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8/18/2019 OT (1).pptx
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BASIC CHALLENGES OFORGANIZATIONAL
DESIGNInstructor
Group Members
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Agend
• Diferentiation
• Balancing Diferentiation and integration
• Balancing centralization and
decentralization
• Coordinating the Formal and InormalOrganization
• Balancing Standardization and MutualAdjustment
• Mechanistic and Organic OrganizationalStructures
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O!er!"e#
• Designing structure with clear idea o – What is to achiee
– !fect o the choices made on the sta"eholders
• Organizational design is an eoling#rocess
• It inoles – $ow to control coordinate and motiate
– %he tas"s in organization and #eo#le who#erorm them
– Ma&imization o organization's a(ilit) to createalue
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O!er!"e#
• In short* the cha#ter is a(out*
+Ho# n Orgn"$t"on de!e%ops!%ue cret"on s&"%%s nd
b"%"t"es "n order to sur!"!e ndgro#'
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Diferentiation
• %he #rocess () which an organization allocates#eo#le and resources to organizational tas"s
• !sta(lishes the tas" and authorit) relationshi#sthat allow the organization to achiee its goals
,who is res#onsi(le or what and who re#ort towhom-
• D"!"s"on o( %bor) the degree o s#ecialization inthe organization
• In a sim#le organization* diferentiation is low
(ecause the diision o la(or is low (ecauseIndiiduals t)#icall) #erorm all organizationaltas"s
• In a com#le& organization* diferentiation is high(ecause the diision o la(or is high
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.
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Organizational Roles
• +Set o tas"/related (ehaiorsre0uired o a #erson () his or her#osition in an organization1 –
As the diision o la(or increases*managers s#ecialize in some roles andhire #eo#le to s#ecialize in others
– S#ecialization allows #eo#le to deelo#their indiidual a(ilities and "nowledgewithin their s#eci2c role
• Organizational structure is (ased on as)stem o interloc"ing roles
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Organizational Roles
Aut*or"t+)
the #ower to hold #eo#le accounta(leor their actions and to ma"e
decisions concerning the use oorganizational resources
Contro%)
the a(ilit) to coordinate and motiate#eo#le to wor" in the organization'sinterests
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Subun"ts) Funct"ons ndD"!"s"ons
• Funct"on) a su(unit com#osed o a grou#o #eo#le* wor"ing together* who #ossesssimilar s"ills or use the same "ind o"nowledge* tools* or techni0ues to
#erorm their jo(s• D"!"s"on) a su(unit that consists o a
collection o unctions or de#artmentsthat share res#onsi(ilit) or #roducing a#articular good or serice
• Orgn"$t"on% comp%e,"t+) thenum(er o diferent unctions anddiisions #ossessed () an organization
– Degree o diferentiation
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Funct"on T+pes
•
Support (unct"ons – 3urchasing* sales and mar"eting* 34
and legal afairs• -roduct"on (unct"ons
– 3roduction o#erations* 3roduction
controls and 0ualit) control• M"ntennce (unct"ons
– 3ersonnel* engineering* and janitorialserices
• Adpt"!e (unct"ons
– 45D* Mar"et 4esearch* long range#lanning
•
Mnger"% (unct"ons–
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.ert"c% nd Hor"$ont%D"/erent"t"on
• 6ertical Diferentiation
+%he wa) an organization designs itshierarch) o authorit) and creates
re#orting relationshi#s to lin"organizational roles and su(units1
• $orizontal Diferentiation
+%he wa) an organization grou#sorganizational tas"s into roles and rolesinto su(units ,unctions and diisions-1
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.ert"c% nd Hor"$ont%D"/erent"t"on
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Orgn"$t"on% Des"gnC*%%enges
• Coordination o organizational actiities
• Who will ma"e decision
• $ow strictl) organization control
em#lo)ees actiities• In7uencing the inormal #ersonal
relationshi#
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B%nc"ng D"/erent"t"on ndIntegrt"on
• Hor"$ont% d"/erent"t"on is su##osed toena(le #eo#le to s#ecialize and (ecome more#roductie
– S#ecialization oten limits communication(etween su(units
– 3eo#le deelo# su(unit orientation
• Subun"t or"entt"on) a tendenc) to iewone's role in the organization strictl) rom the
#ers#ectie o the time rame* goals* andinter#ersonal orientations o one's su(unit
• When su(unit orientation occurs*communication ails and coordination (ecomes
di8cult
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B%nc"ng D"/erent"t"onnd Integrt"on
Integrt"on
the #rocess o coordinating arioustas"s* unctions* and diisions so thatthe) wor" together and not at cross/#ur#oses
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%)#es o Integration
Mechanisms
• H"errc*+ o( ut*or"t+
• D"rect contct) L""son ro%es
• L""son ro%es
• Ts& (orce
• Tems
