Organizational Structure and Management Style

1. Organizational Structure and Management Style Organization & Administration

2. Organizational Management Basics of • Organizations • Organizational structure • Organizational culture • Bureaucracies and the search for alternatives • Leadership & Management

3. Organizations • Two or more people working together to achieve something (that often cannot be accomplished alone) • Shared • vision? • mission? • values?

4. Organizational structure • System of relations, governing activities of employees, reliant upon one another to meet common goals • Embedded in position descriptions • Pictured in position relationships shown on organizational charts • Revealed in distribution of authority and communication channels

5. Organizational structure • Since it is based upon relationships, it changes, even when it looks fixed • Varies from the simple to complex • Can be formal or informal • May be centralized or decentralized • Marked by specialization and coordination

6. Organizational Culture • “…the system of norms, beliefs and assumptions, and values that determine how people in the organization act—even when that action may be at odds with written policies and formal reporting relationships.” • Edgar H. Schein

7. Organizational Culture • Not a model for management but a theory that explains workplace behavior • Often operates unconsciously but guides action and affects ability to change • Exists alongside formal organizational structure, can be at odds with it • Learned responses of an organization in adapting to an external environment and integrating internally its experiences

8. Elements of Organizational Culture • Symbols: décor, signs, clothing • Language: use of terminology • Standards of behavior: meetings • Slogans: sayings • Heroes: those who embody the culture • Mythology: stories that are repeated • Ceremonies: special events, celebrations

9. Levels of Organizational Culture • Underlying assumptions • Unspoken and unconscious but guide action • Espoused values • Stated in mission, ethical codes, etc. • Artifacts • Visible evidence of assumptions in behavior, rituals, myths, etc.

10. Bureaucracies Distinguished by: • Governing rules –often rigid • Division of labor • Chain of command • Specializations

11. Bureaucratic Structure • Pyramidal • Top Level Management • Middle Level Management • Floor Supervisors • Floor Workers • Research indicates that restructuring usually results in the elimination of middle management positions • Horizontal and vertical components

12. Vertical Structure • Hierarchy • Provides the conduit for authority to flow, traditionally from top down (scalar principle) • Delegation entails assignment of authority from super-ordinate to subordinate • Units may be centralized or decentralized • Unity of command means each employee has a supervisor

13. Vertical Structure • Span of control refers to number of staff under one manager • Positions: • Line relationship: Position of authority over others super-ordinate l subordinate) • Staff relationship: Advisory or support lateral -> position

14. Power and/or Authority • Authority: right of supervisor to direct subordinates; flows from chain of command; vested in position, not person • Power: ability to influence the behavior of others; may derive from: management, ability to reward, expertise, and/or respect

15. Horizontal Structure • Departments with specialized • Functions • Territory • Product • Processes • Customers

16. Structure: Coordination • Mechanisms • Hierarchy’s elements: order, positions, etc. • Communication • Supervision • Standardization of work, products, skills • Policies & procedures • Committees • Planning

17. Tools for Management • Structure • Organizational design • Viewed today as means for competitive edge if the design is well matched to needs • All the elements of structure • For example, position descriptions, distribution of authority • Use of specialization and coordination, etc.

18. Bureaucracy’s shortcomings • What are they???

19. Bureaucracy’s shortcomings • Fails to take environment into account • Is less effective during change or turbulence, requiring flexibility and action • Ignores interpersonal relationships and their effects upon the workplace • Has undesirable, unintended consequences in control mechanisms

20. Structure as an Organic System • Concept of Burns and Stalker • Based upon biological model • Traits • Emphasizes horizontal communication • Relies upon knowledge-based authority • Encourages broader system view • Has broader, flexible position definitions • Refers to external, professional standards

21. Structure as an Organic System • Other aspects: • Promotes greater employee commitment • Blurs formal and informal elements of an organization • Mostly works for small groups

22. Looking for Perspectives on Organization, or Sense Making • Bureaucracy: The Model that Stands • Organizational Design Approaches: • Classical or Scientific, parallel and support the bureaucratic model • Human Relations, modifies it to better respond to people in the workplace • Systems Theory, modifies it to respond to the role of the environment (organizations function interdependently like organisms) • Participatory Management or shared leadership

23. Looking for Perspectives on Organization, or Sense Making • New models: Ideas come and go but each may contribute to the development of theory • From the models, new ideas have been incorporated into the bureaucratic model and it continues to evolve

24. Committees Taskforces Retreats Use of consultants Outsourcing Matrix Structure Self-managing work teams Quality circles Re-structuring Currently Accepted or Popular Methods to Modify Bureaucracy

25. Questions: • Will bureaucracy endure as a form? • Should bureaucracies persist? • Will they evolve? • Will they be replaced by revolutionary new organizational forms or design?

