Effective Organizational Design for Superior Performance

1. 1. Victory is much more meaningful when it comes not just from one person, but from the joint achievements of many. (Howard Schultz) 2. It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours, and you’ll drift in that direction. (Warren Buffett) 管 理 學Ch.11 Organizational Design 組織設計

2. 組織的目的在於讓平凡人做不平凡事。 (P. F. Drucker) • 不要期待主管給你溫暖，因為他站的位置比你高，比你更寒冷。 (104, Simon) • 蜈蚣走路需要 Align.

3. 綱要 11.1 Designing Organizational Structure: 6 個決策要素 11.2 Mechanistic vs. Organic organizations: 機械與有機 11.3 Contingency factors affecting structural choice: 4 個權變變數 11.4 Traditional organizational design options 11.5 Organizing for flexibility in the 21st century

4. 11.1 Defining Organizational Structure • Organizing • arranging and structuring work to accomplish an organization’s goals. • Organizational Structure • the formal arrangement of jobs within an organization. e.g., organization chart. • Organizational Design • a process involving decisions about six key elements:

5. Purposes of Organizing

6. 設計組織結構： 六個決策要素 1. 工作專業化 4. 管轄幅度 2. 部門化 5. 集（分）權 3. 指揮鏈 6. 形式化 討論：1. 複雜度(分科、分層、差異化)，    集權度，形式化。 2. one best way?

7. 1. Work Specialization 工作專業化 • The degree to which tasks in the organization are divided into separate jobs with each step completed by a different person. • Overspecialization can result in human diseconomies from boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnover

8. Economies and Diseconomies of Work Specialization

9. Functional產銷人發財 Grouping jobs by functions performed Product Grouping jobs by product line Geographical Grouping jobs on the basis of territory or geography Process Grouping jobs on the basis of product or customer flow Customer Grouping jobs by type of customer and needs 2. Departmentalization 部門化

10. Functional Departmentalization: cost L, morale H, 隧道視線 Plant Manager Manager, Manager, Manager, Manager, Manager, Engineering Manufacturing Human Resources Purchasing Accounting

11. Product Departmentalization Bombardier, Ltd. Mass Transit Recreational and Utility Rail Products Sector Sector Vehicles Sector Mass Transit Recreational Products Division Division Bombardier-Rotax Logistic Equipment (Vienna) Division Industrial Equipment Division Bombadier-Rotax (Gunskirchen) 11

12. Geographical Departmentalization Vice President for Sales Sales Director, Sales Director, Sales Director, Sales Director, Midwestern Region Western Region Southern Region Eastern Region

13. Process Departmentalization Plant Superintendent Sawing Planing and Assembling Lacquering and Department Milling Department Sanding Manager Department Manager Department Manager Manager Finishing Inspection and Shipping Department Manager Department Manager

14. Customer Departmentalization Manager, Manager, Manager, Retail Accounts Wholesale Accounts Government Accounts Director of Sales

15. Departmentalization Trends • Increasing use of customer departmentalization, e.g., 楷模廣告 • Cross-functional team - a work team composed of individuals from various functional specialties

16. 3. Chain of Command 指揮鏈 • The continuous line of authority that extends from upper levels of an organization to the lowest levels of the organization and clarifies who reports to who. • Unity of Command 指揮統一 • The concept that a person should have one boss and should report only to that person. e.g., Enron. Whistling?（吹口哨，打小報告）

17. Authority 職權 • The rights inherent in a managerial position to tell people what to do and to expect them to do it. • Responsibility 職責 • The obligation or expectation to perform. • Acceptance theory of authority the view that authority comes from the willingness of subordinates to accept it.

18. Chain of Command and Line Authority

19. Line vs. Staff Authority

20. 4. Span of Control 管轄幅度 • The number of employees who can be effectively and efficiently supervised by a manager. • affected by: • Skills and abilities of the manager • Employee characteristics • Characteristics of the work being done • Similarity of tasks • Complexity of tasks • Physical proximity of subordinates • Standardization of tasks • IS, Culture, Leading style,……

21. Contrasting Spans of Control Members at Each Level 1 1 1 4 8 2 3 16 64 Organizational Level 64 512 4 5 256 4,096 1,024 6 4,096 7 Span of 4 Operatives = 4,096 Managers (levels 1-6) = 1,365 Span of 8 Operatives = 4,096 Managers (levels 1-4) = 585

22. 5. Centralization 集權 • The degree to which decision-making is concentrated at a single point in the organizations. • Decentralization 分權 • Organizations in which decision-making is pushed down to the managers who are closest to the action. • Employee Empowerment 賦權 • Increasing the decision-making authority (power) of employees. • Delegation 授權

23. Centralization or Decentralization

24. 6. Formalization 形式化 • The degree to which jobs within the organization are standardized and the extent to which employee behavior is guided by rules and procedures. • Highly formalized jobs offer little discretion over what is to be done. e.g., SOP, Explicit job description. 討論：論文的 實質內容與形式規格

25. 11.2 Mechanistic vs. Organic Organization: Paradigm Shift (軍隊，C&C vs. 知識工作者，交響樂團） Organic Mechanistic • High Specialization • Rigid Departmentalization • Clear Chain of Command • Narrow Spans of Control • Centralization • High Formalization • Cross-Functional Teams • Cross-Hierarchical Teams • Free Flow of Information • Wide Spans of Control • Decentralization • Low Formalization

26. 權變因素組織結構組織效能 .策略 .複雜度 .獲利，成長 .規模 .集權度 .顧客滿意 .技術 .形式化 .員工滿意 .環境 (權力，政治) 11.3 contingency factors 權變理論架構 vs. one best way

27. Contingency Factors: 1. Strategy: Structure follows Strategy (A. Chandler) • Innovation 攻，Amazon, Starbucks • Pursuing competitive advantage through meaningful and unique innovations favors an organic structuring. • Cost minimization 守，McDonald • Focusing on tightly controlling costs requires a mechanistic structure for the organization. • Imitation • Minimizing risks and maximizing profitability by copying market leaders requires both organic and mechanistic elements in the organization’s structure.