• Integrt"ng ro%e
• Integrt"ng deprtment
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B%nc"ng D"/erent"t"on ndIntegrt"on
• Managers acing the challenge odeciding how and how much todiferentiate and integrate must9
– Careull) guide the #rocess odiferentiation so that it deelo#s thecore com#etences that gie theorganization a com#etitie adantage
– Careull) integrate the organization ()choosing a##ro#riate integratingmechanisms that allow su(units tocoo#erate and that (uild u# the
organization's core com#etences
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D"/erent"t"on !s Integrt"on
• A BC
D ID
ID
I
nc ng
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nc ngCentr%"$t"on nd
Decentr%"$t"on• Centr%"$ed orgn"$t"on) the authorit) toma"e im#ortant decisions is retained () to#leel managers
– %o# managers a(le to coordinate actiities
to "ee# the organization ocused on its goals• Decentr%"$ed orgn"$t"on) the authorit)
to ma"e im#ortant decisions is delegated tomanagers at all leels in the hierarch)
–
3romotes 7e&i(ilit) – res#onsieness
• -ros nd cons
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B%nc"ng Centr%"$t"on nd
Decentr%"$t"on 0cont12
• Ideal (alance entails9 – !na(ling middle and lower managers
who are at the scene o the action to
ma"e im#ortant decisions – Allowing to# managers to ocus on
long/term strateg) ma"ing
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Centr%"$t"on .SDecentr%"$t"on
A BC
BALANCING HIGHL3 CENTRALIZEHIGHL3 DECENTRALIZEC D
C
DC
D
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Coordinating the ormal andinormal organizations
• Manager must achiee a 2t (etweenthe ormal and inormal organization
FO4MA:Org
Beliesassum#tion
I;FO4MA: org
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Status and power
Organization is a network of informalsocial and status relations as well as ahierarchy of formal task and authority
,relations manager must harness the powerof the informal organization in order toachieve organizational goals.
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B%nc"ng Stndrd"$t"on ndMutu% Ad4ustment
• Stndrd"$t"on) conormit) tos#eci2c models or e&am#les that areconsidered #ro#er in a gien situation –
De2ned () rules and norms• Mutu% d4ustment) the #rocess
through which #eo#le use their judgment rather than standardized
rules to address #ro(lems* guidedecision ma"ing* and #romotecoordination
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B%nc"ng Stndrd"$t"on ndMutu% Ad4ustment
Form%"$t"on) the use owritten rules and #rocedures tostandardize o#erations
IBM !&am#le
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B%nc"ng Stndrd"$t"on ndMutu% Ad4ustment
Socialization9 =nderstood ;orms – Ru%es) ormal* written statement that s#eci)
the a##ro#riate means or reaching desiredgoals
– Norms) standards or st)les o (ehaior thatare considered t)#ical or a grou# o #eo#le
• Ma) arise inormall)
• !&ternal rules ma) (ecome internalized norms
–Soc"%"$t"on) the #rocess () whichorganizational mem(ers learn the norms o anorganization and internalize these unwrittenrules o conduct
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Stndrd"$t"on !ersusMutu% Ad4ustment
• Challenge acing managers is9 – %o 2nd a wa) o using rules and norms
to standardize (ehaior* and
– to allow or mutual adjustment to giemanagers o##ortunit) to discoernew and (etter wa)s to achiee goals
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Stndrd"$t"on !ersusMutu% Ad4ustment
• A BC
SMA
SMA
SMA
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Mec*n"st"c nd Orgn"cOrgn"$t"on% Structures
• Mec*n"st"c structures) designedto induce #eo#le to (ehae in#redicta(le* accounta(le wa)s –
Decision/ma"ing authorit) is centralized – Su(ordinates are closel) su#erised
– Inormation 7ows mainl) in a ertical directionalong a clearl) de2ned #ath
– $ierarch) #rinci#al integrating mechanism
– %as"s and roles coordinated #rimaril) throughstandardization and ormal written rules
– Best suited to organizations that ace sta(le*unchanging enironments
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Mec*n"st"c nd Orgn"cOrgn"$t"on% Structures
• Orgn"c structures) structures that#romote 7e&i(ilit)* so #eo#le initiatechange and can ada#t 0uic"l) to
changing conditions – Decision ma"ing distri(uted throughout the
hierarch)
– Coordination is achieed through mutual
adjustments – Status conerred () a(ilit) to #roide
creatie leadershi#
– !ncourages innoatie (ehaior
– Suited to d)namic enironments
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Ho# t*e Des"gn C*%%enges Resu%t "nMec*n"st"c nd Orgn"c Structures
>>
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Ts& nd Ro%e Re%t"ons*"ps
>?
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Cont"ngenc+ Approc*
• A management a##roach in whichthe design o an organization'sstructure is tailored to the sources o
uncertaint) acing an organization• Organization should design its
structure to 2t its enironment
>@
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