26. Leadership and Management styles Think of a manager you worked for and how s/he treated subordinates: • Did s/he build team spirit? • Did s/he monitor work closely? • Did s/he punish mistakes? • Did s/he permit you to share in goal setting and decision-making?

27. Leadership & Management • Think of some differences between…Leadership Management

28. Leadership and power • Power is based on the subordinate’s perceptions of the leader/manager (Mullins, 1996) • Reward power: ability and resources to obtain rewards for those who comply, e.g. pay, promotion, recognition, privileges • Coercive power: ability to punish or to bring about undesirable outcomes, e.g. withholding pay rises & promotion, withdrawing friendship, formal reprimands • Legitimate power: the right to exercise power because of leader’s position in the organisation • Referent power: subordinate’s identification with the leader because of attractiveness, reputation, or charisma • Expert power: competence, special knowledge or expertise in a given area. Expert power is normally limited to narrow, well-defined areas or specialties More a leadership trait More a management trait

29. What makes a leader? • The qualities or traits approach (“Great person”) • assumes that leaders are born, not made • we select leaders, not nurture or train them • common in popular thinking, but no evidence has been found to support this • each person’s list of leadership traits is different • Functional approach • Kretch et al (1962) identified 14 leadership functions • Both the official leader and the group member who happens to come up with the right function at the right time are leaders for that moment • The official leader is just a safety net, someone who is expected to fill in the leadership functions when needed

30. What makes a leader? • Styles of leadership approach • Many possibilities • Tannenbaum & Schmidt (1973) have a continuum • some similarity with Theories X and Z discussed later • Tells: leader identifies problem, chooses a decision, announces to subordinates, no participation • Sells: leader chooses a decision but attempts to persuade subordinates to accept it • Consults: leader identifies problem, listens to advice of subordinates, chooses a decision • Joins: leader defines problem and limits of decisions, group take decision with leader as just a member • Which approach is best depends on forces in the leader, the subordinates and the situation

31. What makes a leader? • Employee-centred vs. production-centred approach • Blake and Mouton (1964), and Likert (1961), use a two dimensional grid Hi Country clubmanagement Teammanagement Concern for people Impoverishedmanagement Authoritycompliance Lo Lo Hi Concern for production

32. Management: Theory X and Theory Y • Management styles: Douglas McGregor (1960) polarised (caricatured?) managers’ attitudes • Theory X: • Average person has an inherent dislike of work • People must be coerced, controlled, directed, threatened with punishment • Average person prefers to be directed, and wishes to avoid responsibility

33. Theory X and Theory Y • McGregor suggested: • Theory Y • Physical and mental effort is as natural as play or rest • Man will exercise self-direction for objectives to which he is committed • Commitment to objectives is a function of reward • Average person learns to accept and seek responsibility • Imagination and creativity is widely distributed • People’s potentials are only partially utilised "When one treats people with benevolence, justice and righteousness, and reposes confidence in them, the army will be united in mind and all will be happy to serve their leaders.” Sun Tzu (circa 400 BC)

34. Theory Z • Theory Z: WS Ouchi, 1980s • Well managed companies in US and Japan had lifetime employment, collective decision making, promotion from within, non-specialised career paths • Characterised as a “democratic” management style Theory Y Objective setting (Laissez Faire) Theory X Autocratic Your style might be anywhere in this continuum Theory Z Democratic

35. Final Thoughts... • Do you believe leadership can pass around a group depending on the function required? What if there is an official leader? • Think about a manager you have worked for. Was he Theory X, Y or Z? How did that make you feel? • What factors affect whether you adopt a Theory X, Y or Z style of management?