HRM 601 Organizational Behavior

1. HRM 601 Organizational Behavior Session 12 Organizational Structure & Design

2. Basic Characteristics of Organizational Structure • Division of labor: dividing up the many tasks of the organization into specialized jobs • Hierarchy of authority: Who manages whom. • Span of control: Who manages whom. • Line vs staff positions • Decentralization

3. Hierarchy of Authority • Tall vs flat hierarchies • Autonomy and control • Communication • Size

4. Span of Control • A wide span of control: a large number of employees reporting, • A narrow span of control: a small number employees reporting • The appropriate span of control depends on the experience, knowledge and skills of the employees and the nature of the task.

5. Line vs Staff Positions • Line vs Staff: • Line positions are those in which people are involved in producing the main goods or service or make decisions relating to the production of the main business. • Staff positions These are positions in which people make recommendations to others but are not directly involved in the production of the good or service

6. Decentralization • The extent to which decision making is concentrated in a few people or dispersed through out the organization • Advantage: benefits associated with greater participation and moving the decision closest towards implementation • Disadvantage: Lack of perspective and information, lack of consensus

7. Functional Structure Advantage: efficiency, communication Disadvantage: isolation of units

8. Product Structure Advantages: Product focus, flexibility Disadvantage: Duplication of effort

9. Market Structure

10. Geographic Structure

11. Matrix Structure R & D Engineering Manufact’ing Product A Product B Product C

12. Integration • Hierarchy of authority • Liaison roles • Teams, committees, task forces • Standardization & formalization

13. Mechanistic & Organic Designs • Mechanistic: tallness in hierarchy, specialization, centralization in authority, formalization. Work best under stable conditions • Organic: flatness, generalization, decentralization flexibility Best fit dynamic conditions and complex technology

14. Designs and Dimensions

15. Effectiveness Criteria • Output approach • Internal process approach • Systems resource approach • Stakeholder approach

16. Effectiveness & Structure • Size and structure • Complexity • Differentiation • Decentralization • Formalization • Structure and satisfaction • Decentralization • Span of control

17. New Designs: Joint Ventures, Networked Organizations & Virtual Organizations • The networked organization has a common board • Joint ventures and virtual organizations involve the development of an organizational form two or more independent organizations which are often competitors. The parent companies stay separate.

18. Virtual Organizations • VOs are more limited in participation and time, more temporary than other IODs • Creation of a complementary resource base of different organizations by a project team • Co-operation of partners by common business understanding • Integration of resource base by transaction governance system • Formulation of a common network strategy and • Socialization by trust between involved partner. (Siebert, 1998)

19. E-Commerce as a Virtual Organization Virtual Org. Boundary Customers Distributor E-Storefront ISP Supplier or manufacturer E Warehouse E-Commerce Boundary

20. Enabling Factors for Virtual Organizations • Environment • Technology • Size