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HRM 601 Organizational Behavior

Explore basic characteristics of organizational structure including division of labor, hierarchy of authority, span of control, decentralization, and line vs. staff positions. Learn about different structural designs, such as functional, product, market, matrix, and geographic structures. Understand mechanistic vs. organic designs and their effectiveness criteria. Discover new designs like joint ventures, networked organizations, and virtual organizations, examining their benefits and enabling factors.

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HRM 601 Organizational Behavior

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  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

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