGN AND CULTURE “Adaptability and values set the tone” What are the trends in organizational design? What is the nature of

MODULE 14

ORGANIZATIONAL DESIGN AND CULTURE

“Adaptability and values set the tone”

• What are the trends in organizational design?

• What is the nature of organizational culture?

ORGANIZATIONAL DESIGN AND CULTURE Trends In Organizational Design

MODULE GUIDE 14.1

Organizations are becoming flatter with fewer levels of management.

Organizations are increasing decentralization and reducing staff.

Organizations are increasing delegation and empowerment.

Organizations are becoming more horizontal and adaptive.

Organizations are using multiple means of subsystems integration.

Organizations are reengineering work processes for greater efficiency.


Organizational Design The process of configuring organizations to meet environmental challenges

Span of Control The number of persons directly reporting to a manager


Decentralization Top management allows lower levels to make many decisions

Empowerment Gives people the freedom to do their jobs as they think best

Delegation The process of entrusting work to others

Three Steps in Delegation

1. Assign responsibility—explain task and expectations to others. 2. Grant authority—allow others to act as needed to complete task. 3. Create accountability—require others to report back, complete task.


Bureaucracy Emphasizes formal authority, rules,

order, fairness and efficiency Mechanistic Designs

Are bureaucratic, using a centralized and vertical structure

perform best in stable environments with mostly routine and predictable tasks.

Organic Designs are adaptive using a decentralized

and horizontal structure perform best in change

environments requiring adaptation and flexibility.



Differentiation The degree of difference between subsystems in an

organization

Integration The level of coordination between subsystems in an

organization

Process Reengineering Increase operating efficiency by reducing

unnecessary work steps and streamlining work processes.


ORGANIZATIONAL DESIGN AND CULTURE Nature of Organizational Design

MODUAL GUIDE 14.2

Organizational culture is the personality of the organization.

Successful organizations tend to have strong and positive cultures.

The observable culture is what you see and hear as an employee or customer.

The core culture is found in the underlying values of the organization.


Organizational Culture a system of shared values and beliefs that guides the behavior

of members Strong Cultures

Are clear, well defined and widely shared among members

Characteristics of Successful and Strong Organizational Cultures

• Emphasize teamwork. • Allow and support risk taking. • Encourage innovation. • Make well-being of people a top management priority. • Strong cultures are clear, well defined, and widely shared among members.


Core Culture Beliefs and values shared by an organization

Value-based Management communicates, models, and reinforces core values throughout

the organization.

Core Values at KPMG• We lead by example. • We work together. • We respect the individual. • We seek the facts and provide insight. • We are open and honest in our communication. • We are committed to our communities. • Above all, we act with integrity.


Observable Culture What you see and hear as you are walking around in an

organization

MANAGEMENT TIPS

S C O R E S—How to read an organization’s culture

S - How tight or loose is the structure? C - Are decisions change oriented or driven by the

status quo? O - What outcomes or results are most highly

valued? R - What is the climate for risk taking, innovation? E - How widespread is empowerment, worker

involvement? S - What is the competitive style, internal and external?

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MODULE 14 ORGANIZATIONAL DESIGN AND CULTURE “Adaptability and values set the tone” What are the trends in organizational design? What is the nature of