28. 2. Size • As an organization grows larger, its structure tends to change from organic to mechanistic with increased specialization, departmentalization, centralization, and rules and regulations.

29. 實證研究 + e.g., Parkinson’s law: The number of subordinates increases at a fixed rate regardless of the amount of work produced. 29

30. 實證研究 + e.g., Parkinson’s law: The number of subordinates increases at a fixed rate regardless of the amount of work produced. 30

31. 實證研究 - 31

32. 實證研究 + 32

33. 3. Technology • Organizations adapt their structures to their technology. • Routine technology = mechanistic organizations • Non-routine technology = organic organizations

34. Unit Production Low vertical differentiation Low horizontal differentiation Low formalization Structural Characteristics Most effective structure Organic Mechanistic Organic Woodward’s Findings on Technology, Structure, and Effectiveness Mass Production Moderate vertical differentiation High horizontal differentiation High formalization Process Production High vertical differentiation Low horizontal differentiation Low formalization

35. 4. Environmental Uncertainty • Mechanistic organizational structures tend to be most effective in stable and simple environments. • The flexibility of organic organizational structures is better suited for dynamic and complex environments.

36. 11.4 Traditional Designs (Mechanistic) 1. Simple structure 簡單結構 • Low departmentalization, wide spans of control, centralized authority, little formalization 2. Functional structure 功能結構 • Departmentalization by function: Operations, finance, human resources, and product research and development 3. Divisional structure 部門結構 Composed of separate business units or divisions with limited autonomy under the coordination and control the parent corporation. 討論：1.大潤發採購部品保組，遠航飛安室 2. 自主團隊有多自主？

37. Traditional Organizational Designs

38. 11.5 Organizing for flexibility (Organic) 1. 團隊編組 2.矩陣與專案結構 3. 無邊界組織：虛擬，任務編組，開放創新 4. 其他彈性安排: 遠距工作、彈性時間、零工 討論：從不同球類比賽學習組織設計Keeping Employees Connected, Managing Global Structural Issues.員工努力工作最重要。組織設計是手段，可支持與促進員工執行工作。Building a learning organization.

39. Contemporary Designs 1. Team structures 團隊編組 • The entire organization is made up of work groups or self-managed teams of empowered employees. 2a. Matrix structures 矩陣結構 • Specialists from different functional departments are assigned to work on projects led by project managers. • Matrix and project participants have two managers. 2b. Project structures專案結構 employees work continuously on projects; moving on to another project as each project is completed.

40. A Matrix Organization in an Aerospace Firm

41. 3. Boundaryless Organization, 無邊界組織 • an organization whose design is not defined by, or limited to, the horizontal, vertical, or external boundaries imposed by a predefined structure. flexible and unstructured • 3a. Virtual Organization - an organization that consists of a small core of full-time employees and outside specialists temporarily hired as needed to work on projects. e.g., Nike, A 建設公司 3b. Task force (or ad hoc committee) -a temporary committee or team formed to tackle a specific short-term problem affecting several departments. e.g., 運輸年會 3c. Open innovation - opening up the search for new ideas beyond the organization’s boundaries and allowing innovations to easily transfer inward and outward.

42. Contemporary Organizational Designs

43. Contemporary Organizational Designs (cont.)

44. Contemporary Organizational Designs (cont.)

45. Benefits and Drawbacks of Open Innovation

46. (4) Other Flexible Work Arrangements 4a.Telecommuting- a work arrangement in which employees work at home and are linked to the workplace by computer. 4b(1) Compressed workweek - a workweek where employees work longer hours per day but fewer days per week. 4b(2) Flextime (or flexible work hours) - a scheduling system in which employees are required to work a specific number of hours a week but are free to vary those hours within certain limits. 4b(3) Job sharing - the practice of having two or more people split a full-time job. 4c. Contingent workers - temporary, freelance, or contract workers whose employment is contingent upon demand for their services.

47. Do your assignment 1. Thinking critically about ethics (p. 406) (1) Identifies Dilemma. (2) Considers Stakeholders (3) Analyzes Alternatives and Consequences 2. Internet-based exercise (p. 407): 上網找三個組織之組織圖，討論其優缺點，比較異同。 “政府再造？行政院減肥？部會精簡！” “workplace flexibility”: www.whenworkworks.org/, “find solutions” 47

48. 回顧 1. Describe six key elements in organizational design. 2. Contrast mechanistic and organic structures. 3. Discuss the contingency factors that favor either the mechanistic model or the organic model of organizational design. 4. Describe traditional organizational designs.

49. Terms to Know • organizing • organizational structure • organizational chart • organizational design • work specialization • departmentalization • cross-functional teams • chain of command • authority • responsibility • unity of command • span of control • centralization • decentralization • employee empowerment • formalization • mechanistic organization • organic organization • unit production • mass production • process production • simple structure • functional structure • divisional structure