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Excellent leaders know how to apply structural principles to their particular situation and find a best structural fit. So, this lecture will help you achieve course objective number three: "Articulate various principles related to identifying organizational behavior." After completing the video, you should be able to identify the principle that will affect structural choices and this in turn will affect the behavior of your organization.
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Organizational Structure
LE 303
Organizational BehaviorLecture 6
Photo by Kevin Dooley. Available to http://www.flickr.com/photos/12836528@N00/2201791390
Definition
Definition
“The placement of power
and authority
in an organization.”
- Galbraith, J. R., 2002, Designing Organizations
Definition
“The manner in which
the parts of an organization are related to one another.”
- Richard Daft
Definition
A series of channels through which
information flows.
- Nadler & Tushman (1997)
Related Questions
• How does information flow throughout the organization?
• Who reports to whom?
• Who has authorization to make decisions and at what
levels?
• For each organizational function (or region or product line),
who is responsible for making sure objectives are achieved?
Principles
CoordinationC
on
tro
l
9
Concerns of Organization
coordination
control autonomy
Keidel, Robert W. Seeing Organizational Patterns: A New Theory & Language of Organizational Design. San Francisco: Berrett-Koehler, 1995. ISBN: 1-881052-65-6
10
Concerns of Organization
coordination
control autonomy
11
Concerns of Organization
coordination
control autonomy
(the team)
(the individual)
(the organization)
12
The Goal
Indirect Influence
coordination
control autonomy
13
Indirect Influence
coordination
control autonomy
The Goal
14
Indirect Influence
coordination
control autonomy
The Goal
Structural Options
Five Organizational Structures
Functional
Products
MarketGeographical
Matrix
Functional Structure• People grouped by function (marketing,
sales, R&D, support, etc.)
• Small, single product line
• Undifferentiated market
• Expertise within the function
• Long product development and life cycles
CEO
Research & Development
SalesManufacturingAccounting & Finance
Functional Structure
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Product Structure
• People grouped by product• Product focus• Healthy team competition• Flexibility• Rapid decision-making• Common with retail
companies
Advantage: product focus, flexibility
Disadvantage: Duplication of effort
CEO
Bolts Division
NutsDivision
SalesManufacturingManufacturing Sales
Product Structure
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Market Structure• People grouped by market segments (E.g.
Teens, Adults, Elderly)• Each product or service is unique for one
segment• Customer focus• Rapid customer service and product cycles• minimum efficient scale in functions
CEO
IndividualCustomers
CorporateCustomers
CustomerService
SalesSalesCustomerService
Market Structure
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Geographical Structure
• People grouped by geographic location.• Low value items with high transport cost• Closeness to customer for delivery or support • Perception of the organization as local• Geographical market segments needed
CEO
EastWest
CustomerService
SalesSalesCustomerService
Geographic Structure
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Matrix Structure• An alternative to the functional structure• Organization organized by both Function and
Product• Heavy use of Autonomous Work Teams (ATWs)• Potential for new processes and radical change
to processes• Reduced working capital (lower inventory and
faster collection of invoices)• Can cause confusion when horizontal managers
are not aligned with vertical managers.
CEO
ManufacturingResearch
Matrix Structure
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Engineering
Product A
Product B
Product C
Images of Structure
28
The Architecture Metaphor
29
Organic Structure
The Human Body“A company is a living being. It is an entity or persona, in and of itself, separate from the individuals within it. As a living persona, the company is goal-oriented, conscious of its own identity and open to the outside world.”
-- Aire De Geus
Can you think of other images for how an organization might be structured?
Thank You!www.macuniversity.edu
