Chapter 16: Organizational Design and Structure

1. Understanding And Managing Organizational Behavior 4th Edition Chapter 16:Organizational Design and Structure JENNIFER GEORGE & GARETH JONES

2. Chapter Objectives • Understand the relationship between organizational design and an organization’s structure • Explain the main contingencies affecting the process of organizational design and differentiate between a mechanistic and an organic structure

3. Chapter Objectives • Cite the advantages of grouping people into functions and divisions and distinguish between the main forms of organizational structure from which an organization can choose • Explain why coordination becomes a problem with the growth of an organization and differentiate between the three main methods it can use to overcome this problem and link its functions and divisions

4. Chapter Objectives • Gain an understanding of the enormous impact modern information technology has had on the process of organizational design and structure both inside organizations and between them

5. Opening Case: A New Approach to Organizing at Sun Life • Why did Sun Life Change Its Structure? • Rigid and bureaucratic structure • Customer response too slow • Reorganization into series of cross-functional product teams

6. Designing Organizational Structure • Organizational Structure: Formal system of task and job reporting relationships • Organizational Design: Arrangement of tasks and job relationships that comprise the organizational structure

7. Figure 16.1 Contingencies Affecting Organizational Design • Organization’s Environment • Technology • HR and Employment Relationships

8. Routine vs Complicated Technology • Task Variety • Task Analyzability

9. Kinds of Technology • Small Batch • Mass Production • Continuous Process

10. Organic Dynamic, flexible Empowered teams Continuous improvement Norms and values Mechanistic Formal, controlling Centralized decision-making Clearly defined tasks Rules and regulations Organic and Mechanistic Structures

11. Advantages Coordination Communication Skill Improvement Motivation Controlling Disadvantages Limited growth under existing structure Limits to number of products and services Coordination difficulties at larger size The Functional Structure

12. Divisional Structures • Product • Market • Geographic

13. Advantages As size and complexity of organization increases, Coordination Communication Motivation Autonomy Disadvantages Increased costs Duplication of functions Miscommunication across divisions Competition for resources Conflict The Divisional Structure

14. The Matrix Structure • Complex network of reporting relationships among product teams and functions • People and resources grouped by • Function • Product

15. Advantages Coordination Fast new product development Communication Cooperation Innovation Creativity Autonomy Disadvantages Role conflict Role ambiguity Stress Unclear individual contributions to team performance The Matrix Structure

16. Techniques for Enhancing Coordination • Allocating Authority • Mutual Adjustment and Integrating Mechanisms • Standardization

17. Allocating Authority • Span of control • Tall and Flat Hierarchies • Chain of Command • Centralization versus Decentralization

18. Mutual Adjustment and Integrating Mechanisms • Direct contact • Liaison roles • Teams and task forces • Cross-functional teams

19. Standardization • Standardizing inputs • Standardizing conversion processes • Formalization • Standardizing outputs

20. The Effects of IT • Virtual organizations • Network structure