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o r g n i z t i o n l b e h v i o r
stephen p. robbins
e l e v e n t h e d i t i o n
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ORGANIZATIONAL BEHAVIORS T E P H E N P. R O B B I N S
E L E V E N T H E D I T I O N
W W W . P R E N H A L L . C O M / R O B B I N S 2005 Prentice Hall Inc.All rights reserved.
PowerPoint Presentationby Charlie Cook
Chapter 15
Foundations ofOrganization Structure
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After studying this chapter,you should be able to:
1. Identify the six key elements that define an
organizations structure.
2. Explain the characteristics of a bureaucracy.
3. Describe a matrix organization.
4. Explain the characteristics of a virtual
organization.
5. Summarize why managers want to createboundaryless organizations.
LEA
R
NI
N
G
OB
JEC
TIV
ES
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After studying this chapter,you should be able to:
6. Contrast mechanistic and organic structural
models.
7. List the factors that favor different
organizational structures.
8. Explain the behavioral implications of different
organizational designs.
LEA
RN
ING
OB
JEC
TIVE
S(contd)
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What Is Organizational Structure?
Key Elements:
Work specialization Departmentalization
Chain of command
Span of control
Centralization and
decentralization
Formalization
Organizational Structure
How job tasks are formallydivided, grouped, andcoordinated.
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Key Design Questions and Answers for Designing the
Proper Organization Structure
E X H I B I T 151
The Key Question The Answer Is Provided By
1. To what degree are articles Work specialization
subdivided into separate jobs?
2. On what basis will jobs be grouped Departmentalizationtogether?
3. To whom do individuals and groups Chain of command
report?
4. How many individuals can a manager Span of control
efficiently and effectively direct?
5. Where does decision-making Centralization
authority lie? and decentralization
6. To what degree will there be rules Formalization
and regulations to direct employees
and managers?
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What Is Organizational Structure? (contd)
Division of labor:
Makes efficient use of employee skills
Increases employee skills through repetition
Less between-job downtime increases productivity
Specialized training is more efficient.
Allows use of specialized equipment.
Work Specialization
The degree to which tasks in the organization aresubdivided into separate jobs.
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Economies and Diseconomies of Work
Specialization
E X H I B I T 152
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What Is Organizational Structure? (contd)
Grouping Activities By: Function
Product
Geography Process
Customer
Departmentalization
The basis by which jobs are grouped together.
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What Is Organizational Structure? (contd)
Chain of Command
The unbroken line of authority that extends from thetop of the organization to the lowest echelon andclarifies who reports to whom.
AuthorityThe rights inherent in a managerial position to giveorders and to expect the orders to be obeyed.
Unity of Command
A subordinate should have only one superior to whomhe or she is directly responsible.
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What Is Organizational Structure? (contd)
Narrow Span Drawbacks:
Expense of additional layers of management.
Increased complexity of vertical communication.
Encouragement of overly tight supervision anddiscouragement of employee autonomy.
Concept:
Wider spans of management increase organizationalefficiency.
Span of ControlThe number of subordinates a manager can efficientlyand effectively direct.
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Contrasting Spans of Control
E X H I B I T 153
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E X H I B I T 154Source: S. Adams, Dogberts Big Book of Business, DILBERT
reprinted by permission of United Features Syndicate, Inc.
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Common Organization Designs
A Simple Structure:
Jack Golds Mens Store
Simple Structure
A structure characterized by a low degree ofdepartmentalization, wide spans of control, authoritycentralized in a single person, and little
formalization.
E X H I B I T 155
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Common Organization Designs (contd)
Bureaucracy
A structure of highly operatingroutine tasks achieved throughspecialization, very formalized
rules and regulations, tasks thatare grouped into functionaldepartments, centralizedauthority, narrow spans of
control, and decision makingthat follows the chain ofcommand.
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The Bureaucracy
Strengths
Functionaleconomies of scale
Minimum duplication
of personnel andequipment
Enhancedcommunication
Centralized decisionmaking
Weaknesses
Subunit conflicts withorganizational goals
Obsessive concern
with rules andregulations
Lack of employeediscretion to dealwith problems
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Common Organization Designs (contd)
Key Elements:
+ Gains the advantages of functional and productdepartmentalization while avoiding their weaknesses.
+ Facilitates coordination of complex andinterdependent activities.
