Modern Organizational Adaptation: A Comprehensive Guide to Structures and Effectiveness

1. Nickels Cover Nickels McHugh McHugh

2. Chapter 8 Adapting Organizations to Today’s Markets 8-2

3. Management Pyramid CEO, Comptroller, Vice Pres. Top Sales Mgrs Plant Mgrs. Mid-Level Supervisors Foremen Front Line/Supervisory

4. Workers in Large* Companies in the Last 5 Years Have Undergone... *500+ Employees Source: Gallup for Carlson Marketing Group

5. Show the activities of the organization Highlight subdivisions of the organization Identify different types of work performed Provide information about different management levels Show the lines of authority and the flow of organizational communications Purpose of an Organizational Chart

6. Organization Division Department Group Individual Organizational Design

7. Unity of Command Hierarchy of Authority Division of Labor Subordination of Individual Interest Authority Degree of Centralization Communication Channels Order Equity Esprit de Corps Fayol’s Principles of Organization

8. Weber’s Organizational Principles • Job Descriptions • Written Rules • Procedures, Regulations, Policies • Staffing/Promotions based on Qualifications

9. Chain of Command Rules & Regulations Set Up by Function Communication is Minimal Fundamentals of Bureaucracy

10. Advantages Increased Uniformity Less Duplication Maximum Control Disadvantages Lots of Policies & Procedures Many Layers/Slower Centralization(No Delegation)

11. Advantages Informed Decisions Worker Responsibility Few Layers/Faster Disadvantages Loss of Control Possible Duplication Decentralization (Delegate Authority)

12. Capabilities of Subordinates & Manager Complexity of Job Geographically Close Functional Similarity Need for Coordination Planning Demands Functional Complexity Span of Control

13. Tall Organizations Many Layers of Management High Cost of Management Flat Organizations Current Trend Creation of Teams Organizational Structures

14. Advantages Skill Development Economies of Scale Good Coordination Departmentalization by Function

15. Departmentalization by Function Disadvantages • Lack of Communication • Employees Identify with Department • Slow Response to External Demands • Narrow Specialists

16. Product Function Customer Location Process Departmentalization

17. Advantages Clear Authority & Responsibility Easy to Understand One Supervisor per Employee Disadvantages Inflexible Few Specialists for Advice Long Line of Communication Difficult to Handle Complex Decisions Line Organizations

18. Layers of Authority • Top Managers- Decision Makers • Middle Managers- Developed Rules & Procedures • Workers and Supervisors

19. Line Personnel Perform Functions Contribute Directly to Organizational Goals Staff Personnel Advise Assist Line Personnel Line/Staff Organizations

20. Advantages Flexibility Cooperation & Teamwork Creativity More Efficient Use of Resources Disadvantages Costly/Complex Confusion in Loyalty Requires Good Interpersonal Skills & Cooperation Not Permanent Matrix Organizations

21. Tips for Team Leaders • Don’t be afraid to admit ignorance • Know when to intervene • Learn to truly share power • Worry about what you take on, not what you give up • Get used to learning on the job

22. How to IncreaseTeam Productivity • Teachother members by sharing skills/strengths • Emphasize concern for teammates • Ask/invitequestions • Motivateteammates through praise & recognition

23. Networking • Networking • Real Time • Transparency • Virtual Corporations

24. A Virtual Corporation Production Firm Distribution Firm Accounting Firm Core Firm Legal Firm Advertising Agency Design Firm

25. Reasons to Outsource Source: CIO, “2003 Outsourcing Trends”

26. Time to focus on company’s primary function Increased level of expertise Cost effectiveness Decreased overhead Risk reduction Flexibility Technology Less personal approach Less control by owner in planning, implementing & carrying out company’s future Potential for competing for the outsourcing firm’s time Outsourcing Benefits Downside

27. Top Five Outsourced Business Categories Source: BusinessWeek, July 8, 2002

28. Outsourcing Possibilities Source: BusinessWeek, February 3, 2003

29. How to ImproveOrganizational Structure • Break business into smaller units • Build teamwork • Impose autonomy • Create meaningful incentives • Outsource non-operating activities • Share business capabilities across units

30. The Four “Rs” ofOrganizational Transformation • Reframe • Restructure • Revitalize • Renew

31. Information Build teamwork cross-functional integration Self-management & autonomy Bottom-up relationships Outsource Global orientation Internal vs. external customers Customer -Focused Design

32. Inverted Organization Structure Empowered front-line workers Support Personnel Top Mgmt.

33. Examples ofInformal Group Norms • Do your job but don’t produce more than the rest of the group. • Don’t tell off-color jokes or use profane language among group members. • Listen to the boss and use his/her expertise but don’t trust him/her. • Everyone is to be clean/organized at the workstation.

34. Examples ofInformal Group Norms(cont’d) • Never side with managers in a dispute involving group members. • Respect/help your fellow group members on the job. • Criticize the organization only among group members- never among strangers. • Drinking is done off-the-job- Never at work!