Breaks down unity-of-command concept.
Matrix Structure
A structure that creates dual lines of authority andcombines functional and product departmentalization.
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Matrix Structure (College of Business Administration)
(Dean)
(Director)
Employee
E X H I B I T 156
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New Design Options
Characteristics:
Breaks down departmental barriers.
Decentralizes decision making to the team level.
Requires employees to be generalists as well asspecialists.
Creates a flexible bureaucracy.
Team StructureThe use of teams as the central device to coordinatework activities.
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New Design Options (contd)
Concepts:
Advantage: Provides maximum flexibility while
concentrating on what the organization does best.
Disadvantage: Reduced control over key parts of
the business.
Virtual Organization
A small, core organization that outsources its majorbusiness functions.
Highly centralized with little or no departmentalization.
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A Virtual Organization
E X H I B I T 157
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New Design Options (contd)
T-form Concepts:
Eliminate vertical (hierarchical) and horizontal
(departmental) internal boundaries.
Breakdown external barriers to customers and
suppliers.
Boundaryless OrganizationAn organization that seeks to eliminate the chain ofcommand, have limitless spans of control, andreplace departments with empowered teams.
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Why Do Structures Differ?
Mechanistic ModelA structure characterized by extensivedepartmentalization, high formalization,a limited information network, and
centralization.
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Why Do Structures Differ?
Organic ModelA structure that is flat, uses cross-hierarchical andcross-functional teams, has low formalization,possesses a comprehensive information network, and
relies on participative decision making.
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Mechanistic Versus Organic Models
E X H I B I T 158
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Why Do Structures Differ?Strategy
Innovation StrategyA strategy that emphasizes the introduction of majornew products and services.
Imitation Strategy
A strategy that seeks to move into new products ornew markets only after their viability has alreadybeen proven.
Cost-minimization StrategyA strategy that emphasizes tight cost controls,avoidance of unnecessary innovation or marketingexpenses, and price cutting.
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The Strategy-Structure Relationship
E X H I B I T 159
Strategy Structural Option
Innovation Organic:A loose structure; low
specialization, low formalization,
decentralized
Cost minimization Mechanistic: Tight control; extensive
work specialization, high formalization,
high centralization
Imitation Mechanistic and organic: Mix of
loose with tight properties; tightcontrols over current activities and
looser controls for new undertakings
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Why Do Structures Differ?Size
Characteristics of large organizations:
More specialization
More vertical levels More rules and regulations
Size
How the size of an organization affects its structure.As an organization grows larger, it becomes moremechanistic.
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Why Do Structures Differ?Technology
Characteristics of routineness (standardized or
customized) in activities:
Routine technologies are associated with tall,
departmentalized structures and formalization in
organizations.
Routine technologies lead to centralization whenformalization is low.
Nonroutine technologies are associated with delegated
decision authority.
Technology
How an organization transfers its inputs into outputs.
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Why Do Structures Differ?Environment
Key Dimensions-
Capacity: the degree to which an environment can
support growth.
Volatility: the degree of instability in the environment.
Complexity: the degree of heterogeneity and
concentration among environmental elements.
EnvironmentInstitutions or forces outside the organization thatpotentially affect the organizations performance.
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The Three Dimensional Model of the
Environment
Complexi ty
Volati l i ty
Capacity
E X H I B I T 1510
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Bureaucracy Is Dead
Characteristics of
Bureaucracies
Specialization
Formalization
Departmentalization
Centralization Narrow spans of control
Adherence to a chain ofcommand.
Why Bureaucracy
Survives
Large size prevails.
Environmentalturbulence can belargely managed.
Standardizationachieved through hiringpeople who haveundergone extensiveeducational training.
Technology maintainscontrol.
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Organizational Designs and Employee
Behavior
Research Findings:
Work specialization contributes to higher employee
productivity, but it reduces job satisfaction.
The benefits of specialization have decreased rapidly as
employees seek more intrinsically rewarding jobs.
The effect of span of control on employee performance is
contingent upon individual differences and abilities, task
structures, and other organizational factors. Participative decision making in decentralized
organizations is positively related to job satisfaction.
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Organization Structure: Its Determinants and
Outcomes
Implicit Models of
Organizational Structure
Perceptions that people holdregarding structural variablesformed by observing things aroundthem in an unscientific fashion.
E X H I B I T 1511